Blog: Dave LeggettInterviews

Dave Leggett | 2 February 2007

We've recently published a couple of interviews of note. GM's Asia-Pacific head, Nick Reilly, offered some useful insights on emerging markets when he was interviewed by Rob Golding (click here). He's been around the block has Reilly (Shanghai, Seoul and lovely Luton).

And Thérèse Martinet at PSA also had some interesting things to say about her company's attitudes to Corporate Social Responsibility (CSR) when she was interviewed by Sue Brown (click here).

How far do you think about the CSR issues involved in the manufacture of things you buy - whether it be a car, a bag of coffee beans or a pair of jeans? At some level, CSR stuff gets pushed into the background I reckon - whether for simple economic reasons, or the prevalence of 'bargain mentality'.

How much will we pay for a high CSR index and how many consumers attach importance to it? It does seem to be of rising importance though, especially when its constituent elements move in the same direction as other corporatively - is that a word? - positive things (like lower production costs, or lower average vehicle emissions).

At the vehicle manufacturer level, a higher rate of production/plant capacity utilisation must make CO2 emissions per vehicle at the point of manufacture lower - as well as lowering unit costs of production. On that basis, firms shedding capacity - like Ford and GM in the US - ought to be getting relatively better on both lowering costs and CO2 in manufacture.

But what about further down the supply chain? It's a can of worms (and a controversial one at that) when you consider the total energy consumption all along the manufacturing process and take it as far back as raw materials... 

And think about all the transportation costs incurred in the manufacture of a vehicle. Here's a thought. If transporting goods gets relatively more expensive over time - through a rising price of energy, the imposition of CO2 taxes - then in  terms of overall vehicle production/distribution costs (all along the supply chain to the point of final consumption) what will the implications be for manufacturing logistics? Would manufacturing gravitate closer to the place of final consumption? How would lean manufacturing change? Would keeping larger inventory come back into fashion? 

Could automotive manufacturing get even more concentrated in huge plants with heavy supplier integration that minimise transportation costs overall, but with smaller flexible assembly plants closer to the final consumer? 


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