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Autos, Energy, and the Environment: Challenges for the 21st Century                    November 19, 2004

Resources for the Future logo

Logo for Stern School of Business and Link to Stern Website



RFF Policy Conference held in conjunction
with New York University's Leonard N. Stern School of Business

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.


Video of Conference
(To view the videos, you need RealPlayer. Get a free RealPlayer at www.real.com.)

       

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.


 

 



Image of Thomas F. Cooley and link to his welcoming remarks
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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.

   



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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

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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.

Panelist: David E. Cole
Chairman, Center for Automotive Research

David E. Cole is the Chairman of the Center for Automotive Research (CAR) in Ann Arbor, Michigan. He was formerly Director of the Office for the Study of Automotive Transportation (OSAT) at the University of Michigan Transportation Research Institute.



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He has worked extensively on internal combustion engines, vehicle design, and overall automotive industry trends. Dr. Cole's recent research has focused on strategic issues related to the restructuring of the North American industry and trends in globalization, technology, market factors, and human resource requirements. He also has been actively involved in the start-up of five different Ann Arbor-based companies. His technical and policy consulting experience includes a variety of assignments for industry, labor, and government. Dr. Cole received his B.S.M.E., M.S.M.E. and Ph.D. from the University of Michigan.

Panelist: Maryann N. Keller
President, Maryann Keller & Associates

Maryann Keller is president of Maryann Keller & Associates, an auto-industry consulting firm headquartered in Greenwich, CT. From 1999-2000, Ms. Keller was president of priceline.com's Automotive Services unit.


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Prior to that appointment, she spent fourteen years as Automotive Industry Analyst at Furman Selz (now ING Barings) in New York City. She is a veteran auto industry analyst and author of the books "Rude Awakening: The Rise, Fall and Struggle to Recover at General Motors" and "Collision: GM, Toyota and Volkswagen and the Race to Own the 21st Century." Ms. Keller holds a B.S. in chemistry from Rutgers University and an MBA from the City University of New York.

Question and Answer Session
 

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Panel Discussion II: Fuels and Technologies

Introduction: Paul Portney
President and Senior Fellow
Resources for the Future

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Energy Company's Perspective:
Donald L. Paul
Vice President and Chief Technology Officer, ChevronTexaco Corporation

Donald L. (Don) Paul is the corporate officer responsible for ChevronTexaco's Energy Technology, Information Technology and Technology Ventures companies.



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In this role, he manages the acquisition, development and integrated application of technology throughout the company's worldwide business activities. As part of his responsibilities, Paul is a member of corporate committees for Strategy and Planning, Global Issues, and Human Resources. Paul is extensively involved in external research and technology management roles with partners, universities, government, and professional technical societies. He is a member of the Society of Exploration Geophysicists, the American Association of Petroleum Geologists and the Society of Petroleum Engineers. He is a member of the external advisory board for the Department of Earth, Atmosphere, and Planetary Sciences of the Massachusetts Institute of Technology and the School of Engineering at the University of Southern California.

He has served as past chairman of the Advisory Board for the School of Earth Sciences at Stanford. Paul is a member of the National Research Council of the U.S. National Academy of Science and served on the 1997 Presidential Panel on Federal Energy R&D. On June 6, 2002, Paul testified before the U.S. House of Representatives (Energy and Commerce Committee) on the future of advanced energy technologies, including fuel cell technology and is an advisory board member of the FreedomCAR and Fuel Program of the Department of Energy. He is a graduate of the Massachusetts Institute of Technology, with a bachelor's degree in applied mathematics, a master's degree in geology and geophysics and a Ph.D. in geophysics.

Engine and Other Technologies:
Deborah L. Morrissett
Vice President, Regulatory Affairs/Product Development DaimlerChrysler Corporation

Deborah L. Morrissett became DaimlerChrysler Corporation's vice president of Regulatory Affairs/Product Development on January 1, 2004.


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In this position, she is responsible for all regulatory affairs operations at Chrysler Group, including product analysis, vehicle safety, stationary, environment and energy, and environment energy regulatory planning. Since joining the Chrysler Group in 1975, Morrissett has held a series of increasingly responsible positions in Product Development, Regulatory Affairs and Procurement and Supply. Before her current appointment, Ms. Morrissett served as director of Electrical/Electronics in the Procurement & Supply organization. Ms. Morrissett holds a bachelor's degree in electrical engineering from Lawrence Technological University and a master's degree in electrical engineering from the University of Michigan-Dearborn.

Engine and Other Technologies:
Dennis Cuneo
Senior Vice President
Toyota Motor North America and
Toyota Motor Manufacturing North America

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Dennis C. Cuneo is senior vice president of Toyota Motor North America, which is the holding company in New York City for the various Toyota affiliates in North America. He also serves as senior vice president of Toyota Motor Manufacturing North America, which is Toyota's North American manufacturing headquarters. In his 20 years with Toyota, Cuneo's responsibilities have included strategic planning, environmental, regulatory affairs, legal, government and industry relations, labor relations, investor relations and public affairs. Prior to signing on with Toyota in 1984, Cuneo was a trial attorney in the Antitrust Division of the U. S. Department of Justice, and then with the Washington, D.C., law firm of Arent, Fox, Kintner, Plotkin & Kahn.

Question and Answer Session
 

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Panel Discussion III: The Intersection of the Automobile, the Environment, and Public Policy

Introduction: Robert E. Grady
Chairman of RFF's Board of Directors, and Partner and Managing Director of The Carlyle Group

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Climate Change: Raymond J. Kopp
Senior Fellow, Resources for the Future

Raymond J. (Ray) Kopp is senior fellow in RFF's Quality of the Environment division. His interest in environmental policy began in the late 1970s, when he developed techniques to measure the effect of pollution control regulations on the economic efficiency of steam electric power generation.



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He then led the first examination of the cost of major U.S. environmental regulations in a full, general equilibrium, dynamic context, using an approach that is now widely accepted as the most state-of-the-art in cost-benefit analysis. Dr. Kopp is an expert in techniques of assigning value to environmental and natural resources that do not have market prices, which he uses in cost-benefit analysis and to assess damage to natural resources. He is the co-author of Valuing Natural Assets: The Economics of Natural Resource Damage Assessment. Dr. Kopp is a member of the U.S. Department of State's Advisory Committee on International Economic Policy. He received his Ph.D. in economics from the State University of New York at Binghamton.

California's Proposal to Limit Greenhouse Gas Emissions from Motor Vehicles: Charles Shulock
Program Manager, Motor Vehicle Greenhouse Gas Reduction
California Air Resources Board

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Charles M. Shulock is program manager for motor vehicle greenhouse gas reduction at the California Air Resources Board. He currently is the project leader for implementation of AB 1493, the California legislation that directed the Board to adopt regulations to reduce greenhouse gas emissions from motor vehicles. He also was leader of the ARB staff teams that prepared the 2001 and 2003 amendments to the California Zero Emission Vehicle regulation. Prior to joining California Air Resources Board, Mr. Shulock was chief deputy director of the Office of Environmental Health Hazard Assessment, and was assistant secretary for policy development at the California Environmental Protection Agency. He began his career as a program analyst at the Office of the Legislative Analyst, California Legislature. Mr. Shulock holds a masters degree in Public Policy from the University of California, Berkeley, and a bachelor of arts degree from Georgetown University.

Sustainable Mobility: George Eads
Vice President
Charles River Associates

George C. Eads has held regular faculty positions at Harvard, Princeton, The George Washington University, and The University of Maryland College Park. He also has held several positions in the Federal government, including Executive Director of the National Commission on Supplies and Shortages and Member of the President's Council of Economic Advisers.

 

 

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Between 1986 and 1994 Dr. Eads served as Chief Economist and was a Vice President of General Motors. Since 1995 he has been a Vice President of Charles River Associates, based in CRA's Washington, DC, office. In 1994 and 1995 he was a member of President Clinton's Policy Dialog on Reducing GHG Emissions from Personal Motor Vehicles (known colloquially as "Car Talk.") He co-authored the World Energy Council's 1998 Report, Global Transport and Energy Development -- The Scope for Change. During the last four years, Dr. Eads has devoted most of his time to the World Business Council for Sustainable Development's Sustainable Mobility Project. He was Lead Consultant during the Project's second and final phase. The Sustainable Mobility Project was sponsored by twelve WBCSD members -- BP, DaimlerChrysler, Ford, General Motors, Honda, Michelin, Nissan, Norsk Hydro, Renault, Shell, Toyota, and Volkswagen. Its final report, Mobility 2030, was released this past summer in Brussels, Detroit, and Tokyo. Dr. Eads received his Ph.D. in Economics from Yale University in 1968.

Federal Regulatory Perspective: Christopher Grundler, Deputy Director, Office of Transportation and Air Quality
U.S. Environmental Protection Agency

Christopher Grundler is deputy director of EPA's Office of Transportation and Air Quality (OTAQ) and chief executive of the National Vehicle and Fuel Emissions Laboratory in Ann Arbor, Michigan. OTAQ works to reconcile transportation and the environment by advancing clean fuels and technology, and promoting sustainable transportation policies.

 

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The organization establishes national emission standards for all vehicles and engines sold in the United States, carries out real-world and laboratory testing programs to ensure compliance with standards, and works with state and local governments on strategies to reduce transportation emissions. At OTAQ, Mr. Grundler oversees an active advanced technology program developing and evaluating ultra-clean and efficient technology, and forms partnerships with the private sector to commercialize promising ideas. Mr. Grundler has been with the Environmental Protection Agency since 1980 and has held a number of management positions in the Agency, including Director of the Great Lakes National Program Office and Director of the Office of Federal Facilities Enforcement. He received a B.S. degree in Civil and Environmental Engineering from the University of Michigan.

Question and Answer Session
 

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Closing Remarks

Thomas F. Cooley
Dean, NYU Stern School of Business

Image of Paul V. Tebo and link to his presentation
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