GM CEO Mary Barra Knows Big Changes Are Coming to Autos. Here's How She Intends to Lead Not React
There's a pair of numbers that I think say a lot about the looming challenges GM CEO Mary Barra and her peers at the global auto giants face. The value of Tesla, Uber and Mobileye together equal $84.5 billion. The market value of GM? $56.4 billion.
Each of those first three companies is disrupting the auto industry from different angles: Tesla undermines gas engines and dealerships; Uber challenges the need to own a car; Mobileye, which makes camera-and-computer driving systems, questions the need to even have drivers. All of those companies are smart, aggressive and not required to maintain legacy products at the expense of future ones. And investors appear to believe that they're on the right path.
GM has to stay just as agile and inventive as these challengers — while also managing 212,000 employees across 396 sites, keeping 20,000 dealerships happy and finding a way to win back consumer and government trust after being forced to recall 36 million vehicles last year linked to over 100 fatalities and 250 injuries.
With that kind of pressing to-do list, Barra could be forgiven for focusing on the present and dispatching, say an “innovation center,” to handle the future threats. But instead she’s committed to tackling each of the disruptive forces, one by one.
“In key areas we definitely want to lead,” she told me. “And I think in many cases, we are.”
Barra dropped by LinkedIn’s Empire State Building offices to talk about the future of GM — both technologically and culturally — and her own career. She’s a GM lifer, who after 35 years and serving in over half-a-dozen major leadership roles — was tapped to lead the post-bankruptcy GM. She was trusted in the organization and knew where things were good and where they were bad. But she couldn’t just focus on reorganizing and righting the ship. She had to bring outside thinking and disruptive urgency into a company where getting ahead often meant mastering the “GM nod:” a technique in which GM’ers would confirm in a meeting that they were on-board with an idea or direction — and then completely ignore it once they walked out of the room.
Part of the way she’s done that is to embrace Silicon Valley, announcing at the Code Conference that she was injecting both Google and Apple into the dashboard operating system on certain Chevys. But she's done so in a way that doesn't adopt the Valley's philosophy but borrow from it where it fits GM's expertise.
Take electric cars. Electrification of the fleet will continue to grow, Barra acknowledges — something the pre-Barra GM CEOs seemed ambivalent about. For now, the leading voice in EVs is Elon Musk, who is winning the hearts and wallets of the 1% with his Teslas. (At the company's annual meeting earlier this month, shareholders urged Musk to create vegan-friendly interiors.) Barra’s focus is being budget-friendly.
Electrification is for everyone, "not just the elite,” she says. “Affordability will really pave the way because customers are very rational. [They] are gonna do the math and they're gonna figure out, ‘Hey, what works best for my use case?’”
GM's has a massive network of dealers and a huge base of customers who can be turned on to the technology. The coming Chevy Bolt, packaged with a Tesla S-challenging 200-mile-range battery, will be priced at about $30,000 vs Tesla's minimum $75,000. To back up the talk, she announced in February a $160 million investment in a plant outside of Detroit to produce the complicated EV.
When it comes to self-driving cars, she’s even more eager to bring computers to the cockpit — but, again, in an way that will reach the widest method and with the least disturbance to the auto ecosystem (for instance: nervous regulators and insurers). While Google and, according to Bill Gates, Uber, are focused on deploying fully self-driving cars — Google recently noted that only 8% of its fleet had had accidents — Barra thinks buyers aren’t as ready as the technology is and as tech companies think they are.
Her plan is evolution, not revolution. Let a driver take his hands off the wheel now and then, have the cars talk to each other, bring autonomy in slowly. Barra's a fast but careful speaker and the words she uses to describe the change show she's clearly thought out how buyers are going to react. Selling them on disruption in the driver’s seat isn't going to be as easy as it sounds. “People talk about autonomous,” she says. “I like to call it intelligent driving systems.” Autonomous is scary; intelligence is liberating.
“You’ve gotta start with the customer,” she says. “I had the opportunity to drive our vehicle where you can take the hands off the wheel. It's eerie. And …when you're behind the wheel, it's a huge responsibility, whether you're-- you're actually steering or not.”
It's clear why Barra is well-liked among employees. She's friendly and direct. And even while clearly explaining why her way is the best way, she has no problem praising her frenemies in the Bay Area. "You know, I went to Stanford. I did my master's work at Stanford. And I love Silicon Valley. We work regularly with a lot of companies there. But that's not the only place where innovation comes from. I love that energy. But there's a lot of issues you've got to work through. You know, we will."
The fastest change in auto history is arriving at Detroit's doorsteps, brought on by brilliant outsiders and changing consumer demand. It's up to this ultimate insider to make sure GM is part of the change, not getting rocked by it.
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Other highlights from our interview:
On making sure cars reflect the smart phone experience:
Generally, people are going to buy a smartphone before they have the discretionary income to buy a car. So that kind of connectivity is very important.
On whether current gas prices are a new normal:
It's very likely that gas prices will go up again. And possibly even go higher than they were.
On thinking beyond the battery:
We talk about the importance of the battery and electrification, but if you can make the whole vehicle efficient it uses less energy… We have worked on very lightweight structures that still give the performance from a crash, from a driving and handling, you know, hugging-the-road-type of perspective, but much lighter. And when you take weight out of the vehicle, it needs less energy to propel it. And you start to look at every way you can make each subsystem in the vehicle more efficient, which will allow it to go farther as well. So it's not only battery development, it's every aspect of the car.
retired at Pitney Bowes Inc
9 年Why does GM make good dependable autos and then stop making them, no matter how many they sell. They have done it for years! The most recent was the HHR.
US Energy & Renewables Policy, Sales Strategist, and Revenue Growth Leader—Distributed Energy, Data Ecosystems, Energy Policy, Utility & Smart Cities
9 年This article twists the agenda of Tesla and others. Mary Barra is throwing big, bad, GM weight around to stomp out ingenuity like the enormous dinosaur that it is. Tesla is working in three stages of development for electric cars, with the final product to offer a $30k price point for ALL to benefit. Let's be clear, barking at Tesla for "getting in the way" of the fossil-fuel driven auto market (subsidized by 400-500Billion$ globally) is another way to stay you are refusing to invest in more sustainable energy programs.
Helping your Family move with confidence, when buying or selling a Home.
9 年Keith Bates -Such a fact-filled riposte -- the rhetorical equivalent of sticking out your tongue at me, very persuasive. Following are some of the facts I noted to refute the proposition that electric cars are the future of the American auto industry, and the fiction that they are saving the planet. 1) batteries do not create electricity, they store it, so you have to get the electricity from somewhere. Source: MIT School of Engineering https://engineering.mit.edu/ask/how-does-battery-work 2) electric cars are effectively coal-powered cars (because coal is the single greatest source of electriciy generation in the USA); in the USA the somewhere that you most often get the electricity to re-charge your car battery is from a coal-burning plant. Source: US Department of Energy https://www.eia.gov/tools/faqs/faq.cfm?id=427&t=3 3) Detroit pushes so-called environmentally-responsible cars, but Americans prefer SUVs. Sources: The New York Times https://www.nytimes.com/2015/01/13/business/automakers-keep-rolling-out-electric-vehicles.html?_r=0 and Alliance of Automobile Manufacturers https://www.autoalliance.org/auto-marketplace/popular-vehicles reports greatest percentage growth category in year-over-year sales continues to be SUV's. Too bad you opted-out of reasoned argument with supporting evidence, and settled for ad hominem.
Director at Sumertas Property Investments
9 年Injecting Google and Apple to the dashboard is a great idea, well done more reasons for accidents, how about installing fatigue censor as well, might save some lives?