Out with the Old, In with the New
Technology’s role in attracting new talent to the automotive industry
What will a successful car manufacturer look like 20 years from now? Will market leadership be measured by the number of years a company has been in business, by the depth of its product lines, or by the size of its workforce? While it’s hard to predict what the future will look like, one thing is certain – the future of the automotive industry will be built on the shoulders of manufacturers willing to embrace the shifting dynamics brought on by emerging technologies. In doing so, these visionary companies will attract a new generation of workers and create a sustainable cycle of innovation.
Building on a History of Innovation
The automobile industry is arguably one of the oldest manufacturing industries in the world. The first gasoline powered automobile was introduced by Karl Friedrick Benz in 1885, nearly 20 years before the first airplane was invented (Library of Congress). And, it was the automotive industry that pioneered the first modern assembly line – an invention by Henry Ford that dropped the assembly time for a single vehicle from 12 hours to 90 minutes (Ford Heritage). These early inventors had no roadmap to follow, no mentor giving guidance. If a system or process didn’t exist, they had to develop it themselves.
Developing automation and new technology solutions is a tradition that continues today. Vehicle manufacturers have been some of the first to embed data-producing sensors in assembly line robotics, controllers and automotive parts. They have adopted cutting-edge software solutions to manage vast amounts of information and developed their own systems when what they needed didn’t exist. This “get-it-done” mentality has been successful with global auto sales hitting a record 80 million vehicles, according to consulting firm HIS Automotive (CNBC.com). However, is has also lead to an industry built on complex, proprietary systems, which are becoming increasingly difficult to maintain.
Holding on to a Legacy Foundation
Many of the software programs used by automobile manufactures were initially build on the computer programming language known as COBOL (Common Business-Oriented Language). In a 1997 study, Gartner Group reported that 80 percent of the world’s businesses ran on COBOL with more than 200 billion lines of code in existence (FCW.com). Over the years, these systems have be modified with new add-on features and more functionality. Additionally, adjustments have been made to accommodate business rules and government regulations. The result is often a network of unwieldy, stand-alone systems that work, but are difficult to use and maintain. Getting data out of these legacy systems can be difficult without strong technical knowledge of the old programming language and, when one change is made, it must be manually changed throughout the entire network. Unfortunately, as Java and .Net have replaced COBOL, fewer and fewer employees have the knowledge or desire to maintain these legacy systems.
Attracting the Next Generation of Workers
By 2030, 18% of the nation current workforce will be at least 65 and potentially looking to retire (Pew Research Center). As these employees leave the workforce, they take with them “tribal” knowledge – information gained not from training manuals, but from years of on-the-job experience updating and maintaining a company’s existing systems. Who will replace these experienced workers, particularly in the automobile industry, is unclear. Generally, younger employees do not want to work at companies where they must maintain old systems, seeing it as a move backwards. Instead, they are attracted to places that offer career advancement opportunities and access to the latest technology such as 3D graphical interfaces, voice activation, high speed processing capabilities, interconnected systems or mobile applications. The importance of a high-tech environment for attracting the next generation of workers in order to stimulate continuous creativity can not be stressed enough. “Newer, nimbler companies like Tesla Motors have an advantage because of their pick of engineers to help innovate,” says Morgan Stanley analyst, Adam Jonas (Associated Press).
Making the Investment
Deciding when to upgrade technology is not easy. On one hand, there is a system that, while difficult to use, gets the job done. The costs associated with maintaining legacy systems typically is spread out over time in small increments, thereby not causing a large impact on profitably. On the other hand, installing new systems requires a large upfront investment, plus a significant time commitment for customization. However, when one analyzes the return on investment over time, the actual cost of maintaining an old system typically is greater than implementing a new one, not to mention the opportunity costs associated with losing top talent to competitors.
In conclusion, the successful manufacturer of the future will be a company that embraces new technology and leverages its benefits throughout the entire organization – from design through maintenance. It will be one that attracts the next generation of workers by offering a stimulating, advanced environment. And, it will be the one that carries on the tradition of innovation by using data to deliver new, customer-driven features, functionality and services. Just as the early industry pioneers proved, its new ideas and fresh perspectives that will shape the future.