Barra: GM No Longer “Everywhere For Everyone With Everything”
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In the early 1930s, General Motors rose to become the undisputed sales leader in the automotive industry thanks to the implementation of concepts like Alfred P. Sloan’s “ladder of success,” which established a clear pricing structure that was flexible enough to satisfy a wide variety of tastes and buying power, but without creating overlapping products and inter-brand competition. Over time, GM grew to become the biggest industrial enterprise in the world. But today, the automaker is no longer all things to all people, as acknowledged by CEO Mary Barra.
“There was a point in time where we were everywhere for everyone with everything,” Barra said in a recent interview with Bloomberg. “We had to say, ‘OK, where are we deploying capital that’s not generating appropriate returns?’ Once you start to believe in the science of global warming and look at the regulatory environment around the world, it becomes pretty clear that to win in the future, you’ve got to win” with EVs and autonomous technology, she said. “This is what we really believe is the future of transportation.”
Indeed, GM’s push into EVs and autonomous tech comes after the company has shed numerous brands over the last several decades. Back in the ‘90s, GM boasted more than 14 brands under its corporate umbrella. Today, that figure has dwindled to just eight.
| 1995 | 2011 | 2020 |
|---|---|---|
| Chevrolet | Chevrolet | Chevrolet |
| Cadillac | Cadillac | Cadillac |
| Buick | Buick | Buick |
| GMC | GMC | GMC |
| Pontiac | Holden | Holden |
| Saturn | Opel | Wuling |
| Hummer | Vauxhall | Baojun |
| Oldsmobile | Wuling | Maven |
| Opel | Baojun | |
| Vauxhall | Jiefang | |
| Holden | ||
| Wuling | ||
| Baojun | ||
| Saab |
This dwindling movement can also be seen in the GM product line, with models like Cruze, Impala, Volt, Verano, LaCrosse and several others getting the ax over the years in North America. The movement also applies to where GM sells its products, with The General pulling out of Europe back in 2017 while selling off Opel-Vauxhall to PSA Groupe, a withdrawal from South Africa, and a significantly reduced lineup in Russia and Southeast Asia.
Today, GM is essentially cherry-picking the segments where it sees the potential for profit. By comparison, the automaker was very much “everywhere for everyone with everything” at the height of its power.
The reasoning behind it all is clear – GM is playing the long game. The moves to consolidate, downsize, and lean out are intended to deliver a brighter future, or at least what GM thinks the future will be. As such, what we’re seeing now are vehicles from which GM can earn a profit that it will, in turn, invest to get to that future goal. The maneuvering is a means to that end.
So then, what exactly does GM see in its crystal ball? As the automaker has outlined in the past, General Motors clearly believes in a future with “Zero Crashes, Zero Emissions, Zero Congestion,” and that means ongoing investments into autonomous technology and EVs alike.
But in the process of working towards those goals, GM is taking away many of the products that make up the core of its business. Internal combustion cars are so far the only profitable vehicles GM currently makes, as the automaker is losing around $7,000 on every Chevrolet Bolt EV it sells. The other GM electrified effort, the Chevrolet Volt, is believed to have lost around $10,000 per vehicle.
And therein lies the conundrum: with EV adoption sitting around two percent in the United States and that figure not forecast to change significantly in the near-term future, GM’s move to shrink may look unnecessarily rash. But again, this is a longterm strategy that requires a significant amount of planning upfront to be properly executed down the road. Put another way, GM is cutting off a few toes right now in an effort to save the foot, and to eventually grow a whole new leg.
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How would anyone here know if the customer wants an EV ?
Most on this site are either old boomers, and old small block performance guys. Or GM employees either at the Customer service level, or at the dealer level, so I guess the dealer employees are not GM employees directly but !!
So like I have said many times, Marry is making the correct decisions based on the masses, GM dealers haven’t a clue what the customer wants, or how to treat a customer, not all, but most !!
A GM dealer is not going to know if anyone wants an EV because first of all, the people who want EVs, don’t like dealers !!!
Tesla is another example of this, Amazon is another example of this !!
So again if GM is trying to say the dealers tell us what to build, GM will never know !!
Just like GM is saying the GM customer service is great, How would GM know, they only have the GM dealer to tell them, and the dealer tells them everything is great, keep giving us that deal!!!
Nobody knows what the future holds, except death, but we all know, what we have today will shape the future, AND PAY FOR IT !!!
This concept of the future has to pay for itself is a late 90s game !! Before that you made the right decision based on the data, and all the data, not made up data ” in house ”
And some here are correct in saying GM is just assemblers any longer, what is made by GM ? engineered by GM ? Anything ?
So we have a vehicle assembly company, trying to work out a deal with the assemblers, and no body engineers or makes anything !!!
Doesn’t seem right, and its not, and is short lived in the new world, the real world of the masses !!
my opinion!
Electric cars aren’t making any company that sells them any money. They cost a lot more than a gasoline car. Selling expensive electric cars is kind of a break even situation for Tesla, but the market for expensive cars is sort of limited anyway. The market for electric cars is going to be limited as well.
The answers aren’t simple.
also they need less workers to build a EV because there are a lot less parts so where are all those UAW going to go ?? GM is getting ready for the future of having a lot less workers.
Working int the transportation business, I have discovered that when you go GREEN, you go Broke. The desire for EV’s is actually small and held in an urban setting where a car is a luxury not a necessity. Most of my co-workers just want a fun car to drive with enough amenities to make the commute comfortable, Don’t want to be looking for a charging station all the time, or lost range in the winter. The loss of the compact/mid size sedans has me looking to the other manufacturers and my driveway is filled with GM cars, I am also a shareholder and will continue to vote against the board of directors until they realize what how they are destroying a once great brand.
To ALL HERE on EVs,
Does anyone know if it is just the manufacturing in numbers that is the reason so many of you say EV lose money ??
Sure if you don’t sell vehicles in numbers, you cant make vehicles in numbers. But isn’t that the deal with all things !!
And that’s why its hard !!!!
Like GM currently and for a long time, has to purchase already engineered parts, and partner on parts, that’s because manufacturing in numbers it how the world works !!
You will not be able to come up with ANYTHING, get it , ANYTHING, new, that people want in huge numbers from the get go. And sometimes you do. Look at Tesla, again, “O” so many people wanted one, they could not make them fast enough, but they kept going, and are still going, not like when it was new, but neither are the rest of the auto makers, and Tesla is new, not 120 years old !!!
Again, nobody wants a GM EV because they are horribly designed ” 100 year old box on wheels “. Is the GM EV better than a Tesla, probably !!!!!!!!, But look at the two side by side !!!
If GM built a good looking Chevrolet Cruze ” sized ” sedan, pickup, and SUV, again Cruze ” sized ” they would sell !!!!
Not the ugliest thing we have ever seen competition that is the Bolt !!!
Trouble is, no investment money in scale to put them together fast enough, just like the trouble Tesla had, except they had a lot of Elon money to boost it !!!
I sure hope they make it, otherwise its just like every other new vehicle story in the USA that the big three teemed up with big oil have squashed !!!!
And they are trying their hardest to squash them also !!!
I say that EVs don’t make money because the companies that sell them don’t make any money on them.
Selling more of something you don’t make any profit on doesn’t improve the situation, and reminds me of the old joke about making it up in volume.
If it don’t make dollars it don’t make cents ?
It is clear in todays world the more you buy the more you save,
You know purchasing in numbers !!!
I relies if you make one offs and sell at a loss, its a loss !!
But if you buy batteries by the millions, they will be cheaper than one !!
That is what I mean by selling more, hence making more, hence purchasing more, hence saving on parts, hence building them cheaper, hence profiting more !!
Get it ?
Maybe not possible but !!
Some you guys can whine but GM is not going to put itself into a path of BK again like in the 2Ks. If having less brands and cater to less potential buyers so be it but at least they don’t have to go in-front of an import-loving Congress to beg for money again. I miss Pontiac and IMO probably a 2 model niche Pontiac line-up would be fine but it’s not 1990, it’s foolish not to prepare for EVs and emerging markets, sorry if GM won’t just cater to the US anymore.
I just want to know why so many people on here are unable to spell Mary.
There are at least 5 market forces converging over the next 5 years that are causing a disruption in the transportation industry. Renewable power at prices hydrocarbon can’t compete, Battery tech improvements to power density and cost, EV adoption, autonomous driving, and ridehailing services. The conjunction of these will spell the end for any automaker not wholly invested in BEVs by 2025.
Meanwhile, any automaker that isn’t investing in their own Battery Gigafactory NOW, will not have the battery capacity to sell enough BEVs to remain viable by 2025. VW figured that out, and just invested $1B into NorthVolt for their own battery factory. GM is talking about maybe converting one of their shuttered plants into a battery factory as leverage in the UAW negotiations. That’s not leverage: either GM does it, or they’re dead man walking.
Also Meanwhile, the UAW negotiations are with companies that have almost no solid commitment to EVs.. they’re negotiating the arrangement of deck chairs on the Titanic.
And lastly meanwhile – Tesla will deliver 100K cars this quarter, and VW is on the path for 1M EVs produced by 2021, and startups are emerging in the BEV Truck and SUV market. GM literally has 2 years to get with the program, or be obsolete.
In 2025, BEVs will still be the minority of vehicle sales.
I’ll be optimistic and predict that it will reach maybe 10%.
Even if that’s the case, it’s flat-footed not to have a vehicle(s) and a R&D team to compete.
Oh I agree, and I’m pretty sure every company will have something available. Probably way more things available than they’ll actually be able to sell.
There will be a lot of money lost on the development of these electric vehicles if all the companies are as “all-in” as they claim.
Yes, money will be lost if you people keep tying it to a singular thing.
How much money and failures were had in the light bulb invention ?
Yet here we are still inventing new light bulbs !!
And I’m sure some here still use the energy pigs of light bulbs !!
Its like that !!
in Europe has is $7-$8 a gallon and they sell less EVs than in the USA where gas is cheap. the only way that EV are going to take over the USA the govt has to outlaw ICE engine.
The reason why GM became so big was because of one man not mentioned who was Harley Earl he introduced styling to the industry he is the reason all companies use clay modeling today he took control of how the car would look out of the hands of the engineers and put it into the hands of the stylists this is what GM needs today because you can only do so much with a jellybean they need to bring back some of the flashiness of decades gone past
She is not Chairman of the Board.
Detroitrealist,
Unless she stepped down over night,
Yes, Yes she is chairman of the board and CEO of the company, and the largest single person share holder !!!
What do you think she is buying with that 22 million a year !!
I wish she was paid more and could just own and run the whole show, and get rid of the ” good old boys ” holding her back !!
She is headed there, and when it happens, I will buy GM stock !!
You are joking right?
Mary Barra is incompetent. She talks a good game. Putting all the power into the hands of any one person in an organization is a recipe for disaster. Remember the chain is only as good as its weakest link. Her having no other background other that being under the toxic management of GM will not bode well for the company.
It would be better to get someone from outside of the organization (e.g. Ralph Giles?) who has no ties, does not owe anyone anything, and one that can clean out the incompetence that has been GM for the past 40 years.
I think that a more likely scenario will be Barra leaving the organization within a few years.
“Entitlement” is the new Dinosaur.
Lets take the Ford F series truck,
And the GM truck lines !!!
Lets say 2.5 million a year produced, just a number !!
If there was ZERO manufacturing capabilities, absolutely nothing, for any part, ok may be 5 % of the parts !!
Any idea how long it would take today, this day, right now, to start selling them ?
And how long would you loose money, before you broke even on that manufacturing investment ?
And they are the two most sold vehicles in the US, aren’t they ?
Then take away all the S o c I a l I s t gas stations, and tell the private sector to drill for oil on their own !!
That would be a great place to start this race between EV and ICE !!! Today in this world we live in today, with the knowledge we have today !!
Without all the tax payer S o c I a l I s m , and the C a p I t a l I s t regulation !!!
Just a thought !!!
https://nypost.com/2019/10/02/uaw-mulls-no-confidence-vote-in-general-motors-ceo-mary-barra/
Interesting piece. Although symbolic, I cannot remember the last time this has happened.
Barra is 110% right saying “to win in the future, you’ve got to win with EVs and autonomous technology.” and “This is what we really believe is the future of transportation.”
To get “Zero Crashes, Zero Emissions, Zero Congestion” the GM synergy will be with cars that have batteries, self-driving, artificial intelligence and ridesharing, especially with electric autonomous taxis.
as it is proven , being OK is not enough so Mary and her cronies and penny pinchers must go or buy 2030 there will be only 2 divisions left
If GM is lucky…..
Barra has come a long way since his tough first year as CEO. At that time, just sitting on the hot seat, she was “questioned” by the US Congress about the recall of millions of cars due to fault in the ignition system. This incident also caused GM to be lashed out by the media and Barra, as GM’s new owner, was equally tired.