John McElroy: Michigan’s Auto Industry Embarks on a Dangerous Decade
February 26, 2020“Autoline” host John McElroy encouraged attendees at the 2020 MICHauto Summit in his keynote address to be proactive, not reactive, when planning for the industry’s next decade. McElroy emphasized that automakers will face both direct and indirect costs in their innovative practices.
“We are embarking on a very dangerous decade,” said McElroy. “The traditional auto industry is under threat.”
Starting with electric vehicle development, McElroy discussed how automakers are building EVs because of government regulations, not consumer demand. This results in automakers not making money on production. Additionally, electric vehicles only feature 10 engine forgings – a fraction of traditional internal combustion engines. This results in less work for the foraging industry and potential future foraging plant shutdowns.
In the race to develop autonomous vehicles, automakers spend massive research and design budgets, sometimes more than $1 billion per year. And while McElroy agreed with the idea of spending more money on autonomous vehicles, he pointed out that it is a heavy financial burden with no tangible return on investment (at least right now).
McElroy considered aspects of Michigan’s economy that need to improve for the state to lead the next decade of automotive and mobility:
- Nurture the startup economy and look to other locations where they are successful.
- Work with the defense industry to recruit the best and brightest.
- Welcome and support incoming immigrants as they look for industry jobs.
- Continue to collaborate and find ways to better Michigan’s education system
By having a genuine sense of urgency in these focus areas, McElroy believes Michigan will be in a better position to lead the next decade in the global mobility revolution.