Autos, Energy and the Environment

Conference Overview

Few other industries have shaped the economic and social fabric of the United States as much as the auto industry has. Yet increased competition from overseas, technological challenges, calls for increased fuel economy, and environmental concerns now threaten the future of this central piece of classic American culture. These concerns brought together auto and fuel industry leaders, technological experts, and environmental advocates in November for a Policy Conference co-hosted by Resources for the Future and New York University's Leonard N. Stern School of Business.

Panel participants included Thomas Sidlik, executive vice president of Global Procurement and Supply, DaimlerChrysler Corporation; Donald Paul, vice president and chief technology officer of the ChevronTexaco Corporation; Charles Shulock, vehicle program specialist with the California Air Resources Board; and Christopher Grundler, deputy director of the Office of Transportation and Air Quality at EPA.

Discussions over the course of three panels centered on two general topic areas: financial concerns within the industry, and the challenges of meeting environmental requirements from policymakers and consumers. Auto executives touched on the pressures they feel due to stagnant volume sales, competition from foreign manufacturers, healthcare costs rising by double-digit percentages each year, and pension issues as large numbers of employees reach retirement age. Maryann Keller, president of Maryann Keller & Associates, noted that, after accounting for unprofitable sales to rental car fleets and "friends and family" discounts, U.S. auto manufacturers aren't really selling more cars in the United States than their foreign counterparts.

Declining market share means that production costs per unit are rising, making it more difficult for auto manufacturers to invest in alternative technologies. Meanwhile, fuel industry experts acknowledge an increased demand for energy security and "zero impact" environmental performance. Grundler feels that, at this stage, winners and losers in future fuel and technology sources cannot be predicted. RFF Senior Fellow Raymond Kopp noted that there are currently no viable fuel alternatives to petroleum. However, said Dennis Cuneo, senior vice president of Toyota Motors North America and Toyota Motor Manufacturing North America, there is a waiting list for hybrid vehicles such as the Toyota Prius. Cuneo believes a viable hydrogen market is going to require coordination amongst the auto industry and the government, to truly be successful.

While answers to these issues are not easily found, conference participants did clearly convey that the challenges facing U.S. automakers in the future are sizable and are being felt throughout the industry. Energy efficiency, alternative fuel sources, and the future of American carmakers depend upon their ability to meet economic and research challenges at home and abroad in the years ahead.

Opening Remarks

Thomas F. Cooley
Dean, NYU Stern School of Business

Thomas F. Cooley, a noted economist, assumed the deanship of New York University Stern School of Business in August 2002. Dean Cooley is the Paganelli-Bull Professor of Economics at NYU Stern, as well as a professor of economics in the Faculty of Arts and Science.

Recognized as a national leader in macroeconomic theory and business education, Dean Cooley has been published in numerous journals and is the author of Frontiers of Business Cycle Research. Prior to joining NYU Stern in 1999, Dean Cooley held academic posts at the University of Rochester (1992-2000 and 1987-1992), the University of Pennsylvania (1995-1997), and the University of California, Santa Barbara (1980-1987). Dean Cooley received his B.S. from Rensselaer Polytechnic Institute, and his M.A. and Ph.D. from the University of Pennsylvania. He also holds a doctorem honoris causa from the Stockholm School of Economics.

Paul Portney
President and Senior Fellow
Resources for the Future

An economist by training, Dr. Portney joined the research staff of RFF in 1972. Since then, he has become a senior fellow and directed two of RFF's research divisions.

He was named RFF's vice president in 1989 and was named president in 1995. From 1979-1980, Dr. Portney took leave from RFF to be the chief economist at the Council on Environmental Quality in the Executive Office of the President. He has been a visiting professor at the University of California-Berkeley (1977-1979), and taught a course at Princeton University (1992-1994). He is the author, coauthor, or editor of ten books, including Public Policies for Environmental Protection, now in its second edition, and the recently released New Approaches on Energy and the Environment: Policy Advice for the President. Dr. Portney received his bachelor's degree in economics and mathematics from Alma College (Michigan), and his Ph.D. in economics from Northwestern University.

Panel Discussion I:
The Future of the Global Auto Industry

Moderator: Thomas W. Sidlik
Member of the Board of Management and Executive Vice President
Global Procurement and Supply DaimlerChrysler Corporation

Thomas W. Sidlik has served as a member of the Management Board of DaimlerChrysler AG since November of 1998. Mr. Sidlik also serves as a member of the New York University Stern School of Business Board of Overseers. In his current position at DaimlerChrysler, Mr. Sidlik is responsible for Global Procurement and Supply activities for DaimlerChrysler AG. This includes production procurement and sourcing strategy, tooling, equipment and construction purchasing, as well as all other non-production procurement. Additionally his responsibilities include quality, supply, logistics, and diversity supplier development for DaimlerChrysler Corporation. Mr. Sidlik joined Chrysler Corporation as Manager - Car Product Financial Analysis in 1980. Since then, he has held various managerial positions within the corporation covering many different areas. Mr. Sidlik received a B.S. with honors in Economics and Finance from New York University and earned an MBA in Finance from the University of Chicago.