Economic Prosperity

1. Economic Prosperity November 15, 2018 General Motors – Innovation Exchange Center

2. Welcome Dan Piepszowski, Class XVII Senior Director, Community Leadership Detroit Regional Chamber

3. Welcome to General Motors Heidi Magyar, Class XXXVIII Director of Corporate Giving General Motors Corporation

4. The Domestic Auto Industry – Numbers, Talent, and Innovation Brandon Mason, Automotive Sector Practice Director, PwC Kristi Stepp, Global Director for Talent Development, General Motors Glenn Stevens, Class XXXIV, Executive Director, MICHauto, Vice President, Automotive and Mobility Initiatives, Detroit Regional Chamber

5. pwc.com/auto pwc.com/mobility Automotive Industry Update Draft

6. Total global vehicle production • With more than 17.4 million units of growth, emerging markets are expected to contribute 86% of global growth until 2024, as mature markets lose momentum. +17.4m EMERGING MARKETS CONTRIBUTION TO GROWTH (percentage share) VOLUME CHANGE (units) +2.8m MATURE MARKETS Source: Autofacts 2018 Q3 Forecast Release 2

7. Light vehicle assembly by region • The lion’s share of the new volume is expected to come from developing Asia-Pacific. Automakers are increasingly following a local-for-local strategy, aligning regional demand with regional assembly. Global: Regional Contribution to Global Light Vehicle Assembly Growth 2017 – 2024F (percentage share) Americas Europe, Middle East & Africa (EMEA) Asia-Pacific North America South America European Union Eastern Europe Middle East & Africa Developed Asia-Pacific Developing Asia-Pacific 7.8% 4.4% 13.2% 4.8% 6.8% (2.1%) 65.0% Regional Topline Comparison & Assembly Volume Change 2017 vs. 2024F +1.6m +0.9m +2.7m +1.0m +1.4m +13.1m (0.4m) ∆ 18.6m 4.0m 21.5m 4.4m 3.9m 49.3m 12.5m 2024F 17.0m 3.1m 18.8m 3.4m 2.5m 36.1m 12.9m 2017 Source: Autofacts 2018 Q3 Forecast Release 3

8. Alternative fuel assembly forecast by technology – Global • Alternative powertrain installation is forecasted to grow by more than 234% (+15.5m) units by 2024. Electric and hybrid powertrains are necessary to achieve targets. Fuel economy limits in major global markets have driven a significant increase in alternative fuel vehicle offerings, but not yet corresponding sales. Source: Autofacts 2018 Q3 Forecast Release 4

9. Trade Wars…or Art of the Deal? • It remains to be seen which countries will come to terms on a trade deal with the US, but the stakes are high for manufacturers whose products are at risk of significant cost increases. What would be the impact on the top 5 import markets if 25% tariffs were assessed? Canada 1.8m units $42.5b ~$23,300 per vehicle Germany 500k units $20.2b ~$41,100 per vehicle Japan 1.7m units $39.8b ~$23,000 per vehicle Mexico 2.4m units $46.9b ~$19,200 per vehicle South Korea 930k units $15.7b ~$16,900 per vehicle Source: International Trade Association, Office of Transportation and Machinery, http://www.trade.gov/td/otm/autostats.asp; Based on 2017 full-year data. PwC Autofacts Analysis 5

10. Product Mix • It is likely that a structural shift in demand is here – customers in the US (and Canada) prefer light trucks, specifically crossovers and pickups, over passenger cars. Light truck sales in the US are approaching 70% of the market. Source: Ward’s Automotive Reports, Autonews, Autofacts Analysis *YTD through October 6

11. CAFE / Emissions…headed for a showdown • NHTSA & EPA’s newly proposed “SAFE” vehicles rule aims to freeze fuel economy and emission targets from 2020 while simultaneously revoking California’s ability to enforce their own, more stringent, standards. • SAFE: “Safer Affordable Fuel-Efficient” Vehicles Rule Summary: • Freeze emission & fuel economy standards from MY 2020 • Reduction in overall vehicle ownership costs • Fewer crash fatalities • Reduction in regulatory costs for OEMs & suppliers • Reduction in “societal” costs • Slight increases in daily fuel consumption and CO2 emissions Source: NHTSA, EPA, PwC Analysis 7

12. Light vehicle sales plateau expected • Although sales in the first-half of 2018 were strong, the full year sales forecast in the US is a modest 16.9 million. High transaction prices and an increase in interest rates are expected to contribute to the decline. Source: Autofacts 2018 Q3 Forecast Release, Autonews 8

13. Changeover to crossover assembly • The industry is retooling to support consumer preferences. The high potential once seen in Mexico may be waning. Canadian assembly is expected to decline as automakers focus on the US. Source: Autofacts 2018 Q3 Forecast Release 9

14. Five myths… • About the future of the automotive industry • There will be significant adoption of electric vehicles within the next few years • The fully-autonomous vehicle world is on the near horizon • “Uberization” will radically change the industry and facilitate the transition to the fully-autonomous world • Traditional automotive OEMs and many suppliers are under enormous threat from new competitors • Downstream vertical integration and selling services will help auto OEMs protect/bolster revenues Source: Strategy& 10

15. Five predictions… • About the future of the automotive industry • The electric vs. ICE vehicle cross-over point in the U.S. will occur in ~10 years and could then rapidly alter the industry • Although the fully autonomous world is much farther away, when it arrives it will be even more revolutionary • “Mobility” will only transform when the relativecost and convenience of private vehicle ownership decline a lot • In the interim, the industry will change substantially, but not the way many think it will • We can expect an important downturn sometime in the next several years Source: Strategy& 11

16. Thank you! 12

18. The Region’s New Approach to Business Attraction and Regional Marketing Justin Robinson, Vice President, Business Attraction, Detroit Regional Chamber Gabe Rodriguez-Garriga,Manager, Corporate Strategy, DTE Energy

19. Lunch Tours of GM OnStar Operation 11:45 a.m. and 12:20 p.m.

20. “Start Ups” – Challenges and Opportunities Matt Bower, Class XXXVIII, Partner, Varnum LLP Stella Safari, Detroit Director, gBETA, Owner, Safari Beauty Nigel Griswold, Regional Economist, Cofounder and Managing Director, Dynamo Metrics

21. Peer Group Check-in on LPI Mark Ostach, Class XXXDirector of Account Team + HR Strategy, Skidmore Studio Stephanie Freeth, Class XXIII Founder and CEO, Adaptive Alternatives, LLC

22. Peer Group Check-in on LPI Mark Ostach, Class XXXDirector of Account Team + HR Strategy, Skidmore Studio Stephanie Freeth, Class XXIV Founder and CEO, Adaptive Alternatives, LLC

23. Check-In Process Choose a Peer Group According to Practice You Are Working On Table Tents for each of the 5 LPI Practices October Refresher Know the Gaps - Self vs. Observers Prioritize what to Practice Get Feedback and Clarification from Observers

24. Check-In Process Share “Stories from the Practice Field” in Groups of 3 or 4 Those who went through the debrief process should go first and share tactics and learnings Others with some experience should follow Discussion and exchange of ideas supporting one another Full Class Feedback Highlight Best Practices Raise up Common Themes, Challenges Expectations for December – 100%

26. Commitment #2 I commit to growing in self-awareness. I commit to regarding every interaction as an opportunity to learn. I commit to curiosity as a path to rapid learning.

27. Commitment #10 I commit to growing in self-awareness. I commit to regarding every interaction as an opportunity to learn. I commit to curiosity as a path to rapid learning.

28. Commitment #13 I commit to seeing all people and circumstances as allies that are perfectly suited to help me learn the most important things for my growth.

30. Personal Leadership Growth & The Culture of Organizations “Get on the Balcony” and Take a Moment To Reflect Do you feel that the personal leadership work you are called to do has the potential to challenge some aspect of your organization’s culture? Do you feel that the current cultural of your organization must be factored in as you work towards becoming a more authentic leader? Is so, how? How ready and able do you feel your Organization is to handle change and adapt to new realities?

31. Qualities of Adaptive Organizations These are part of the Culture.. Elephants in the room are named. Responsibility for the organizations future is shared. Independent judgement is expected. Leadership capacity is developed. Reflection and continuous learning is institutionalized. Action Step: Read Chapter 7 from “The Practice of Adaptive Leadership” and complete a 5 question anonymous survey sent Tomorrow.

32. Leaders Who Drive This Kind of Change Work From A Different Set of Skills They connect with their passion when leading The have the ability to “get on the balcony” and to know your own biases They can distinguish adaptive challenges from technical problems They engage their “gut” in and addition to the “head” They understand and embrace the resistance that comes with LOSS They embrace Leadership happens at all levels, regardless of position They learn from stakeholders not authority.

33. Upcoming Events Dec. 13: Leadership Detroit December Session: Educational Preparedness, Detroit Public Schools – Location TBA, 8 a.m. – 4:30 p.m. After Session Meet-Up; location TBD (by the class!) Feb. 27: Combined Leadership Detroit/Oakland/Macomb Day in Lansing