1999 Annual Meeting - Remarks by Robert J. Eaton, Chairman, DaimlerChrysler

Chairman's welcome to new members and foreign members
NAE Annual Meeting
October 1, 1999

Good afternoon. Let me again add my congratulations to our new members. We’re happy to have you with us. And I’m glad you could make this meeting.

I say that because I missed my induction. I was living in Zurich at the time. I packed my best bib and tucker for the event, and headed for Washington with a stop in London. Well, I got to London but my bags didn’t. Since my bags missed the plane in Zurich, the Swiss authorities decided to quarantine them in a bomb shelter for 24 hours. So I turned around and went back. It was a rocky start, but I have thoroughly enjoyed my experience with the Academy since that day, and I'm sure you will also.

As I hope you are able to see from our new strategic plan, which will be distributed starting this week, NAE plans to be an even bigger influence in the future than it has been in the past, and we will be counting on you to help make that happen. You are coming aboard at a time when the whole world, not just NAE, is planning a new future.

The millennium is on everybody’s mind these days. Just the T-shirt concessions must be worth a king’s ransom. Why all the fuss about 2,000? After all, it’s just another number. It’s just another trip around the sun like the millions and millions before it.

Well, about 3,000 years ago Hindu mathematicians in India taught the world to count things by tens. If you’re getting tired of all the hype, blame them.

The millennium, however, is a convenient ledge from which to rest a minute and look out ahead at what’s coming. We can’t see that future very clearly, of course. Most of what will happen in the years ahead, like most of what’s happened in the past, will surprise us. That’s particularly true of technology. But there are a few broad issues we need to deal with before we get too carried away with the specifics.

I want to talk about three of them this afternoon. One is the level of technological illiteracy that exists today. A second is the role of policymakers (in both public and private sectors). And a third is a problem that is growing within the technology community.

The several generations that will welcome the new millennium are the first in the history of humankind that do not know how their machines work. That has a lot more to do with the increasing complexity of technology than the level of our IQs, but it’s an issue that could have profound implications on how far we go from here, and how fast.

I knew how a car worked before I was old enough to drive one. I took one apart and put it back together when I was 12. It wasn’t very hard. Many other kids could do the same thing.

I’ve been an engineer in the auto industry for more than 36 years. Like all of you, I’m sure that my overall level of technological literacy would put me in the top percentile of all Americans. But you know what? I couldn’t go out in my garage today and take my car apart and put it back together like I did when I was 12. Oh, I could handle the mechanical parts, but cars today are full of black boxes, electromechanical devices and electronic control systems. To deal with technology today, it takes more technology.

When I was a kid in Kansas I knew how a radio worked because for a couple of bucks I could put together a crystal set and tune in stations all the way from Des Moines to Denver. Today my TV signals are bounced off a satellite 22,500 miles in space. If they don’t get to me, I reach for the phone, not my toolbox.

People today rely more than ever on machines they cannot fix and technologies they do not understand. They operate largely on faith. It’s an almost theological dependence on our machines to feed us, protect us, entertain us, cure our diseases, or take us across the country or around the world. But it’s a faith that "when breached" has serious consequences for those of us trying to manage the development of technology.

We get sued, for one thing. We get sued because the car or the airplane or the boat or the snowmobile didn’t live up to expectations, expectations that usually border on perfection. We also get sued because a certain segment of the bar has created a lucrative industry in technology torts and protected it with massive political contributions. They also bank on the technological illiteracy of juries. Juries that don’t understand technological limitations are easy to manipulate. Lawyers routinely convince them that every tragedy must have a villain. Someone has to pay!

Every new technology involves risk, some greater than others. The chilling effect of the liability environment we have today will make sure that some technologies never get out of the laboratory. Technological illiteracy is also the raw material for demagoguery on issues ranging from climate change to air quality to whether or not an ABM system will work. Because so few in the general public are able to comprehend the particulars, the protagonists rely on polls and PR gimmicks, instead of scientific evidence and logical arguments.

Now, if I can’t tear down and rebuild my own car, one that my own company made, it’s obviously unreasonable to expect John Q. Public to make an informed judgement about, say, the safety of our nuclear waste program. At least without some help. And that puts a heavy burden on those who create, manage, and regulate technology today.

Technology policy is made by business people looking to maximize their profits and politicians looking to maximize their influence. That may be a pretty crass way to put it, but it saves a lot of words.

I don’t mean to imply, however, that either the business leaders or the political leaders do not act responsibly. They do. Or at least they try. But they are pushed and pulled by many conflicting demands.

Last year when we merged Chrysler and Diamler-Benz, technology was a major factor in the decision to combine our efforts. Other companies are doing the same thing. Consolidation in the global auto industry is a fact of life, and will be for a number of years to come as companies realize that it’s the only way they’ll be able to afford the new technologies that the public, and governments, are demanding. This can have some serious consequences to innovation, of course.

Would it be better to have 25 or 30 auto companies around the world all chasing these new technologies independently? Would good old-fashioned competition work better than consolidation? Maybe, if each of them had unlimited financial resources. But they don’t, and they won’t. If governments mandate that cars become more and more environmentally benign (and I assure you I agree with that), then they must accept that competition will be one of the trade-offs.

But I don’t want to overstate it. I don’t think the auto industry will go as far as the aviation industry where you now have essentially two companies making airliners. I don’t think that level of consolidation is necessary. We aren’t going to get down to two independent auto companies, but there aren’t going to be 25 or 30 either.

And I think the antitrust laws in the United States and the competition laws in Europe will ensure that there are enough companies still going head-to-head that creative new technologies will be developed to serve the public.

The public policies that are changing the makeup of my industry are having an equal impact on many others. We began this century with Teddy Roosevelt busting trusts and yellow journalists exposing the horrible things going on in meat-packing plants and coal mines. We got some needed regulations that protected the public. But in all things, we tend to go too far, and we’re ending the century with a penchant to regulate almost everything.

Let me use the Internet as an example because it is notoriously unfettered now but has some regulators drooling to get at it. There are some important issues involved, issues of privacy and freedom of speech. Issues of intellectual property rights and criminal liability. Who can do business on the Internet and how? Who has jurisdiction over it? And the big one, how do you tax this thing?

That will be the big fight, how to tax it. I don’t want to sound too cynical, but it’s almost inconceivable that we can get all this free stuff forever. It is the natural order of things for government to want its take. Somebody in this town is just steaming right now that I can send mail without a stamp and get it there in a nanosecond instead of three days.

To their credit, most of the potential regulators, including the FCC, have wisely tried to keep out of the Internet’s way. But I’m afraid that the widespread use of the Internet, the abuse of it by some, and the possible tax revenues will bring more and more pressure for government to get more involved. And that could stunt the development of the most important communication tool since moveable type.

The Internet is in its infancy. It hasn’t learned much discipline or picked up a lot of manners yet. I don’t know what the Internet will grow up to be. I have high expectations. But if it’s going to reach its full potential, I know we have to watch it stumble for a while. We have to nurture it and encourage it. We have to protect it. And we have to resist the temptation to saddle it with so many rules, regulations and responsibilities that it chokes.

So far we’re dealing with a population that is technologically illiterate and policymakers who are not always motivated purely by the advancement of science and human knowledge.

The third problem lies within ourselves, within the technology community itself. We are completing a millennium that began with the longbow and ended with smart bombs. We're completing a century that began with streetcars and ended with space stations. And ironically, the very second that the clock turns over, we'll all be holding our breath that the most colossal technological blunder of all time won't shut down virtually everything we've taken a hundred years, a thousand years, to build. It's an irony that only a poet could imagine.

A body of technology so powerful, and yet so fragile that leaving two digits off a date can crash it. This would have been great science fiction 20 years ago. It’s a reality today. And an embarrassing one. It’s embarrassing because the very term "Y2K" could have symbolized a new millennium full of hope for peace and prosperity in a world that finally has the tools to feed all its people. But it has instead come to symbolize the vulnerability and the failure of modern technology. How could a problem so simple and so obvious be ignored by so many for so long? Because we are human beings, with human failings that we can engineer out of our machines but not out of ourselves.

With all the preparations and with all the billions and billions of dollars spent, I think Y2K will turn out, at worst, to be a major inconvenience. For most of us, I don't even think the lights will go out. I even have the slightly perverse notion that it's a good thing. Maybe we've become a little too full of ourselves because of the technologies we've created. Entering the new millennium humbler and wiser will be a good thing.

But we'll have some missionary work to do with the laity. I mean those who depend on technology but don't understand it. The millions who stare into a computer screen all day but have only a broad and hazy idea of how it works. The customer who pays extra for antilock brakes on faith, because he doesn't know how they work. The passenger on the airplane, the patient on the heart-lung machine, the kid doing his arithmetic on a hand-held calculator.

All of them have lost some of the confidence they had in technology. There will always be that kernel of doubt, that queasy feeling that somebody paid too little attention to some tiny issue, and we’re all going to get an unpleasant surprise as a result. And, of course, Congress will probably investigate.

By the way, I don’t want to embarrass our new inductee, Lou Gerstner, by pointing the finger at the computer industry. Maybe not as visibly as this one, but we all have our Y2K bugs, don’t we? No matter what industry or what field we’re in, some minuscule overlooked detail comes back to haunt us. We certainly have our share in the auto industry.

Automobiles have never been so sophisticated, so safe, so reliable, so comfortable, and believe it or not, so cheap, measured against inflation. And yet almost every month each of the auto companies has to send out recall notices. Never for something big. We spend hundreds of millions each year fixing 10-cent mistakes.

It is now technologically possible to have zero defects. So far, however, it hasn’t proved to be humanly possible. And it probably never will.

It’s important that our customers have realistic expectations, high, but realistic. It’s important that the policymakers here in Washington and in the state capitals also have high but realistic expectations. It’s important that we’re able to share information. It’s important that technology gets less and less mysterious to those who use it day in and day out.

Our new strategic plan puts more emphasis than ever before on communication. The mission statement says that by 2005, NAE will be recognized as the preeminent organization responsible for identifying important technological issues facing society, and advising on their resolution.

Near the top of the list of critical activities is raising the awareness of NAE. We are aiming to have the NAE president testify more often on the Hill, to have more of our positions cited in the Supreme Court, and to have the news media regularly coming to NAE for guidance.

I would like to see our political leaders rely on the Academies for science and technology the way they do the Congressional Budget Office for fiscal advice. If we are going to be effective, we have to be heard. We have to improve our response time. And we can’t wait to be summoned, we have to be proactive in seeing issues coming and sharing our advice.

In closing, it is a dangerous world in which the public and its policymakers don't understand the machines they regulate or influence. They don't have to be able to take them apart and put them back together, but they need to understand what these technologies can do and, perhaps even more importantly, what they cannot do. It will be a high priority of NAE as we head into the next millennium to help them do that.