"What America drives, drives America," says the slogan of the American Automobile Manufacturers Association (AAMA), the trade association of the three American car manufacturing companiesChrysler, Ford and General Motors. And the influence of the automotive industry can hardly be overrated. It is the country's largest manufacturing industry, contributing $260 billion a year to the economy. Those three companies rank among the world's largest corporations, with a combined employment base of nearly 700,000 and a total payroll in excess of $35 billion annually. Together with their suppliers and dealers, they employ 2.3 million Americans in more than 4,000 facilities and 18,000 dealerships throughout the United States. According to the AAMA, one out of every seven jobs in this country is automotive-related.
With this much muscle, it's no surprise that three out of four vehicles sold in the United States are manufactured by the Big Three, which sold 11.1 million vehicles in 1996 (the most recent figures available). Of the ten best-selling vehicles of 1996, seven were American-made. (The other three were Japanese.) And General Motors, Ford and Chrysler are the three largest exporting companies in the United States, sending vehicles to more than 100 other countries. Their exports of cars and trucks have increased by 73% since 1990. American cars have about 25% of the market in Western Europe, and exports to Latin America and Asia have risen substantiallyespecially to Latin America, where pickup trucks, sport utility vehicles and vans are increasingly popular and where NAFTA has had a positive effect on the market.
The restricted Asian market is one of two factors limiting the growth and profits of the American automotive industry. The Korean market, effectively closed for many years, has become more accessible since 1996. (Before then, regulations limited the number and size of foreign-owned car dealerships, and prime time television advertising by foreign car manufacturers was forbidden.) The Japanese market, the second largest in the world, is still largely inaccessible despite the efforts of the United States to influence legislation; while America has between 36% and 79% of most foreign automotive markets, its share of the Japanese market is only 5.65%. Labor disputes, such as the General Motors strike last summer, also affect profits.
But these are minor setbacks in the face of the industry's increasing global activity. Perhaps the most striking example is the recently signed merger between Chrysler and Daimler-Benz, which is expected to be complete by the end of this year. The resulting company, called DaimlerChrysler, will be incorporated in Germany, with two operational headquarters (Stuttgart, Germany, and Auburn Hills, Mich.). The merger, valued at $92 billion, will create an automotive corporation ranked in the world's top three in terms of revenue, capitalization and earnings, with 421,000 employees worldwide.
Driving Into the Future
Besides its premier position in commerce, the American automotive industry is also the leader in research and development. It is responsible for 12% of the nation's corporate research and developmentmore than the pharmaceutical, electronics or computer industries. Worldwide, the Big Three U.S. car companies spent $17 billion on research in the last five years.
A large portion of this research is devoted to environmental interests. For example, more than 50% of Ford Scientific Laboratory's research budget is devoted to environmental technologies. Ballard Power Systems, a leading supplier of fuel power systems to Daimler-Benz, Ford, General Motors, Hitachi, Honda, Mazda, Nissan, Volkswagen and Volvo, is involved in partnerships with Daimler-Benz and Ford to develop a commercially viable zero-emission engine, powered by electric fuel cells, by the year 2004.
Other projects include a hybrid electric vehicle which combines a heat engine or fuel cell with energy storage and an electric drive, a single-shaft turbogenerator for such a vehicle, and a compression-ignition, direct-injection engine. Materials research and structural research in the automotive field are still in the concept stage, involving the use of polymer composites, aluminum and steel space-frame vehicle structures. This research, if successful, has the potential to reduce automobile weight by as much as 50% while also reducing manufacturing costs.
Current manufacturing also makes use of new technologies, many of them developed at corporate research facilities. In 1995, Ford invested in generating computer-aided engineering (CAE) models so that virtual prototypes can be used in the design and testing processes to improve quality, lower costs and reduce development time. Vehicle Durability Identification and Assessment is a CAE method that can predict dynamic durability performance for an entire vehicle, down to its smallest components. Using detailed, full-color displays, engineers can visualize a vehicle in the most demanding, real-world uses_such as driving over potholes, pulling a trailer up a mountainside or crossing a set of railroad tracks, over and over again. This allows Ford to almost eliminate costly prototypes in its product development process.
"We build and test roughly 100,000 models a year on the computer, compared to maybe 1,000 in 1993," explains Greg Stevens, the CAE supervisor who leads the development of the software tool set now used worldwide by some 50 Ford vehicle dynamics engineers in North America, Europe, Australia and Japan.
The auto industry's interest in computers does not stop with the design process. "The amount of software in a vehicle is increasing by 20% to 30% a year," says Robert Schumacher, director of advanced engineering at General Motors' Delphi Delco unit. In partnerships with Sun Microsystems, IBM and Microsoft, manufacturers are designing software that would feed information from the brake or airbag electronics to a display managed by an on-board PC, warning for instance that it is time to get the brakes inspected. (There are no plans for computer-operated systems actually controlling functions such as steering, brakes or airbags.) General Motors and others are working with several different computer companies to develop an "open" vehicle computing system rather than one that is dependent on the software of any specific company.
With a focus on the driver, Clarion Corp. has taken the "home office" concept one step further. It offers a personal computer for cars, using Microsoft's Auto PC software. For $1,299 (wireless modem not included), a driver will be able to retrieve electronic mail or make a cellular phone call without letting go of the wheel. Ford, Microsoft and Intel are collaborating to develop a speech-recognizing car PC, called ICES, and Delphi Delco Electronics is also developing an automobile PC based on Microsoft software.
"We spend so much time in our cars," says Perry Lee, Microsoft's product manager for Auto PC. "Why make that downtime? Why not make it productive?"
According to The Wall Street Journal, car companies are also working on sophisticated on-board entertainment systems linked to the World Wide Web.
A Career That's Going Places
What does the automotive industry look for in an engineer? There is a concentrated demand for automotive engineers, according to industry experts. David Cole, director of the automotive transportation engineering program and dean of engineering at the University of Michigan, says, "There will be a big demand for automotive engineers. The main difficulty for the automotive industry over the next ten years will be finding the right engineer for the right discipline."
With increased use of computer technology and the global focus of the industry, computer skills and foreign languages will give an entry-level candidate a greater range of employment options. Dan Goodwin, executive engineer at Chrysler, remarks, "We're looking for the person who demonstrates solid training, leadership and communications skills and teamwork." Continuous learning is also a value Chrysler expects, notes Goodwin.
Ford recruiters look for well-rounded candidates with excellent communication and analytical skills, and expertise in handling conflict, with extra points for those with an advanced degree. The Ford web site trumpets a call for "top 20% of class, no technology degrees, M.S. preferred."
The auto companies are also committed to improving the diversity of their workplaces. "We want to make sure that our engineers represent the real-world marketplace," says Ford spokesperson Francine Romine-McBride. "The more diverse your work force, the better company you will have."
For its efforts, General Motors was recently named one of the top 50 Fortune 500 companies for Hispanic women to work for in the United States by LATINA Style magazine, a national publication for Hispanic women.
Specific salary information for new technical professionals in the auto industry is hard to come by from manufacturers, perhaps indicating intense competition for graduates among rivals and the proprietary nature of such information. "Major auto manufacturers are having a difficult time getting entry-level candidates," acknowledges Jim Harbour of Harbour and Associates, an auto analyst, "and when they find them, they offer them tremendous incentives to join."
The National Association of Colleges and Employers (NACE), in its September 1998 survey, estimates average salaries for entry-level engineers in the "automotive and mechanical" industry. Electrical and chemical engineers lead the field with average offered compensation of more than $43,000 ($43,035 and $43,055, respectively). Computer scientists in these industries received offers that averaged $42,721. Mechanical engineers are not far behind at $41,148, and industrial engineers notched in at an average $40,735.