Meeting with the Global Economist with Ford was enlightening. It’s was interesting to see how applicable the basic micro models are to the auto industry. I couldn’t quite figure out the balance, in their daily workflow, between automated formulaic analysis based on select data streams and heuristic analysis based on savvy and experience. Although Washington and Lee courses seem to emphasize the human element of analysis, I imagine Ford as to rely heavily on automated data crunching given the small size of its global economics team.
We also met with Federal Mogul. Although I understood their products and their place in the market, they were so heavily focused on engineering that I had a difficult time understand the tour based on the engineering jargon. Despite my inability to understand specific roles of individual engineers at Federal Mogul, I did start to see a theme that turned out to be a common one amongst Tier 1 Automotive suppliers: there is limited competition for the parts each firm produces. Federal Mogul was the number one or two supplier for almost every product it produced. The site manager, Mr. Westbrook informed us that there was only 1 other major competitor in the industry selling parts comparable to their own.
Our next appointment, and one that I thought was amongst the most important of the trip despite not being directly integrated with the automotive supply chain, was with the local Fed in Detroit. They explained their role as one that takes the pulse of the region and provides economic analysis based on their findings. We heard a fantastic presentation that looked at current economic trends in Detroit in relation to the Great Recession and comparing this recovery with recoveries from other Recessions in the last 50 years. Outside of the data they used to demonstrate their claims, it was helpful to hear the thought that went into their analysis. In addition to their general analysis, and the monetary policy function, they also write briefs on important local issues, such as the Detroit Bankruptcy, that provide information and analysis for those who might not have time to do the research themselves, but still want to remain informed. It was the best demonstration of the discipline of Economics I have ever seen in industry, government, or academia.
We also met with the Head of Human Resources and Corporate Services at Ford with one of her executives. They gave us a presentation on the One Ford plans and how human resources fit into that plan. I didn’t feel that I was able to fully grasp the role of Human Resources based on the presentation. Obviously they do all the hiring, which is huge, but I thought they wanted us to take something more from the presentation, I just couldn’t quite grasp what it was. Partially this was related to the brisk speed of the presentation and the limited question time available. Partially, it was related to the enormous volume of industry and Ford specific acronyms. On the other hand, it was helpful to observe a high level executive at work. I got the feeling, we were receiving a presentation in a manner similar to on an investor would receive. It was professional, but not at all robotic. They didn’t come off as trying to sell anything (which can be overbearing). I fell like I learned a lot about where Ford wants to be in a few years.
Finally, we went to the Tigers game against the Astros. They wiped the floor with Houston. It was nice to see some vibrancy in Detroit. After all of the horror stories and negative media coverage is over, there are still 700,000 people living and working, and going to school in Detroit. The city is certainly alive. It’s evolving, but definitely not dead right now.
Visiting the Heidelburg Project was…interesting. It was a Detroit-Specific artistic form. It wasn’t beautiful, but it was absolutely captivating.
the University of Michigan Technology Research Institute (UMTRI), was another of my favorite visits. As a computer scientist, I thought their technology research was amazing. the tools they used, and the way they store, access, and catalog their data was cool. the Study design was great. it was all just amazing. In terms of the automotive industry, this is definitely where I got the best understanding of the government’s role in the industry and in transportation infrastructure. Seeing a practical example of how the government funds studies that become the foundation of further technological development by OEM’s was invaluable. It’s also clear that the government has the power to steer the automotive industry using research funding to a much greater extend than the average consumer would imagine (and probably more than the OEM’s realize themselves). The researchers casually addressed the problem of providing public goods without addressing the economic theories directly. I wonder if anyone else in the class caught it.
Finally, we had a (delicious) dinner with 3 journalist from Automotive News magazine that was a nice change of pace. They were collectively a fantastic repository of information on the industry in general, which was nice toward the later stages of the class/trip because we had a good basis of questions to ask. If this conversation had happened too early, we wouldn’t have been ready to ask good questions, or understand their responses to Smitka’s questions. In particular, I remember a conversation about Tesla that gave a realistic analysis of their current business model (selling carbon credits), their challenges (scaling up while driving down costs), and their chances of surviving in the market (probably less then 50%, but you can’t ever count out a Genius like Musk). He literally touched on everything I had heard about Tesla in the first 3 weeks of class in 15 minutes. Seems like there is a place for a great journalist at the OEM’s just given their knowledge of the breadth of the industry, but maybe Automotive News is paying more than I imagine.