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Remarks by Dan Akerson to the Society of Automotive Engineers 2011 World Congress 2011.04.15

Cobo Center, Detroit, Michigan, USA - April 14, 2011 - Remarks prepared for delivery by Dan Akerson, Chairman and CEO, General Motors Company, to the Society of Automotive Engineers, 2011 World Congress.

Daniel F. Akerson, GM Chairman and Chief Executive Officer.
Courtesy of GM

Cobo Center, Detroit, Michigan, USA - April 14, 2011


Thank you, Paul W.

You’ve really made it when people know you by just your first name… well, first name and middle initial.
And you know you’ve come a long way in Detroit when Paul W introduces you.

Paul W – you’re a lot more than a local legend.
You’re also a tireless advocate for the region and the industry, and a tremendous asset to our community.
Thank you for everything you do for all of us.

* * * * * * *

On behalf of GM, let me also say it’s been a real privilege to serve as host-company for this year’s World Congress.

Karl Stracke, GM Vice President – Global Vehicle Engineering, SAE 2011 World Congress General Chairman.
Courtesy of the SAE 2011 World Congress
I want to thank Karl Stracke and the GM Product Development Team for leading GM’s involvement in this year’s Congress, and helping make it so successful

* * * * * * *

And on a personal note, let me say how honored I am at the invitation to speak with you this evening.

I’m excited to be here is because I know that you are the people who do so much to make the global auto industry what it is today.

You may have heard that I make a point of telling people at GM that we need a much sharper focus on the customer… and that our marketing team has to meet this challenge.

What I also say – but which doesn’t get the same notoriety – is that the heart of our company, this industry, is engineering.

We produce some of the most technically complex machines for a mass market.
How we market these machines is critical – but the business starts and ends with the work you do.

And we have our work cut out for us.
Because this industry is on the verge of a huge transformation that will challenge our engineering capability.

* * * * * * *

History teaches us that dramatic transformation does not necessarily advance evenly or smoothly.
It advances in bursts. In revolutions.
Joseph Schumpeter, a 19 th century economist, called it “Creative Destruction.”

I’m most familiar with how this process has played out in telecommunications.
We progressed from the telegraph to the telephonefrom copper wires to fiber-opticsfrom wireless to satellitefrom analog to digital and so on.

But the model extends to other fields, as well.
Think about photographywhich went from daguerreotypes to glass plates to film to digitalnot to mention black-and-white to color.

Or aviation.
From blimps and airshipsto biplanes and monoplanesfrom fixed wing to rotaryfrom propellers to jets to rockets.

The pattern persists in virtually every technology and field of study.
And each burst opens the door to new innovations that revolutionize industries and sometimes society in general.

Today, we’re at the start of this kind of revolution in the auto industry.
It is centered on the push to develop cleaner, safer, more energy-efficient vehicles for a rapidly expanding global auto market.
And it is driven by the fact that limited petroleum supplies… and soaring demand for energymean that we can no longer rely on oil to supply 96 percent of the world’s automotive energy requirements.

We’re moving from an industry that, for 100 years, has been based on vehicles that are mechanically-driven and petroleum-fueled… to ones that will eventually be driven and fueled by electricity itself

We’re at the start of one of the innovative revolutions that changes industriesthat changes societiesand it’s a very big deal.

We’re not there yet, of coursebut the change is coming.
And faster than many might think.

* * * * * * *

At GM, we’re working to anticipate these changes in the automobile and incorporate them into our own transformation as a company.

To that end, we’re working to bring a number of new vehicle and powertrain technologies to market , including:

advances in aerodynamics and mass reduction

improvements in conventional powertrains

development of alternative fuels

and the electrification of the automobile.

Electrification, in turn, means the development of:

a variety of hybrid systems

extended-range electric vehicles

battery electric vehicles

and ultimately fuel-cell electric vehicles.

At this point, we believe there is no one solution that addresses all the challenges facing societies around the world.
And make no mistake, the clamor for cleaner, more fuel-efficient vehicles is universal.
It’s as strident in Dubai as it is in Detroit… as vocal in Sao Paulo as it is in Shanghai.

And I should point out that while we at GM are enormously proud of the Chevrolet Volt… we know that vehicles like Volt are just a glimpse of what is to come.

* * * * * * *

A quick aside on the Volt: one of my favorite reviews of the car was written by Dan Neil in The Wall Street Journal last October.

Dan wrote that “A bunch of Midwestern engineers in bad haircuts and cheap wristwatches just out-engineered every other car company on the planet.”

Well, I couldn’t agree more about “out-engineering” the competition.
Coming from Dan Neil, that’s pretty strong evidence that Volt is as customer focused as it is technologically advanced.

Of course, I didn’t agree with everything Dan had to say in that piece.
Look, I was in the Navy.
I know a thing or two about bad haircuts.
Believe me, our engineers aren’t so bad.

But just in case, I sent members of the Volt engineering team a gift certificate.
Told them they could use it at a fancy barber… or for a down payment on an expensive watch.

By the way, Karl – that’s a pretty nice watch tonight!

* * * * * * *

So, a century of relying exclusively on oil is coming to a close… and other fuels and means of propulsion are on the way.

Chevy Volt
is a harbinger of that… but it’s just the beginning.

The 2011 Chevrolet Volt electric car with extended-range capability was named Green Car of the Year.
Photo courtesy GM / Chevrolet Volt
As I see it, there are three areas where we – as an industry – can all work together to facilitate a transformation that’s already under way.

* * * * * * *

The first is investment.

In a fast-changing, technology-based business like ours, you win by charging forward… by investing in technology, in good times and bad.
Some would say especially in bad, and I’m not opposed to that.

The global auto industry is changing.
That’s a fact.
As companies, we can lead that change… or we can become casualties of it.

At GM, we choose to lead.

That’s why we’ve invested more than $700 million in recent years in Michigan facilities… to bring the Volt to market.

That’s why we announced in November that we’ll hire 1,000 new engineers and researchers in Michigan over the next two years… to significantly expand our electric vehicle programs.

That’s why we’re raising our R&D and product spending this year… and why we’ll maintain it at higher levels going forward… in good times and bad.

And that’s why we created GM Ventures last June to identify and develop new automotive technologies.
Somewhere, some kid is inventing the next Hewlett-Packard in his garage.
We want to find him… or her… and help bring those exciting new ideas to market.

Does it cost more to bring these things to market?
Of course.
It requires a lot of up-front investment.

In the long run, investing in technology and R&D – and engineeringwill strengthen our individual companies… improve the prospects for our industry… and help to grow our economy.

* * * * * * *

The second area where we can all make a difference right now is in the adoption of common standards.

Electric-vehicle development is rapidly creating entire new sectors within the auto industry – a virtual ecosystem of battery developers and recyclersbuilders of home and commercial charging stationssuppliers of electric motors and power controls, and so on.

As we continue creating and growing these and many other new sectors, it’s very important that we work together – with SAE – to develop and promote common standards for the industry as a whole.

The 2011 Chevrolet Volt electric car with extended-range capability was named Green Car of the Year.
Photo courtesy GM / Chevrolet Volt
A great example is the SAE-led effort to define a common electric vehicle conductive charging system – the one that’s now in use on the Chevy Volt.

Common standards allow the industry to achieve better results sooner and more efficiently… and accelerate acceptance of new products by the public at large.

If we have to focus on meeting many different standards, we will fragment our engineering efforts and make it harder to achieve the results we all want to see.

And of course the beauty in all this… is that SAE already has the desire and the wherewithal to make it happen.

Let’s work together, let’s work through SAE, and let’s establish the standards that facilitate the EV industry we all want to see.

* * * * * * *

A third area where we can all make a difference for the industry is in education.

Important as they are today, technology and innovation will play even bigger roles in our industry going forward.
In advanced propulsion, yes… but also in telematics, safety, drive-by-wire, vehicle-to-vehicle communication and so on.

Tomorrow’s winners will be those companies – and those countries – that address these realities with high-quality technological solutions.
And yet, we’ve seen a huge drop in recent years in the number of science and engineering graduates in the U.S.

Engineering now makes up just 5 percent of U.S. bachelor’s degrees awarded in the U.S., compared to 20 percent in Asia.
And of all the doctoral degrees in engineering awarded by U.S. universities, more than 50 percent now go to foreign nationals… many of whom return to their native countries to work.

A shortage of U.S. engineers is imminent… and it threatens to undermine our industry’s and our nation’s ability to compete in the global economy.

President Barack Obama and Detroit-Hamtramck Plant Manager Teri Quigley take a look at the 2011 Chevrolet Volt on July 30, 2010.  
Photo courtesy GM / facebook / Chevrolet Volt
As an industry, I think we have a special opportunity – and a special obligation – to help address this situation.

That’s why it’s so important that, as an industry, we support so-called STEM education – Science, Technology, Engineering and Math – at all levels.

At GM, we’ve made support for STEM education a key part of our long-term business strategy.

A few recent examples:

• In November, we auctioned off the first “saleable” Chevrolet Volt for $225,000… and donated the proceeds to the Detroit Public Schools Foundation to support STEM education.

• In February, we announced a new scholarship program called “Buick Achievers,” which will grant scholarships to 1,100 first-time college students next year… in amounts from $2,000 to as much as $25,000. The program encourages more kids to pursue degrees in science, technology, engineering and math… as well as careers in the auto industry.

• And just last week, we named the five area high schools that will benefit from the GM Foundation’s largest-ever donation – $27.1 million to the United Way for Southeastern Michigan. The goal: dramatically increase the region’s high school graduation rate and rebuild its skilled workforce… including those interested in pursuing STEM careers.

Of course, one of GM’s longest commitments to STEM education has been through the SAE Foundation’s 20-year-old “A World in Motion” program.

As many of you know, AWIM goes right to the root of the problem – by working to keep children engaged in math and science between the fourth and seventh grades, when we lose so much of our potential STEM talent.

AWIM brings math and science principles to life through highly interactive programs in physics, motion, flight and electronics.
In fact, I hope some of you had a chance to attend one of AWIM’s newest programs – the first ever “Fuel Cell Olympics” held right here at COBO earlier today.

From what I hear, it was hard to tell who had more fun – the kids, or the volunteers.

At GM, we’re proud of our financial support of AWIM… and even prouder of our employees who volunteer so much of their personal time to make the program such a success.
In each of the last three years, more than 1,200 GM employees have volunteered with AWIM in the U.S. and Canada.

And I know that many of the companies represented here this evening are also committing talent and resources to expand the reach of AWIM.

Daniel F. Akerson, GM Chairman and Chief Executive Officer.
Courtesy of GM
In fact, with the help of more than 25,000 volunteers who have been involved since its inception, AWIM is now instituted in every state in the U.S., and every Canadian province and territory.
And it has reached an amazing 4 million students so far.

Congratulations, SAE…on 20 great years creating and building “A World in Motion.”

* * * * * * *

So – investment, standards, and education – three areas where I believe we all can work together today… to make a difference in the auto industry of tomorrow.

It’s a big challenge, but if I’ve learned anything in my time at GM, it’s that this industry has a remarkable ability to adapt.
The most recent example, of course, is the unfolding tragedy in Japan.

The human suffering there is incalculable, and our thoughts and prayers go out to the people of Japan… and to our friends in the Japanese auto industry.

Meantime, the work that has gone into keeping our supply chain intact… and our operations running... has been remarkable – something of an engineering feat in its own right.

Over the last five weeks, we’ve all been affected.
We’re all feeling it. But based on what we’ve seen so far, I’m confident we’ll continue to work through it… continue to adapt and respond as necessary… and ultimately emerge from this crisis stronger than ever.

Today, I challenge all of us – through our companies, our communities, and SAE – to harness the same spirit of determination we’re seeing today in Japan… to facilitate the future transformation of the auto industry at large.

At GM, we see a logical journey from petroleum-fueled, largely mechanical automobiles… to vehicles that run on electricity.

It’s an unequalled opportunity to reinvent the automobile, as well as the auto business.

It can help us accelerate industry growth in a sustainable way… mitigate and ultimately solve the energy and environmental challenges of the automobile… and create vehicles that are better than their predecessors in virtually every way.

I have no doubt that someday we’ll look back at this time as a period of great change… as the start of the age of electrically driven vehicles.

Prabhakar Patil, CEO – LG Chem Power, Inc., SAE 2011 World Congress Tier One Strategic Partner.
Courtesy of the SAE 2011 World Congress
Someday even further out, we’ll look back at gasoline-fueled cars the way we look at steam engines today… or copper phone lines… or pinhole cameras.
They got us started, they advanced us along the technology road, and then they gave way to better and smarter technologies.

We can facilitate this transformation… make it faster, smoother, better… and we’ll do it, as this year’s theme says, by “Charging Forward Together.”

Thank you… and congratulations on a terrific World Congress

Source: GM


Congress Leadership Team Video Interviews


Congress Industry Leadership Coalition (ILC) Video Interviews


Daniel F. Akerson

GM Chairman and Chief Executive Officer

Daniel F. Akerson
Courtesy of GM
Daniel F. Akerson became GM Chairman effective January 1, 2011 after serving as CEO since September 1, 2010.

Prior to joining General Motors, Akerson was a managing director of The Carlyle Group and the head of global buyout.
He served on the firm's executive committee and was based in Washington, D.C.
He joined the GM board of directors July 24, 2009.

Akerson is a seasoned executive with extensive operating and management experience, having served as chairman, chief executive officer, or president of several major companies, including General Instrument, MCI, Nextel, and XO Communications.

His corporate management experience, private equity track record, and deep understanding of Carlyle’s global operation provided a strong foundation for his leadership of Carlyle’s buyout activities in Asia, Europe, Financial Services, Infrastructure, Japan, and the United States.

Prior to joining Carlyle, Akerson served in several key roles at MCI Communications Corporation from 1983-1993 including executive vice president and chief financial officer from 1987-1990 and president and chief operating officer from 1992-1993.
During his tenure, Akerson formulated and executed MCI’s global strategy.

In 1993, Akerson became a general partner of private equity firm Forstmann Little & Company, during which time he served as chairman and chief executive officer of General Instrument Company from 1993-1995.

While at General Instrument, he led a successful effort to develop and deploy the first digital video, satellite, and cable systems domestically and internationally.

Akerson served as chairman from 1996-2001 and as chief executive officer of Nextel Communications, Inc., from 1996-1999, where he transitioned the company from a regional analog walkie/talkie provider into a national digital wireless competitor.

From late 1999 until January 2003, Akerson served as chairman and chief executive officer of XO Communications, Inc. where he led the successful restructuring of the company.

In addition to serving on GM's Board, Akerson also serves on the Boards of the American Express Company and the U.S. Naval Academy Foundation.

Akerson graduated from the U.S. Naval Academy in 1970 with a bachelor of science in engineering.
He earned his master’s of science in economics from the London School of Economics.

Source: GM


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