1. Title Date The Auto Sun is Rising The Auto Sun is Rising David E. Cole Emeritus Chairman Center for Automotive Research (CAR) Monahan Endowment Lecture Wayne State University, College of Engineering March 23, 2011

2. David is to be returned to Italy A bit of cultural news for a welcome change!

3. His Proud Sponsors were Fast Food Chains…

4. Title Date Auto Problem Mostly Revenue – with Depression Level of Sales 4

5. Title Date GM & Chrysler – Debt Reduction, Lean Ford: Good & Bad News, No Bankruptcy but High Debt All Manufacturers & Suppliers Have Been Hurt But, The Sun is Rising Fast 5

6. Title Date Across the Land – Still Amazing Level of Ignorance on Auto Industry 6

7. Title Date The Perfect Storm 7 Benefits Hyper Competition Competent New Players: China, India, … Auto Industry Tools Materials Policy Money

8. Title Date Auto Industry of the Future A World of Vanishing Boundaries 8

9. Title Date Economic Contribution of the U.S. Automotive Industry 9

10. Title Date Auto Manufacturing Manufacturers.... 313,000 + jobs Parts Suppliers.... 686,000 + jobs R & D Spending... $16 + billion Source: BLS, NSF *includes NAICS 3361, 3362 10

11. Title Date Economic Contribution Per Job 11 Auto Mfr.$329,000 Average Job$112,000 Source: U.S. Census Bureau Annual Survey Manufacturers 2005

12. Title Date Economic Multiplier Auto Manufacturers – 10 Auto Parts Supplier – 5.7 12

13. Title Date Auto Employment 2010 – modest gains 2011 – 2013 + 100,000 per Year 13

14. Title Date We Have Been Swimming a River That is Getting; Faster, Deeper, & Wider But! 14

15. Title Date The Pot of Gold on the Other Side is Getting Larger Labor Cost Reduction Household Growth Pent-Up Demand Capacity Reduction Scrappage Return of Pricing Power 15

16. Title Date The Challenge: Getting to the Other Side But We Have Reached the Shallow Water 16

17. Title Date Domestics – Unbelievable Shift from about $2,000 Disadvantage to $2,000 Advantage 17

18. PALE Meeting-March 19, 200918 However, Will It Come Back.. ? U.S. Light Vehicle Sales Forecast Source: CSM Worldwide, J.D. Power +4.4 M+6.8 M+8.9 M +2.4 M -9.3 M-5.2 M -8.0 M

19. PALE Meeting-March 19, 200919 U.S. Light Vehicle Sales History and Forecast Combined J.D. Power and CSM Worldwide Forecast 2007 - 2014 Source: CSM Worldwide, JD Power, Inc. Millions

20. Title Date The New Break-even- 10-11 Million Sales 20

21. Title Date Beware: The Aging of the Boomers. 21

22. Title Date Demographics Consumer Behavior Socio / Political Health Care Skilled Workers World Issue 22 Boomers go Boom

23. Title Date 23 Auto Industry - Thousands of New Jobs – But Only for the Educated for the Educated

24. Title Date 24 This is Auto Building Americas Tomorrow

25. Title Date The Business Model is Changing Fast. 25

26. Title Date Old Business Model 26 BureaucracyPaperLinear SlowLean Individual Sequential Regional Physical Prototypes Job for Life Kings Talk CompetitionStructuredAcquisitions Vertical Integration LegalisticControl

27. Title Date New Business Model 27 Anti-bureaucracyPaperless Collaboration Fast Lean Agile Team e-enabled Global Virtual Prototypes People Flow Coaches Listen Coopetition Parallel FlexibleAlliances Virtual Integration TrustEmpowerment

28. Title Date 28 Its the Team, the Team, the Team

29. Title Date Global Integration- Platforms Components R & D Plants Everything 29 One Company World-wide

30. Title Date Value of Global Economies of Scale are Huge 30

31. Title Date Lean / Agile Investment Engineering Manufacturing Everything 31

32. Title Date Knowledge The Competitive Edge 32

33. Title Date 33 Customer Pull Cars and Trucks Product and Process Technology Push

34. Title Date 34 Time Knowledge Application Knowledge CompetitiveAdvantage Innovation

35. Title Date 35 Do What You Know

36. Title Date 36 Coming Soon: Auto Harvest

37. Title Date 37 Auto Technology At the edge of a revolution?

38. Title Date 38 Fun Performance Green Environment Future Cars

39. Title Date 39 Future Power Plants Gasoline Diesel Hybrid Fuel Cell The Answer – ?

40. Title Date 40 $ Time Technological ProgressWhen to Commercialize A Current Technology B Too early

41. Title Date 41 POWER TECHNOLOGY COMPARISON CHART TECHNOLOGY OPTIONS / COMPARISON PARAMETERS ADVANCED GASOLINE CLEAN DIESEL HYBRID PARALLEL NON-GRID Cost+$1,000+$3,000+$4,000 to +$6,000 Fuel Economy+20%+30%+20% to +30% (with diesel +50%) Non-CO 2 Emissions BaselineNo x and Particulate Problem -20% to -30%

42. Title Date 42 BOTTOM LINE s Not enough knowledge to pick winners and losers s Different strategies for different companies s Alliances necessary to overcome challenges s Government incentives required…ultimately consumers decide

43. Title Date 43 Coming Fast – Plug-in, Series Hybrids or Extended Range Electric Vehicles

44. Title Date 44 Future Fuels Petroleum Bio Hydrogen NH 3 The Answer – ?

45. Title Date 45 Future Gasoline Price – $ 1.50 – $ 5.00 /gallon

46. Title Date 46 Annual Mileage 15,000 MPG

47. Title Date 47 Old Carbon Fuels Will Continue to be Used if they are Economic

48. Title Date 48 Improved Efficiency and New Carbon Fuels – Can Slow Growth of Old CO2 and Keep Expensive Old Carbon Fuels From Being Extracted.

49. Title Date 49 2 Key Developments Lithium Batteries Cellulosic Bio Fuels

50. Title Date 50 The Invention is Here!

51. Title Date 51 Cellulosic Bio Fuels Lower Heating Value 2010 - 2015 - $1.00/gal? Cost Increase for E-85 Vehicle - $100 Global Impact Development not Invention

52. Title Date 52 Lithium Batteries 4 x Performance Lead Acid Many Chemistries Heat a Problem Key to Plug-in Hybrids Development not Invention Cost?

53. Title Date 53 Energy BTU/ft³

54. Title Date 54 Life Discharge Level Challenge for Batteries

55. Title Date 55 1.Battery Economics Manufacturing Materials

56. Title Date 56 $ TIME

57. Title Date 57 Life After the Car: The Grid!

58. Title Date 58 Developments to Watch Developments to Watch Vehicle/Infrastructure Integration Auto/Utility Integration

59. Title Date 59 Climate Change – Divisive Conservation - Collaborative

60. Title Date 60 Future Direction Its All a Matter of Economics

61. Title Date 61 Success Factors Risk Obsolete Own Products Tough Problems Systems Knowledge Collaboration

62. Title Date 62 World Class is a Moving Target