Solutions for Mobility in the 21 st Century: Ecological concerns vs. desire for mobility DaimlerChrysler Martin Kobetz Siemens AG Arne Freundt Moritz Stellmes MIT Shihab Elborai Margarita Marinova Jennifer Topinka Angela Won January 13-14, 2003

Outline Challenge and Background Goals Strategies Conclusion Discussion

Challenge and Background “Environmental aspects vs. the desire for improved mobility” Market inefficiency: lack of information causes a sub-optimal environmental solution Relationship between the company, government, customer Globalization and urbanization causes environmental and social costs Natural resources are limited High degree of mobility are necessary for high-developed industries ⇒ New strategies are necessary for global players

Goals Increase customer involvement Optimize production/environmental costs Meet and influence societal mobility expectations Promote societal awareness of environmental problems Clarify the link between health and environment ShareholderGovernment EmployeesCustomers ⇒ Companies have to balance their “Square”

Strategies Increase customer involvement: Gathering information through surveys, statistics, customer behavior Knowledge Management Create volunteer programs and grass-roots-initiatives Create feedback loops Optimize production/environmental costs Create task force in order to cooperate with all involved parties to identify inefficiencies Assign costs in a standard and systematic way Create means of pressure and rewards New technology and efficient use of existing technology

Strategies 3)Meet and influence societal mobility expectations Efficiently finding out/ Monitor expectations Set trends to create acceptance for new technologies to reduce pollution Introduce new moblility concepts e.g. public transportation, car pooling, car on tracks More incentives for employees to change to an environmental behavior 4)Promote societal awareness of environmental problems Educate and inform children, customers and government through cross- media strategy Involve stakeholders in decision process Create pressure and urgency for the environmental topic Standardize and systemize discourse on the environment

Strategies 5) Clarify the link between health and environment Gather facts through health monitoring and case studies Educate about the implication of their action/ choices/ consequences Create transparency Standardize regulation and initiate international cooperations

Engineering an environmental customer Educate 1) marketing 2) Participate directly change the product so that information is available 3) Drivers education 4) Rigorous emission testing Cost incentive 1) Push for government incentive 2) filter Product Customer Changes Cooperative decision making Visual performance indicators Cost of „bad“ cars sponsors „good“ cars Quick turnover of cars Cost incentives Education Mobility concepts Redefine popular trend Engineer an environmentally conscious consumer, an environmental product, and accelerate positive change.

PROS Drive innovation through environmental protection Improve company image Win situation for everyone through involvement Sustainable accelerated rate of change Solution: Engineer the product and the consumer Risk of not staying competitive Lack of consistency between countries Uncertainty of customer reaction New technology and investments needed Rate of product and customer change may differ CONS

Faces of the Future Current Situation Slow change Reaction instead of action Dependent on government to take first initiative  may endanger environment Future Vision Leader in industry and drive innovation Cooperation and contracts with government Individual responsibility for environmental protection Closer relationship with consumer

Conclusion Customer Involvement Optimization production/environmental costs Meet and influence societal mobility expectations Societal awareness of environmental problems Clarify the link between health and environment ShareholderGovernment Employees Customers Industry as a role model Engineer both customer and product Environment has to be seen in the context of the involved parties. The role of the players changes depending on economic and cultural context

Discussion Who has the main responsibility for the environment? „Environmental protection is catalyst for innovation“ (Jürgen Weber, CEO Lufthansa) ⇒ Who should pay for the cost of environmental protection and the cost of pollution? ⇒ Can protection of environment be a rational goal for companies?

Strategies 5)Create a win-win-win-win situation Company to Government: Planing public Involvement in law making Cooperate freely (goodwill) Company to employee Concern for health and life Fitness Costs reflected (e.g. Balance sheet -> company reacts to it) Educate about mission/ identity (Relate to mission in everyday work) Company to customer Trust Loyalty Quality assurance Shareholder profit Profit Growth Background slide for „GOALS“

Engineering an environmental customer Educate 1) marketing 2) Participate directly change the product so that information is available 3) Drivers education 4) Rigorous emission testing Cost incentive 1) Push for government incentive 2) filter Product Customer Changes Cooperative decision making Visual performance indicators Cost of „bad“ cars sponsors „good“ cars Quick turnover of cars Cost incentives Health Tax Insurance decrease operation costs (e.g. filters, fuel) Education Environmental classes Mobility concepts Sharing cars (eg. Zip car) Change rental attitude Redefine popular trend More efficient vehicles Marketing & education Engineer an environmentally conscious consumer, an environmental product, and accelerate positive change.