Hyundai CEO John Krafcik: Who're you calling a greedy dimwit?

If you’re an automotive executive fretting over the collapse of the U.S. market, the tidal wave of negative headlines and the steady assault of restrictive new government regulations, stop lamenting. You’ve only got yourself to blame, declared John Krafcik, acting CEO of Hyundai Motor America, during his keynote speech at the 2009 Chicago Auto Show.

“There is no other industrial sector with a bigger perception problem,” Krafcik contended.

It’s not unusual for industry executives to use the spotlight of an auto show to identify the industry’s problems and then call for tepid solutions. But Krafcik’s blunt speech was unusually tough on industry leaders, who must take significant steps to reverse both the automotive downturn – and the decline in the industry’s reputation – he argued.

Asserting that “the decade of greed didn’t end in the ‘80s,” the former Ford product executive said American consumers have come to view automotive executives as “dimwits,” who are “unresponsive to consumer needs,” despite the “lavish perks and unnecessary entitlements” they take home.

The only way to reverse such perceptions – and to revitalize the industry – Krafcik suggested, industry leaders must take significant, and sometimes painful steps. Among them, a pay cap that sets the cash top executives make at a “reasonable multiple” of what the typical automotive worker takes home.

“There’s a large dose of truth,” in the frequent criticism of the industry, said the Hyundai executive, adding that it wouldn’t hurt to be more candid; he cited President Obama, who went on network television to admit he “screwed up” with the abortive appointment of Tom Daschle to his cabinet.

Some of Krafcik’s suggestions weren’t new. He said great new product is essential to getting consumers back into showrooms. But the Hyundai CEO said that several things need to be moved much higher on the industry’s agenda.

For one thing, it’s time to stop resisting calls for improved safety, higher quality and better mileage. Hyundai, he noted, has promised to average 35 mpg, across its fleet, by 2015, five years ahead of new government rules. Meanwhile, Krafcik commended Volvo’s consistent focus on safety, and its goal of eliminating in-vehicle fatalities by 2020. The industry, as a whole, said Krafcik, should adopt that mandate.

“We could engender good will by making this, together, an industry-wide goal,” the executive said.

How to take these controversial steps will be a challenge, he conceded, though Krafcik argued that there are various industry organizations that could lead such efforts. Would his counterparts at Toyota, General Motors, Ford or Mercedes-Benz be willing to take big pay cuts? Krafcik acknowledged it will be a tough – if necessary – sell. But he hinted that he’s already complying with his proposed guidelines.

“Frugal,” he concluded, “is one of the three words in Hyundai’s mission statement.”