CES Countdown #13: Can automotive electronics maintain forward momentum?

Beginning today and proceeding into the new year, as we come closer to our annual Consumer Electronics Show coverage, BetaNews will be bringing you in-depth analyses of the major issues facing the conference this year. We've compiled a list of the 13 most important issues that will be the buzz of CES, and today, West Coast Bureau Chief Angela Gunn brings you the first of our series of examinations of what will be on the minds of exhibitors and attendees, at what could become the most unusual, controversial, and momentous CES conferences in modern memory.

As we approach a Consumer Electronics Show taking place in a business climate unlike anything the tech industry's ever known, consider if you will the automotive-electronics wares -- this year practically an index of these strange days in our history.

Automotive electronics are a major part of most CES shows, but you wouldn't necessarily know that from mainstream tech-publication coverage. (You also wouldn't necessarily know that AVN, a major adult-entertainment show, "happens" to overlap with CES, but that's another article.) Still, the car and auto-aftermarket exhibits are a big draw for a lot of geeks who double as gearheads -- so shiny, so loud, so fun, just the way CES is alleged to be if you're not trudging around actually working the show.

The most significant automotive event at next month's show is expected to be Thursday's appearance by Ford Motor Company President and CEO Alan Mulally. CES is about the new, and last year General Motors seriously got in on that aspect of the show with the unveiling by GM CEO Rick Wagoner of the Cadillac Provoq hydrogen-cell concept car -- the first such reveal in the history of the show. Is it any surprise that by last August of this year, Mulally was "gettable" for the big talk come January?

Ford Motor Co.

Scott M. Fulton, III

At last year's CES, no single company exemplified the trend toward rethinking the role of electronics in consumers' lives, than Ford. By unveiling Microsoft's Sync technology, which enables drivers to control their on-board computers and media systems while keeping both hands on the wheel, Ford attracted more attention than some of the major CE manufacturers in 2008. And in choosing to roll out Sync not with its upper-end Lincolns but instead with its entry-level Focus, Ford showed it understood just as well as the CE manufacturers that the sweet spot for revenues was the conscientious buyer.

View the full F chart at Wikinvest

But Ford didn't bank on its low-end vehicles to keep its market share aloft in the US. Instead, it bet what many believe could have been the proverbial farm on bigger vehicles, which Americans very suddenly did not want in the wake of skyrocketing gasoline prices last summer. That fact, coupled with high labor expenses in the US relative to its operations in the rest of the world, have put Ford in a situation where it is said to be mere weeks from declaring bankruptcy. Legislation to give federal grants to US automakers, including Ford, GM, and Chrysler, failed in the Senate last week. Now, the Bush administration is considering authorizing Treasury Secretary Henry Paulson to give extended loans to these automakers. Even if it does declare bankruptcy in the coming days, Ford's ability to display design innovation in the electronics field, like last year, may not be seriously jeopardized. Early in the year, it was revealed that the parts necessary for Ford to include Sync technology in one of its vehicles cost it about $28; installation labor can't tack on too much more to those costs. If Ford and the other automotive giants seriously curtail their presence at CES this year, as some believe they may, it could be more of a signal of reducing short-term expenditures than cutting back on long-term commitments to design innovation.

But that was then. As you read this, the nation is waiting for details of a Congressional auto-industry bailout -- not entirely able to conceive that there might not be one, not at all sure what it should be if there is, and not incidentally disgusted that Mulally and some of his fellow execs took private jets to DC to beg for that money. Though one can almost excuse Mulally that bluner; he was after all a senior executive at Boeing until 2006, so maybe a little confusion about which vehicle he was taking to work that day is understandable.

That's true of automotive gear at CES too. Even last year, the auto portion of the show leaned toward the kind of high-end stuff that either confuses you (really, iPod-based car controls? a woofer so powerful it more or less dissolves passengers into their component atoms?...um, wow) or makes you go home and meditate on the benefits of public transportation. Some of the audio systems alone cost more than any car you'll ever drive that doesn't get returned to a rental lot at the end of the week.

But, as we said, that was then. This year, automotive presence at the show is down, and many of the vendors we're hearing about are showing less. Boom and bling haven't disappeared over the past 366 days, of course, any more than the 16% drop car and truck sales this year made those vehicles magically go away from overpacked lots. They're somewhere; it's the customers, and the booth viewers, you've got to wonder about.

Mulally has been telling reporters than he'll accept a salary of $1 next year if that'll help secure the bailout. Nice gesture, though based on his compensation for 2006 and 2007, one suspects he's got enough saved to get by at home. Bernard Manoff aside, most people understand that above a certain level, you don't live paycheck-to-paycheck and look silly pretending -- but sometimes you've got to make the gesture, simply because not doing so looks worse.

And maybe that's the real CES story this year -- the new austerity, and doing the things you've got to do to get through it. But now that we know we've been in a recession since the last CES, maybe we ought to look carefully at this one for signs of what's ahead not just for four days of the show, not just for the industry, but for the whole country -- nay, the world -- at CES. First big event of 2009, right? What's not to overread?

This is a tech publication, and we will soon awash in writeups of screens and smartphones and software and talk of every sort of gear. But perhaps it's the cars we ought to be keeping an eye on. After all, the Provoq reveal wasn't the most enduring image from last year's show, but last year's show did include an auto-related image that should have told us everything we needed to know about 2008: Bill Gates, driving off into the sunset...in a Ford Focus.