Today, we met Scott Preysler, an area manager for Mini. As I understand it, he works as an interlocutor between the brand and its franchised dealerships, meaning that he manages the movement of vehicles from production to retail. This position seems like a precarious one, considering that the interests of a brand’s headquarters do not always align with the interests of local franchisees. For instance, a brand’s headquarters may not want to cease their factory output, even though dealerships are struggling to sell cars of the lot. Aside from sharing his experience with Mini, Mr. Preysler gave us his opinion about BMW who is trying to slide downmarket by offering premium volume cars instead of luxury imports. This strategy might broaden the appeal of the brand by making products more affordable and available to more consumers. And yet, it might not be wise if maintaining brand image or integrity is the company’s objective. For instance, previous patrons of BMW might have enjoyed the elite connotation of their purchase and might begin to suspect that their cars are losing value as more appear alongside them on the road. Once again, Mr. Preysler described a balance between higher-level and lower-level demands, except this value is not between the brand and its franchises but between the brand and its various types of consumers.
Today, we spent some time at Ford’s famous Rouge factory. This is not the first time I’ve visited an industrial site: I’ve visited the Jelly Belly factory in Pleasant Prairie, Wisconsin, and the Heineken factory in Amsterdam. While both of these places were smaller than the Ford factory by orders of magnitude, I was surprised by the similarities I observed. Not only did both sites utilize moving assembly lines to construct and fashion their products, but they also specialized in a single product. The Ford plant only made F-150 trucks, while the Jelly Belly plant only made jelly bean candys and the Heineken plant only churned out bottles of beer. Not an industrial engineer or supply chain specialist myself, I was impressed by the sheer tempo of the operations at all three sites, perhaps most so at Ford considering the size of the product being assembled. Finally, I was surprised to find so many human workers on Ford’s factory floor. In today’s day and age, one would suspect that most if not all of the processes would be mechanized and the employees replaced with robotic equipment.
After visiting Ford’s production facility, we visited Ford’s global headquarters where the corporate team is stationed. There, we got the chance to meet Hau Thai-Tang, the vice president of global purchasing for the brand. Among the insights Hau had to share with us, my favorite was his breakdown of the automotive industry’s value chain. As it stands, businesses like Ford are being outdone by disruptive competitors in areas such as operations and service. For example, Uber and Tesla are innovating with strategies that make purchasing and using vehicles easier than ever. These newcomers to the field are moving past the usual business model of the existing players which concentrates only on the performance of the product and the quality standards of franchised sellers. By deploying technologies that increase consumers’ access to and enjoyment of the product, these disruptive firms are forcing Ford and its peers to quit being car companies and focus on building reputations as mobility companies. This way, consumers can actually maximize their automotive experience both on the road and off of it, at the dealership and behind the wheel.
Today, we met Tyree Guyton, the man behind the Heidelberg Project. Going into the meeting, I had high hopes that this was going to be a chance to make some sense of a baffling piece of art. However, when we talked to him about his artistic enterprise, I felt increasingly incredulous and frustrated. What exactly was the purpose of this installation, besides artistic expression and publicity. I’m sorry to sound unimaginative but I can’t support the usage of art without a reason. Not to mention that the art in question is actually aesthetically unpleasing to me. As it is, I can’t think of a good justification for a public art display that actually makes the surrounding space look worse. As an eyesore, the Heidelberg Project might even contribute negatively to the value of its neighborhood, an area already riddled with abandoned houses and overgrown yards. If Mr. Guyton wants to make a statement about the state of the world and the problems of the day, I would advise him to do so in a gallery, where his work doesn’t make a stylized mockery of the local poverty.
Later today, we went out to dinner with some journalists from Automotive News. At my end of the table sat Jim Treece who made for very pleasant company throughout the meal. We talked about his experience covering the automotive industry as a reporter and commentator. His career really sounded phenomenal; after all, it spanned multiple countries (Japan, Malaysia, China, and Korea just to name a few he mentioned). More than that, Treece also had lots to say about the future of the car industry, namely the emergence of electric cars. He himself drives a Chevy Volt, a plug-in hybrid, to and from work everyday. While we critique Tesla for its under-productivity and the empty promises it makes to its customers, Treece’s critique was slightly different. He worried that American driving culture could not be sustained by electric vehicles. First of all, the batteries are not big enough to allow for more than 200-300 miles in a single drive. Second, the road trips Americans are apt to undertake demand a recharge after 200-300 miles, but that recharge might not be possible if recharging stations are not widespread and ubiquitous. Lastly, the electricity that powers Chevy’s Volt, Nissan’s Leaf, and the entire Tesla fleet is marketed as a green alternative to the oil-based fuels used today. That might be a confusing concept for the public, given that electricity does not have altogether clean origins. It should be kept in mind that the power plants generating electricity for the grid burn coal and expel carbon emissions. All too quickly, the public forgets that the electric alternative has tradeoffs of its own. Hopefully, as Treece told me, the automotive industry will work with power plants to make electricity itself a more environmentally-friendly input, so that electric vehicles can live up to their green reputations.
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