December 4, 2001

Thank you, Neil [Schilke], for that kind introduction.

And thanks, Ted [Robertson] for that rundown on upcoming events - it's no wonder SAE is considered the nation's premiere technical society. At GM, we're big supporters of SAE, and encourage all our engineers to get involved. It's great to see so many of you here this evening.

Isn't this a great facility? The technology and the exhibits on display here at the new Detroit Science Center are just terrific. If you haven't had a chance to tour the exhibits before now, I hope you'll have time after our program - they're well worth checking out.

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I'd like to speak this evening on the value of math and science education to our businesses and our society - and I'll try to keep it short, since I know I'm preaching to the choir on this subject.

I want to begin by talking for a few minutes about the importance of creativity and innovation. Someone who personified both was the inventor Thomas Edison - who, of course, was no stranger to Detroit and the early days of the U.S. auto industry. You can find evidence of his handiwork all around the museum tonight.

Legend has it that 124 years ago today - on December 4, 1877 - Edison and his assistants pulled an all-nighter as they worked to perfect Edison's new invention, the phonograph, for a public demonstration a few days later.

Back then, of course, they had to do their work by firelight - and some say the experience of doing so spurred Edison to invent the incandescent light bulb, which he did two years later.

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The changes brought about by Edison's work were, of course, extraordinary - from phonographs and light bulbs, to electrical distribution systems and the modern research laboratory. They literally changed the way people lived and worked.

Another invention that changed the course of human history was the automobile - and like many of Edison's inventions, it still does so today.

Now, of course, the auto industry, itself, is changing, and the extraordinary changes we've seen in recent years - from global industry consolidation to fuel cell research - really show how fast the world is changing, as well.

Consider that when the Dow Jones Industrial Average was created in 1896, it consisted of 12 stocks. A little quiz: how many of the 12 stocks in the original Dow remain in the Average today?

Answer: one. General Electric. And even GE spent a few years riding the bench. The other 11 companies are missing-in-action.

Dig a little deeper, and you'll find that over the past 105 years, the Dow has included no fewer than seven automotive companies. How many of those companies are represented in the Dow today?

Answer: one. (And you know I wouldn't be asking if that company wasn't GM!)

But, in truth, GM's history hasn't been nearly as stable as its presence in the Dow would imply. Consider the case of Billy Durant.

In 1908, Durant founded General Motors - one of a number of what were revolutionary auto companies that, in some ways, were the dot.coms of their day. Investment capital poured into these fledgling companies, and from 1914 to 1920, GM stock soared more than 5,500 percent.

In the early 1920's, however, when the overcrowded automobile industry failed to deliver on expectations, auto stocks plunged. In six months, GM lost two-thirds of its market value. In response, Durant began to borrow money at a fantastic rate and, in a panic, bought back shares in a futile attempt to prop up the company's stock price.

Long story short - after a wild ride, GM, eventually recovered. But, I'm afraid that after his own equally wild ride, Durant did not. He eventually lost his fortune and wound up running a bowling alley in Flint - a prospect, by the way, that has haunted GM CEO's ever since!

So what happened to the 11 missing companies from the original Dow? Or the six automotive companies no longer there today? They were bought or sold, merged or acquired, dissolved or absorbed. Most are out of business, and all are out of the Dow - because the world changed faster than they did.

History shows us - and the dot.com debacle is just the latest example - that one of the few constants in our world is change - and unless you keep up with it, you'll be history yourself. At GM, we think the answer to keeping up with this change - or better, staying ahead of it - lies in innovation.

GM built its reputation - and its position atop the global auto industry - because, first and foremost, of its commitment to innovation.

Students of the industry know that GM has a long history of innovation punctuated by countless instances of "first to market" technology. We're proud of that history - but, of course, we can't operate in the past. As Thomas Jefferson put it, "The past is a good place to visit, but I wouldn't want to live there."

My point is simply this - although it's not always recognized these days, it's innovation that got GM to where it is today - and it's innovation that will enable us to maintain that leadership position in the years to come.

In fairness, I should point out that not all of GM's past innovations have come out exactly the way we intended. From the ill-fated copper-cooled engine of the 1920's, to the Corvair of the 1960's... from the Rotary Engine of the 1970's, to our assembly-line robots that painted themselves in the 1980's - we've had a few miscues. But that's part of the innovation process.

We don't stop every time we swing and miss - we regroup, learn from our mistakes, and try again. We experiment, we adapt, we stretch - and meanwhile, the innovation must go on. And it does go on - at GM... at the other OEMs... at our suppliers.

The fact that most of us work for companies with long histories is proof of that. The fact that some of you work for companies with very short histories is also proof of that - as you work to bring new technologies and approaches to market.

In today's auto business, all of us compete in an industry marked by competitive markets, excess capacity, and a growing number of strong, global competitors. The price pressure is tough - and it's only growing tougher.

In this situation, how can any one of our companies distinguish itself in its customers' eyes? And I'm talking about suppliers as well as OEMs here - since we OEMs look to our suppliers to help develop the kind of "game-changing" technology that creates an advantage in the marketplace.

At GM, we believe there's one clear answer - innovation.

Now, innovation at General Motors - and I imagine this is the case at your company or, for the teachers in the audience, your school - occasionally strikes like a lighting bolt. More often, though, it comes as the result of Edison's famous formula of "one-percent inspiration, and 99-percent perspiration."

And what is the perspiration? What is it that serves as the basis for the innovation that literally keeps our organizations competitive?

At its core, innovation in the automotive business stems from a passion for math and science and engineering. And this illustrates a larger point - which is that innovation is much more than patents and designs and software. It's also our products, our services, and our processes. Most of all, it's people - the people who make all of these things possible. And, frankly, that raises a concern.

GM is a 93-year-old company. We're proud of our history, and we want our company to be around for another 93 years, at least. I'm sure that's a sentiment each of you shares about your own companies. To do that, we all need to be innovative.

To be innovative, we all need to be able to employ people who possess the basic knowledge and training and skills to get the job done.

The problem arises when we consider that the U.S. faces a shortage of exactly the kind of people we need to get that job done - namely, college-educated scientists and engineers.

Needless to say, this is a concern not only for OEMs and suppliers, and not only for the automotive business - it's really a concern for our entire nation. As Ted Robertson said, "better technology wins" - and that applies to everything from automobiles and computers, to education and military science. These are important advantages - ones we need to sustain and protect - and yet ones we now run the risk of losing.

Here's the issue: studies indicate that fourth-grade students in the United States perform better in math and science than students from any other country. However, by the time those children reach the eighth grade, students from the U.S. perform lower in math and science than their counterparts in many other countries.

And this drop in performance is accompanied by a drop in interest in math and science - and a reduction in the number of students who choose to pursue science and engineering degrees at the college level. It also leads to a decline in scientific literacy among the general public, which slows our nation's technological advancement.

When the National Science Foundation asked youngsters entering the 3rd grade, "What is your favorite subject?"... the response was "math," with "science" a close second. When asked the same question at the end of the 7th grade, the only class students disliked more than math, was science.

It's in grades 4-7 where we're losing the future.

Of course, this loss of interest in math and science leads to a drop in the number of engineering and science graduates. In the U.S., the number of bachelor's degrees granted in engineering has dropped from more than 95,000 degrees in 1985... to less than 65,000 degrees in 2000 - at a time when the number of retiring science and engineering workers is dramatically increasing. The result is a significant and growing gap between the supply of, and the demand for, qualified engineering graduates.

Now, how do we address these challenges?

Many of you already know what SAE is doing. In fact, many of you are a part of it - and for that, I want to thank you for your important work.

Eleven years ago, SAE created a program called "A World in Motion" to stimulate interest in math and science among students in the 4th, 5th, and 6th grades. Through hands-on, classroom projects, "A World in Motion" volunteers have worked to nurture and sustain the interest in math and science that our younger children already possess.

The goals are simple:

* to improve math and science literacy * to promote a passion for solving problems * to inform youngsters about the exciting career options for engineering students * and, ultimately, to help ensure a qualified and diversified pool of science and engineering candidates for North American industries.

Since 1990, SAE volunteers have introduced "A World in Motion" to more than 1.5 million students in more than 15,000 schools in the U.S. and Canada. I personally find those statistics, alone, to be amazing. They really show what we can do, when we focus on a problem and all get together to do something about it.

The reason "A World in Motion" works is that it makes math and science fun and relevant. The critical difference between it and other hands-on science-education programs is the scientist or engineer who serves as a volunteer and mentor, both for the students and the teachers. And the results of all your work have been encouraging.

An independent study by Goodman Research Group during the 1997-98 school year, reported that "A World in Motion" positively influenced student attitudes toward science.

Teachers reported that their students responded well to "A World in Motion" and enjoyed science classes more as a result, and that this enthusiasm increased student interest in science class, in general. Testing showed that student knowledge of basic engineering principles improved following the program. And perhaps most encouraging, more students indicated an interest in becoming engineers following their exposure to "A World in Motion."

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When Albert Einstein was teaching at Princeton, he once gave a final exam to a class of grad students. After reading over the exam, one of the students raised his hand and - looking rather confused - said, "Professor Einstein, these are the same questions you gave us last year." Einstein smiled and said, "Yes, but the answers are different."

The world keeps changing. The challenges we face keep evolving. But the basic tools we use to address those challenges remain the same - math and science, technology and innovation.

Tonight, I want to call on each of you in the audience - both here at the Detroit Science Center, and the hundreds more who are watching on the SAE webcast - to think about the issues we face, as an industry and as individual companies, in meeting the challenges that lie before us.

Is anything more important to our future success than the quality and the training of our own employees? They are the ones who will provide us with the power to innovate - and therefore, with the power to succeed.

All good coaches tell us that one of the secrets of their success lies not only in the players they can suit up today, but in the ones they can recruit for tomorrow.

We have great teams in this industry - but we need to work together today to make sure we have an ample pool of talented players to choose from tomorrow.

Each of you knows how valuable - and, frankly, how much fun - math, science, and engineering can be. You know the benefits of engineering - for yourselves, personally, as well as for your companies and our society. Please consider passing along some of your enthusiasm to the next generation.

If you're not already involved in "A World in Motion," I urge you to get involved. And if you're already involved, thank you for your contributions - and please help us get others involved in this important work.

In the words of GM's legendary Charles "Boss" Kettering, "One Thomas Edison in a generation is no longer enough to sustain our kind of progress... Today we literally need thousands of well-trained young people with the kind of wisdom, imagination, and courage that took Edison on his lifelong conquest of the unknown."

The best way to shape the future is to invent it ourselves. With the support of SAE and "A World in Motion," we can help make that happen.

Thank you.