Kuangdi Zhao

Day 1

In the morning we visited Ford World Headquarter. I was told that it is a building older than 50 years old. It looks much younger than it actually is. We were hosted by Ford’s chief economist. I found two points that she mentioned are particularly interesting.

The first point is that Ford’s analysis of market is mostly data driven. The chief economist said that most of her time is spent on trying to figure out where the demand for vehicles are. Ford has specialist economists focusing on analyzing demands in different countries. There are economists looking at China, US, Europe, and other regions. The primary goal of these analysis is to help Ford to match supply (production) with demand.

The second point is Ford requires data transparency at every single stage of production. By doing so, managers know where costs come from, and this subsequently makes it easier for them to cut costs.

 

 

 

 

 

 

 

In the afternoon, we visited Federal-Mogul, a top tier auto supplier. We learned from our visit that Federal-Mogul is a subsidiary of Icahn enterprise. The founder of Icahn Enterprise is billionaire Carl Icahn. One of the executives of Federal-Mogul commented that it is also good to have someone that has money to back them up.

Like all research labs, Fedearl-Mogul considers human capitals as its most important and valuable assets, even considering Federal-Mogul has machines that worth millions of dollars. Human capitals are what keep Federal-Mogul successful when confronted by competitions. Federal-Moguls’ engineers are actively seeking for opportunities make better products by applying their scientific knowledge.

Reduction in emission, minimization of friction, and increase in efficiency are the ultimate goals of Federal-Moguls. These are also what today’s vehicles need.

Day 2

In the morning, we visited Federal Reserve Bank of Chicago-Detroit branch. My first impression was that this must be a heavily arm guarded place. In fact, it is.

I think this is one of the most interesting places we visited in Detroit. We met two of its economists. One of them first gave us the overall of US economy performance in the first quarter. Sadly, US economy only rose 0.1% comparing to last quarter. It is also noteworthy to point out that much of that growth is due to the increase in consumer expenditures. All other sections, from investment to government expenditures to exports, had all gone down. I think perhaps now it is time for US to restructure its economy. I also realized that there was an obvious link between dollar supply and US GDP. The Federal Reserve Bank has been issuing and printing new money for years. The interest rate cannot be possibly lower. This provides firms the opportunities to borrow as much as they can, which definitely helped them a lot.

 

 

 

 

 

 

 

 

 

The second guy talked a little bit about the bankruptcy of Detroit. He believes that the exit of auto industry is not the only reason that led Detroit to bankruptcy. Besides the exit of auto industry, poor leadership, lack of public service, insufficient number of schools, rivalries to outsiders, and racism all played important roles in the bankruptcy of Detroit. He mentioned that at one time, there were only ten cops in Detroit.

In the afternoon, we visited Ford World Headquarter again, hosted this time by senior executives from HR department. The HR executive shared her concerns that too many US students today are interested in the fields of consulting, banking, and finance, and there are not enough STEM students. She is worried that this will put industrial companies in US into disadvantages when facing global competition. I totally agree with her. She also pointed out the trend of future is globalization. Being accepting and respectful to other cultures are crucial for businesses.

In the evening, we enjoyed a game at Detroit Tiger’s baseball stadium. It was very……cold.

 

Day 3

In the morning we visited the Hiedelberg Project and DIA museum, both are very interesting places.

In the afternoon we went to University of Michigan Transportation Research Institute. I was impressed by how TRI can turn technology into business ideas and practices.

Day 4

In the morning, we visited Henry Ford Museum. We found that Ford models were getting uglier every year.

 

In the afternoon, we visited Brose, a top tier German supplier.