30th Annual Automotive Insights Symposium

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[RICK MATTOON: Good morning, everyone. My name is Rick Mattoon. I'm the vice president for regional analysis and engagement and the Detroit regional executive for the Federal Reserve Bank of Chicago. It's my pleasure to welcome you to our second day of the 30th Annual Automotive Insights Symposium.

[I think yesterday, we got off to a really fantastic start. I thought all the panels were incredibly engaging. I really want to congratulate both our presenters and, also, our moderators for really touching on some really key issues that I think are very important to almost everybody in this room.

[Again, today, we will be using our Pigeonhole app for taking questions for both our virtual and our in-person audience. And I want to thank you very much for your engagement yesterday. We received, literally, a ton of messages and questions through Pigeonhole. And so we were really excited to see that level of engagement for all of you.

My task this morning is, really, I just wanted to highlight some of the themes I took away from yesterday's program. And hopefully, that will help set up some of what we're going to be doing today. First of all, I was particularly pleased during the day that my analogy at the beginning of the day, where I said you should think of this year as like being a duck on the water, seemed to hold up in terms of everybody's presentation.

So not to push this analogy too far, what I'd say at this point is the themes I took away from yesterday was our duck knows the direction it's headed, which is clearly towards a more electrified future, but it is paddling wildly, and it's not exactly moving in a straight line to get there. So there's lots of uncertainty that's going on, a lot of adaptation that's going on. And so I think that this notion of a serene surface environment versus a fairly turbulent under-the-water environment certainly holds up today.

One of the other things I took away yesterday was a fairly sanguine forecast for 2024 for the industry. What I took away was, first, pretty tight consensus in terms of what production and sales were going to look like, a sense that, at this point, the basic underlying fundamentals of the industry are pretty strong.

You're looking at pretty certain consumer demand. You're looking at reasonably favorable macroeconomic conditions and continued repair in things like supply chains and other things that have been disruptive to the industry. We're still not back to 2019 levels, but it seems the gradual improvement that we've been hoping for seems to be somewhat baked into the forecast for 2024.

The next theme I took away is China, China, China. Many of the speakers actually touched on this in a fair amount of depth. It's clear that China seems to be becoming a leader in the electric vehicle space, both in terms of the technology and, in many cases, the user experience.

But it's also interesting to see that one of the real questions out there is when Chinese vehicles are going to enter particular markets, what the barriers are to that, and whether, in fact, they actually need to enter a lot of these markets, given the appetite there is for electric vehicles within their home nation.

Another theme really comes to policy. As Kristin pointed out in her presentation, there was a lot of landmark US legislation passed at the federal level to support the transition to a lower carbon future.

However, a lot of this legislation is coming up against barriers, and one of the things we're going to talk about today, of things like availability of minerals and the availability of US domestic producers to actually be able to meet some of the goals that are entailed and, actually, built into this sort of legislation. So I think that's something that's going to be well worth looking at and seems like it's a potential problem that we're going to have to deal with.

The final theme I really want to point out is, really, what I heard yesterday was a lot of extremely robust kind of scenario planning. And Kristin and I were talking this morning about this. This is like if you're in the supply chain or if you have anything where you're managing this kind of volatility, you probably have the hardest job in America at this point.

Everything is about not just having a plan A, B, or C but, in many cases, having D, E, and F in your back pocket. Because you're just managing against a ton of uncertainty and a ton of volatility at this point. And that's really going to be pretty challenging.

I was left thinking of the great philosopher, Mike Tyson, who had the comment that everybody has a plan until they get punched in the face. And I thought that yesterday, there was some of that where I was thinking, I really feel for these people. Because I think, in many cases, that's what they're hoping isn't going to happen is they're going to get punched in the face.

I think that this really sets up a lot of what we're looking at today, which is this tension between where we're headed in terms of technology and the desire to get to a new future for automotive mobility but, also, all these barriers and all these sorts of frictions that stand in the way to us getting there. So I think this is going to be a really, really interesting conversation.

Today, we're going to focus on some other issues that are very interesting, things having to do with trade and reshoring the supply chain into the US. We're looking at things like availability of critical minerals. And we're going to have a very interesting final panel looking at what the aftermath is in terms of the labor negotiations, in terms of the unions and management working together towards a new future.

So again, I want to thank you all for being here. I want to thank you for your participation and your engagement in this very important topic. We, of course, will follow up these presentations. This whole conference will be posted on our website in the future. And again, we look forward to continuing to operate with you.

So it's now my pleasure to bring up Thomas Klier, one of my colleagues for a long time and one of our experts on autos, to introduce his panel. And please join me in welcoming Thomas and his panel.

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There it is.