Executive Speeches
29 April 2009
Stefan Jacoby "Spirit of Innovation" Speech
Chattanooga Convention Center
Thank you, Tom Edd, for that kind introduction. It is an honor to be here with Mayor Claude Ramsey of Hamilton County, Mayor Ron Littlefield of Chattanooga and all of you.
I want to thank the Chattanooga Chamber of Commerce, the Chattanooga Technology Council and the sponsors of today's luncheon for hosting this event.
And, of course, I want to congratulate the Kruesi award winners. You and all of the finalists for this year's awards help make this region a cradle of creativity and innovation. You are role models for us all.
The forward-looking attitude in this area is one of the primary reasons Volkswagen picked Chattanooga for our new manufacturing facility.
I have often said that our decision was guided by our hearts as well as our heads. Chattanooga not only met our objective criteria, it also felt right.
Standing here today, I'm more convinced than ever we made the right choice.
This luncheon and these awards celebrate the spirit that drives our company.
It is also fitting that the Kruesi Award honors the work of a machinist. John Kruesi, a Swiss immigrant whose son, Paul, settled in Chattanooga.
John Kruesi knew how to make good ideas become a reality.
Innovation occurs when the dreamer and the do-er join forces.
As Kruesi's colleague, Thomas Edison, put it: "Opportunity is missed by most people because it is dressed in overalls and looks like work."
To me, that is one is the most exciting aspects of the automobile industry. We put technology to work for consumers around the world.
We turn concepts into cars.
Earlier this month a delegation from Tennessee got to see this first hand in Germany. As one of the attendees put it, it was a "great opportunity to experience the complete development of a Volkswagen, from prototype development to outbound transportation logistics."
I'm glad the Tennesseeans enjoyed the visit, I can report that our leadership team did as well.
It is true that as we meet here, a team of Volkswagen engineers is finalizing plans for a new midsize sedan.
The car that is on the drawing board and in prototype today will roll of the production in line here in Tennessee in just a few years.
The Chattanooga plant is an integral part of our plan to sell a million cars in the U.S. market by 2018.
It is a $1 billion bet on the future of this company, this community and this country.
Some question the wisdom of that bet, especially now, when car sales are down.
The truth is, if we don't invest now, we destroy your future. Companies have to invest in future technology and future products.
Of course, we are cutting costs wherever we can. But we are not backing away one inch from our plans for Chattanooga.
It's not a risk, it's an opportunity. We know it will pay off — for Volkswagen and for this region.
The Chattanooga plant is a great example of business, government and academia working together.
Our mutually supportive relationship will create jobs, encourage economic growth and help solidify Chattanooga's growing reputation as a center of innovation.
Foresighted government leadership makes a difference. I applaud Senators Corker and Alexander, Representative Wamp, Mayors Littlefield and Ramsey and Governor Bredesen and his team for the vision and willingness to work with business.
It is no accident that Volkswagen, Wacker Chemie and Hemlock Semiconductor have all decided to build major manufacturing facilities in Tennessee.
Success breeds success. You can almost feel the momentum that is propelling this region to a better future.
All the pieces are coming together in a multiplier effect.
Consider just some of the things that are happening because of our move here.
The state of Tennessee is investing in a state-of-the-art training facility that will prepare workers for good-paying automotive jobs.
Chattanooga State will be a lead partner in this effort and is expanding its technology curriculum.
Volkswagen is investing more than $5 million for educational improvements in Hamilton County and at colleges, universities and other educational institutions across the state.
All of those investments — by government, academia and Volkswagen — seek to create a well-educated, highly qualified workforce.
Of course, I hope that the state's best and brightest students will join us at Volkswagen. But even if they take their talents elsewhere, they will enrich and strengthen this community and this state.
Our support for education is deliberately wide-ranging. We want to reach students from kindergarten to the state's top post-graduate institutions.
We believe that it is never too early to nurture a culture of innovation and learning.
Investing in young students is another way of investing in the future.
Speaking of the future….
I'm sure many of you have questions about the future of the auto industry.
It is no secret that these are challenging times for car manufacturers.
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 in more than a decade.
Volkswagen is not immune to the global economic downturn. But we are well positioned to deal with it.
Like our competitors, we sold fewer cars in the United States last year.
But the market share for our Volkswagen brands increased 30 percent in the first 3 months of this year.
Globally, our company stood out from the pack in 2008 by selling a record number of cars.
I would not count on that this year. But we are ready for takeoff when the economy revives — and we all know it will.
The tough economic environment is accelerating trends that are transforming our industry.
The automobile industry has been at the leading edge of improvements in technology, manufacturing and engineering for more than century.
We are the backbone of this country's manufacturing base and one of the largest investors in research and development.
Today, more than ever, we are focused on innovations that increase energy efficiency.
We know that fuel economy needs to improve to address problems related to fuel prices, energy security and climate change.
We are reinventing the automobile.
No one can predict which technology will best meet the needs of consumers and the environment.
We might even come up with an entirely new business model.
The great thing about innovation is you never know where it will lead. All we need is the freedom to experiment.
Freedom is a catalyst for innovation.
At Volkswagen, we're worked to create an atmosphere of freedom within the company to encourage creative thinking.
We've broken down silos. We encourage risk-taking and fresh ideas.
Government policy should do the same. It should encourage innovation, but it should be technology neutral.
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 were widely accepted. Some were quickly cast aside.
Consider the light bulb. They say that Edison and Kruesi tried 10,000 variations before they perfected the light bulb.
Here's what Edison said about that: "I haven't failed. I've found 10,000 ways that don't work."
That is the approach we need in the search for alternative fuels and advanced propulsion technology.
At Volkswagen, our goal is a zero-emission vehicle.
The day is coming when we will be liberated from fossil fuels, but that day is still years away.
We have reason to be optimistic. But we also have to be realistic.
We can make cars that run on alternative fuels today. We do not have the infrastructure or the market demand to support them.
We still have challenges in making these vehicles affordable, practical, reliable and safe.
That is why we are taking a two-track approach at Volkswagen.
We are looking for the fuel of tomorrow while doing everything we can to get the most out today's fuels.
We are researching all reasonable options for alternative fuels. We are looking at second-generation biofuels, electric cars, hydrogen fuel cell vehicles and nanotechnology.
And we are working just as hard to improve the efficiency of gasoline and diesel vehicles.
We can do a lot more with technology that is available right now.
By putting technology to work, our industry has reduced auto emissions by 99 percent since 1970.
Under the new federal mileage standards we're reducing CO2 emission by 30 percent.
Clean diesel and optimized gasoline engines are changing the way we think about mileage and emissions.
Our clean diesel Jetta TDI is setting world mileage records. During a 48-state trek last year, it averaged more than 58 miles per gallon.
And, 30 percent of the vehicles produced in Chattanooga will have this clean diesel technology.
Other innovations also increase fuel efficiency.
Consumers are reaping the benefits of variable valve timing, cylinder deactivation, continuously variable transmissions, improved aerodynamics, lighter materials, and a host of other affordable improvements.
For example, traffic guidance systems can help us 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.
I spoke of partnerships earlier.
In the race to innovation, government and universities also play a role.
For example, government incentives help unleash the power of the market.
More than half of the 250 million cars, trucks and vans in the U.S. today are at least 10 years old. President Obama has thrown his support behind a plan that would help replace those polluting older vehicles with newer, fuel-efficient models.
The owners of older cars would be given vouchers to help them purchase a new car of their choosing. A successful scrappage program would help consumers, the environment and the automobile industry.
It's worked in Europe and stimulus packages work in Brazil and in Asia.
It would work here as well.
Solutions are also coming from the best and brightest minds at our universities. As part of our new partnerships here in Tennessee and Virginia, we have seen how young minds are tackling old problems unhampered by the conventional wisdom of the day.
Volkswagen has always embraced new ideas and new thinking.
And perhaps that is why, despite the challenge of the times, I am excited.
The pace of innovation is accelerating.
And, thanks to our partners in Tennessee, Volkswagen will be at the forefront of change.
The spirit that we celebrate here today will help lead us all to a better tomorrow.
