Executive Speeches
08 April 2009
"Challenges, Change and the Road to a Better Future"
Stefan Jacoby New York Auto Show Keynote Speech
Thank you for that kind introduction. It is an honor to be the keynote speaker at this breakfast to kick off the 2009 New York International Auto Show.
Like our industry, this show has a long and proud history. It started small in 1900, with just 31 cars.
The star of the 1901 show was the Curved Dash Oldsmobile, one of the first mass-produced cars.
The car's trip from Detroit to New York for the show set a record for the longest automobile journey at that time.
We've come a long way since then.
This event now attracts about a million visitors every year. It is one of the premier auto shows in the world.
The organizers and exhibitors at those early auto shows laid the foundation for a global industry. This industry has had a profound impact on daily life.
For more than a century, we have been on the leading edge of improvements in technology, manufacturing and engineering.
All Americans have a stake in our industry's future.
The automotive industry is this country's largest manufacturing base and ranks among the top investors in research and development.
Those investments are yielding cutting-edge technology for safer, cleaner and more efficient vehicles.
We've helped build the middle class by offering good jobs and good benefits in countries around the world.
We have done well by meeting society's need for affordable, reliable mobility.
Today, we face new challenges.
We are dealing with the worst global economy in a generation.
2008 was a very tough year for our industry, and 2009 is starting out just as challenging.
No one knows how long our current difficulties will last. All of us should recognize that we cannot expect overnight improvement.
We might not see a recovery until the end of 2009 or even 2010.
If current trends continue, auto sales in the United States will fall below 10 million vehicles this year for the first time since the mid-1980s.
But we will get through this tough period. And when we do, we will all be better for it.
Hard times have accelerated innovation throughout our industry.
You can see the change at this year's auto show here in New York.
There is a new focus on fuel efficiency, alternative fuels and sustainable mobility.
Ladies and Gentleman, I'm honored that Volkswagen Group of America is chair of the Alliance of Automobile Manufacturers this year.
The Auto Alliance reflects the global reach of our industry. Our members include American, European and Asian companies.
Together, we produce 77 percent of the cars and light trucks sold in the United States.
This an historic time for the Alliance.
We recognize that our industry is in transition. We are working together to advance public policy and innovation issues.
I want to personally thank Dave McCurdy for his leadership at the Alliance.
We know that fuel economy needs to improve to address problems related to fuel prices, energy security and climate change.
We live in a world where energy security is a priority, and all automakers, regardless of where they are based, have made fuel economy a top priority.
Concern for the environment has no nationality. Technology recognizes no borders.
We are all in this together.
Innovation has been a hallmark of our industry from the start.
The early automotive pioneers tried everything.
They tried steam vehicles… Electric vehicles… Gas engines… Diesel engines.
In fact, auto registration records from 1900 indicate that most of the cars on the road in New York during that first auto show were powered by steam. Electric cars were the second most popular choice.
Before long, though, the industry settled on oil-based fuels.
That may have been the best choice at the time. Now, we can see better alternatives for the long-term future.
We are reinventing the automobile. We are moving as fast as we can toward the goal of sustainable mobility.
At Volkswagen, we are researching every option. We are looking at second-generation biofuels, electric cars, hydrogen fuel cell vehicles and nanotechnology.
We are in a race with our competitors to find the fuel of the future.
Our industry is nearing breakthroughs that will change the automobile as we know it.
But just as we have to be realistic about economic conditions, we have to be realistic about the prospects for alternative fuels.
We have to be honest with ourselves and with the public.
The day is coming when we will be liberated from fossil fuels, but that day is still years away.
We can make cars that run on alternative fuels today. But the conversion will not be immediate. We still have challenges in making these vehicles affordable, practical and reliable.
For all its flaws, the internal combustion engine is a remarkable machine. You can count on it when it is 20 below zero in Fairbanks, Alaska, and when it is 120 degrees in Phoenix, Arizona.
At this moment, we could not say the same for battery powered cars.
The internal combustion engine also can easily last well over 100,000 miles. And wherever you go, you usually have no trouble finding fuel and other necessities to keep the engine running.
Again, the same is not true for battery powered cars.
And, internal combustion engines also are benefitting from significant technological improvements. Clean diesel and optimized gasoline engines are changing the way we think about miles per gallon and emissions.
And this increased efficiency comes without massive expenditures.
Consider that the industry has reduced the emissions from autos by 99 percent since 1970.
And, under the new federal mileage standards we're reducing CO2 emission by 30 percent – by developing and selling more fuel efficient vehicles.
We are getting more mileage out of every gallon of fuel.
Our Jetta TDI has broken world mileage records. During a 48-state trek last year, it averaged more than 58 miles per gallon.
I'm confident that clean diesel will become even more popular as Americans become more familiar with its advantages.
Additional industry technologies such as variable valve timing, cylinder deactivation, continuously variable transmissions, improved aerodynamics, lighter materials, hybridization and other innovative are affordable improvements that might not be obvious to consumers.
We can do more with traffic guidance systems to eliminate fuel-wasting gridlock.
With innovations such as these, we will have cars on the road that get 50, 60 or 70 miles per gallon. That will happen in the next 10 years.
This type of innovation with traditional engines is as exciting as the technology for hybrids, plug-in hybrids and electric cars.
I'm proud that Volkswagen is at the forefront of research and development in those areas and other alternative energy sources.
But, some of these new technologies may be 20 years off before they are mass produced.
In the meantime, we may find better alternatives.
And that's the point: We have to continue to explore all options.
No one can predict which technology will lead to winners and which will lead to losers. We haven't found a silver bullet, so automakers are developing a portfolio of options.
We have to deploy every available option to meet our environmental and energy challenges.
Government policy should encourage research and development, but it should be technology neutral.
The free market works. Everyone here probably has a mobile phone. Think how much mobile phones have changed in the last few years alone.
We've seen the introduction of text messaging, cameras, touch screens and dozens of other innovations. Some innovations were widely accepted. Some were quickly cast aside.
That is the approach we need in the search for alternative fuels and advanced propulsion technology.
And, it is why I am so optimistic about where we are headed in this industry.
We can accomplish so much in the short term as we pursue our long-term goals.
The Alliance of Automobile Manufacturers supports the tough new energy law that raises fuel economy to an average of 35 miles per gallon by 2020, a 40 percent improvement.
The law will lower oil consumption by 1.1 million barrels a day, saving 18 billion gallons of gasoline a year.
Corporate Average Fuel Economy standards will increase, and we support that too. For long-term planning, we would like to have standards set for multiple model years.
And we need national standards on fuel economy that bridge state and federal concerns.
We need more than just tough regulations.
We need a multi-stakeholder approach to energy security and climate change.
The recent drop in energy prices makes the task more complex. Lower fuel costs encourage our dependence on oil-based fuels.
Consumers should remember that, although oil prices are down today, they will not stay down for forever.
Government can help by taking steps to unleash the power of the market.
Taxing diesel fuel at the same level as gasoline would encourage a shift to more fuel efficient clean diesel. European governments are already using that approach.
Diesel provides 20 to 40 percent better mileage while providing 50 percent more torque.
However, it also raises the up-front vehicle cost. Tax incentives could offset that and provide benefit to consumers and the environment.
Government incentives can also be used to encourage Americans to replace polluting older vehicles with newer, fuel-efficient models that are equipped with advanced emission controls.
Such incentives could be modeled after the successful German scrappage program that provides vouchers for the purchase of new cars. This allows consumers to purchase a new vehicle of their choosing.
More than half of the 250 million cars, trucks and vans in the U.S. today are at least 10 years old.
Within the past six months, our industry has experienced four dollar a gallon gasoline, frozen credit markets and a recession that is accelerating job losses and dampening consumer confidence.
A fleet modernization program that is simple, available at the point of sale and focused on a broad range of vehicles would address these issues.
It would help consumers, the auto industry and the environment.
The Auto Alliance is pleased that prominent economists and public policy groups are promoting fleet modernization proposals.
We are eager to work with Congress on an effective program and urge that it be included in legislation moving early this year.
Recent events have reminded us how important the auto industry is.
Our industry is woven into the fabric of American life.
The jobs we provide in our manufacturing plants, at our suppliers and in our dealerships support families and communities across the country.
Now we are at the epicenter of a tectonic shift to a clean energy economy.
We will help lead the way to sustainable mobility, energy security and reduced emissions.
We have reason to be optimistic. But we also have to be realistic. We have to be honest.
We have good news to share. We do not need to exaggerate or create unfounded expectations.
We can do a lot now to improve fuel efficiency and reduce emissions. We are committed to doing that in the future.
This year's auto show features the technologies of today and tomorrow.
Futuristic cars always attract a lot of attention. It is fun to think about what might be coming years from now.
But I hope you will also take a good look at the many path-breaking technologies that are available today — not years from now, but right now.
The cars displayed here are setting new standards for fuel efficiency and reduced emissions. They are packed with innovations that reflect the creativity, hard work and dedication of the talented people in our industry.
The progress we can see here today will lead us to tomorrow's breakthroughs.
The way forward is clear. And we will get there.
Thank you.
