Chairman and CEO Featured Speaker at North American International Auto Show

Cascade Engineering Chairman and CEO Fred P. Keller was a featured speaker at the North American International Auto Show in Detroit on Tuesday, January 10. Keller spoke at the show's Michigan Economic Development Corporation (MEDC) Symposium, "Innovation, 21st Century Automotive Customer." The symposium explored the diverse expectations of the 21st century consumer. Excerpts are below:

"When we talk about oil and natural gas, we think primarily of fuels for our vehicles, electricity generation, and heating our homes. As we should. That is where the vast amount of our fossil fuels are used – as fuels. But another industry is now at risk in this country due to the high cost of these fuels – the Petrochemical Industry."

"The rising cost of fuels for our cars and trucks affects the price of petrochemicals for our products and this affects the price of vehicles."

"From my perspective we cannot solve our problem of increasing prices by increasing our supply of oil and natural gas. In fact we only reduce our inventory of oil and natural gas faster, which causes the prices to go up faster in the future."

"We can reduce our costs by reducing our demand, which at the same time has many positive effects, on our environment, and our leadership in innovation, and by the way, keeps more jobs here in the United States."

"It is important to note that this price of fuels does not always relate to the costs. Rather commodities like this relate to the balance between the supply and the demand. As long as supply can keep up with demand, pricing is pretty stable and settles in around the cost of extraction, processing and shipping. But when supplies get “tight,” then the price can go through the roof as we have recently experienced. And this is not just a Katrina/Rita phenomenon. It is a structural problem."

"You don’t need to even argue about harming the environment when there is so much impact on our cost structure by increasing resin prices. We should be self-motivated to reduce demand."

"The North American share of the oil pie is shrinking from 13% 20 years ago to 5% today.
And yes, the total reserves have increased, but we have steadily increased our dependence on foreign oil to nearly two-thirds of our needs. Clearly we cannot pump our way to independence."

"We have a system of oil consumption that if the rest of the world looked like us, and they are trying really hard to do so, we cannot sustain it either environmentally or economically."

"But, and here is the point, if we can innovate the need for fuels in the world we can moderate worldwide demand and thus keep prices low and our impact on the environment low."

"Many folks argue about alternatives such as tar sands and coal gasification. Remember all of these alternatives are more costly than what we can achieve with current reserves."

"We are for sure wasting energy every time we have a vehicle stopped at a red light and the engine is running. Waste, pure waste! We don’t stand for that kind of waste in our lean enterprises anymore. Why should we stand for it in the products we sell?"

"Well we need an industry dialogue, not just lip service, but serious dialogue about how do we make our products not just responsive to the needs of the buying public, but leading the way as an industry toward a strategy that provides the fun and excitement we are seeking for our products far into the future."

Keller Recommends:

"We need to get serious about possibly coming up with our own Design for the Environment protocols! We need to do this far in advance of the Feds regulating this. We need to do it out of our own self interests to keep costs down. Taking resources from the environment, making things out of it and then sending it to the landfill just doesn’t make good economic sense anymore."

"It is okay, even desirable, to challenge the supply chain to participate in this work. We have proven that when challenged with quality system development in the 80’s and with Lean in the 90’s that we can learn and innovate extremely well when our customers value the work."

"And finally, we will have to challenge ourselves as an industry to bring innovation to market faster than ever in key critical areas such as alternative fuels, alternative powertrains, and lightweighting of bodies."

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