This is a critical time in our industry. My goal is to sound a call to action for each of you to become an advocate for our industry, as well as for your company.
Record sales, record product introductions and record marketing expenditures all in one year once meant record profits. But it's not working anymore. Did you ever work harder to earn less? What's going on?
We are being attacked by three outside forces that are reshaping everything we know. And we are fighting back against only the symptoms, not the root causes.
Do you remember the old comic strip, 'Pogo'? In one of its most famous scenes, Pogo Possum encounters an area of his swamp that has been trashed with tires, bottles, cans, buckets and old cars. As Pogo and a friend survey the mess, his pal says 'It's hard walkin' on this stuff,' and Pogo replies simply, 'Yep, son, we have met the enemy, and he is us.'
Unless we are careful and work together to clean things up, we will find ourselves at that same swampy crossroad. In our case, the swamp is littered with the Tread Act, following the Firestone tire affair; tougher corporate average fuel economy standards; roll-over rankings; air quality acts; the California zero emissions vehicle mandate; factory stores; diminishing grosses; Blue Ovals and mandatory arbitration.
The enemy is within, and, to borrow from Pogo, it is us.
We must quit fussing among ourselves and work together to tackle major issues that will make or break our business. They include social concerns, economic realities and growing customer empowerment.
You have seen the plight of other industries that have failed to listen to public concerns about their products.
America's love affair with the automobile continues, but our good standing with the public could become more precarious if we don't address issues that affect everyone.
People are already showing alarm about our inaction. In a recent study by Wirthlin Worldwide, Americans ranked the automotive industry third from the bottom among industries perceived to be helping to solve environmental problems.
We must put our differences behind us. We must become an industry that is involved, responsive and helpful in finding solutions.
Somehow we have gotten our economic stars way out of alignment.
Even though we are selling more vehicles, our margins and profits are being squeezed. We all feel it, but we have been slow to respond, hoping larger and larger incentives will fix the illness.
The real solution is for manufacturers to stop designing and building products people don't want. Products must be appealing and priced right.
We also can work on taking cost out of our system. So far, most of the cost cutting has centered on product and manufacturing. The cost of producing vehicles now is less than 50 percent of the total cost.
That leads to the third issue: the growing empowerment of our customers. With so much information at their fingertips, consumers are much smarter about the costs and methods of our business.
Differences between products have become less pronounced. As a result, our challenge is to shift from information-based selling to relationship-based selling.
Let's work toward a day when customers get as big a kick out of visiting their local dealership as they do driving their new car off the lot.
Our industry has unlimited potential in the United States if we stop being our own worst enemy.
Let's make sure that many years from now, we can look back on 2001 not only as the turning point of a new century but also as a turning point for our industry.
This is excerpted from an address to J.D. Power and Associates' International Automotive Roundtable in Las Vegas on Feb. 2.