Carmakers under pressure are forging new alliances
The 8th Automotive Logistics Global conference has come to an end with 260 delegates from more than 12 countries attending. Held at The Ritz-Carlton in Dearborn, Michigan, many attendees have already testified to how they found the two-day event not only enjoyable but also highly beneficial and interesting.
The 2007 attendees included representatives from:
Bentley Motor Cars
Ford Motor Co.
"The conference is a high level overview of issues facing LSPs and OEMs. Overall, a very good opportunity to share best practices."
Raakesh Syal, Business Analyst, Toyota
"Not only a great forum for the future of logistics but also for the future of the automotive industry."
Rochell Govier, Sales and Distribution Manager, Bentley Motors
"A great forum for the new direction of the auto industry in the area of collaboration."
Michael Nelson, National Manager, Highway Transportation Logistics, Toyota
As the industrial action taken by the UAW in the run up to this year's Automotive Logistics Global conference made clear, Detroit carmakers are facing increasing pressures. It is these pressures that are forging new alliances between competitors in the automotive market. At last year's conference, the logistics leaders from Chrysler, GM, Ford and VW announced that they were going to work together. True to their word, in the final session of this year's event they revealed several projects that are already underway or in the pilot stage – collaborative projects targeting the movement of finished vehicles in North America.
All four OEMs used AL Global 2007 to make their mission statement, and to announce the creation of teams dedicated to finding common routes, using the AIAG as an umbrella organisation. "This is a fine, fine line," said GM's Tom McMillen. "And collectively, we will find the sweet spots. There are tremendous opportunities in our networks." Honda and Toyota are also considering joining the collaborative effort, and will participate in upcoming meetings.
Environmental factors were high on the agenda at this year's conference. Companies, including logistics service providers, made it clear that they are well aware of the need to measure and address the extent of their carbon footprint. However, Peter Klein, a consultant from CarbonView, made it clear that the automotive and transport industries are way behind other sectors, such as retail, in recognising and reducing their carbon output.
Jeff Schuster from JD Power identified a shift in US consumer buying patterns to smaller vehicles, as well as clean diesel and hybrid versions.
Following on from his exclusive interview in Automotive Logistics magazine's Tenth Anniversary issue in July, Bo Andersson, Group Vice President, Global Purchasing and Supply Chain for GM, made a guest presentation speech at the Ryder-sponsored anniversary gala dinner. He reiterated the importance of logistics for carmakers and told the LSPs present: "We expect you to know your business globally. If you want to grow with us, we expect you to go to emerging markets with us, including Russia, China, Mexico, Latin America etc."
Another key message to come out of the conference was that, to win business with global carmakers in both established and emerging markets, LSPs needed to invest in assets, infrastructure and capacity.