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Lovins 25 (1:45)
Topic(s): Auto Industry / Future Transport / Government
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Video Transcript

The auto industry is the most complex undertaking in the industrial history of the world. It's incredibly complicated and you would expect that changing its culture is like turning a super tanker—it just takes a long time. It takes a real grasp of the difference between leadership and management and it takes a fundamental cultural change for which they may or may not have time. I'm hoping the American automakers survive this gale of creative destruction, as the Austrian economics Schumpeter calls it, that is sweeping through their industry. It's the kind of gale that knocks down old industries and new ones rise from the rubble. But this market is going to change the managers' minds or change the managers, whichever comes first. And I think they're starting to be much more open to new possibilities.

I was recently in Detroit and talked to heads of advanced engineering for each of the big three and I asked, I thought the most conservative of them, what he would do if he became convinced that there was a fundamentally new way to make cars which would be strategically advantageous but would require them to abandon their steel stamping capability. And to my delight, he said, "We would adopt it immediately and fearlessly," which is the right answer. When you have such a disruptive technology, you have to do it first, before your competitors have figured it out and you have to sell them your steel stamping equipment to slow them down. But I'm pretty sure he would not have given me that answer six or twelve months earlier. I think gazing into the abyss has concentrated the mind wonderfully.