DETROIT – Many were shocked earlier this year when General Motors announced it was selling its German Opel and British Vauxhall operations to France’s PSA Group, essentially bailing out of Europe and ceding its status as the No. 1 or No. 2 automaker in the world according to vehicle sales.
But GM CEO Mary Barra tells reporters at an Automotive Press Assn. event here that in the new world GM inhabits, size just isn’t as important as it used to be. “We have to be good stewards of our owner’s capital,” she says. “So we are deploying capital and investing in businesses that we need to generate an appropriate return,” she says.
“If we are somewhere where we just don’t see a path to having the right returns, there are so many (other) choices we have now. We’re going to invest in opportunities where we have greater strength and greater opportunity to grow and generate the right returns.”
Even though the loss of Opel and Vauxhall vehicle sales means GM could sink farther down the list of the world’s largest automakers by volume when sales are tallied at the end of the year, Barra isn't concerned about dropping even further behind Toyota and Volkswagen.
“Scale still is important and we still have tremendous scale if you look at our leadership positions in the U.S., China and South America, but we aren’t the company anymore that plants a flag everywhere and tries to be everything for everybody all the time,” she says.
Other highlights from Barra’s APA appearance:
She won’t say when, but Barra says GM definitely has a roadmap to reducing the high costs of electric and autonomous vehicles and making them profitable in the future.
Eliminating federal tax incentives of up to $7,500 for the purchase of electric vehicles clearly would have an impact on EV sales, but Barra says GM is not changing its EV plans no matter what comes out of the GOP tax reform efforts. “We’re going to continue to drive down the costs because we know (the tax breaks) are not going to last forever.”
Barra is not worried about autonomous and electrification technologies commoditizing vehicles. “We’ve made a lot of plans... There are lots of ways to distinguish between brands,” she says.
GM is hiring lots of workers with expertise in science, technology, engineering and math, so-called STEM skills and it is hiring them not only in Michigan, but also in Canada, Israel and Silicon Valley.
Convincing talented young people to join a giant automaker headquartered in Detroit is not as tough a sell as it sounds, she argues. Students want to work on something that will actually get to market and they want to go somewhere where they can make a difference. GM can tell a story they find interesting, Barra says.
“There’s a lot of interest in GM. Detroit is becoming a very attractive place.”
