CEO wants GM to stay ahead of Tesla


General Motors Chairman and Chief Executive Officer Dan Akerson addresses the media before the start of GM's Annual Meeting of Stockholders at GM's Global Headquarters in Detroit, Michigan in this file photo taken June 12, 2012. (Rebecca Cook/Reuters)

As General Motors chief executive Dan Akerson sees it, Tesla Motors has the potential to be a disruptive force to the automotive industry, and he doesn’t want to be caught off guard.

Akerson has assigned a small team to study billionaire industrialist Elon Musk’s upstart electric-car maker and how it might threaten the 104-year-old automaker’s business, said Steve Girsky, GM vice chairman.

“He thinks Tesla could be a big disrupter if we’re not careful,” Girsky said. “History is littered with big companies that ignored innovation that was coming their way.”

The approach is part of Akerson’s effort to change GM’s culture as he tries to push the automaker to move beyond its 2009 bankruptcy reorganization and make it the most profitable car company in the world. He has redirected research and development spending, focusing efforts on commercial applications, quickening implementation and investing money in startup companies that are developing cutting-edge technology.

Akerson’s distaste for GM’s old ways is well documented. He joined the company’s board as part of the 2009 government-backed bankruptcy and $50 billion bailout. As CEO, Akerson has complained publicly about GM’s “committee culture” and “fiefdoms.” His efforts have reached far: to stop losses in Europe, develop cars more efficiently and quickly, make drivers more connected, improve customer service and quality.

Last year, GM trimmed research and development spending by 9.3 percent, to $7.37 billion, according to a regulatory filing. R&D has also seen some high-level executive departures, including Chief Technology Officer Tom Stephens; Alan Taub, the R&D head; and Chris Borroni-Bird, who was working on futuristic vehicles.

“The fact that they probably can’t afford those sorts of black-box endeavors anymore shouldn’t be news to them,” said Eric Noble of the industry consultant Car Lab. Revenue last year was $152 billion, down from $206 billion in 2006.

Girsky, who has been overseeing GM’s efforts to turn around its European business, is specifically interested in connected cars and said paralyzing traffic congestion could be a major problem for automakers in the future.

He replaced Stephens and Taub with Jon Lauckner, head of GM Ventures, which was set up in 2010 to make investments in startup companies, such as the $7.5 million equity investment in Sunlogics and $5 million in Powermat.

Girsky has started giving employees Apollo 13 patches, which honor the 1970 NASA space mission that faced seemingly insurmountable odds that were ultimately overcome.

“The definition of success at R&D used to be, ‘How many patents have you generated?’ ” he said. “Well, we have a new definition of success: How much of your stuff actually goes into the car?”

GM has been a leader in plug-in electric vehicles with its development of the Chevrolet Volt plug-in hybrid. While the Volt was met with disappointing sales, GM is working on the next-generation version that Akerson has indicated could come out in 2015 or 2016. He told an audience in California this year that engineers are working to cut as much as $10,000 from the cost of each Volt, which starts at $39,145.

Tesla’s Model S, priced from $69,900, outsold the Volt in the first quarter, and the company hasn’t announced its
second-quarter deliveries yet. The Model S underbody is similar to a skateboard-like concept that GM proposed in 2002 for fuel-cell vehicles, Girsky said.

“It’s fascinating,” Girsky said. “I don’t know if it’s going to work . All I know is if we ignore it and say it’s a bunch of laptop batteries, then shame on us.”

Paying attention to Tesla is a change for GM, Girsky said.

“In the old days, they would’ve said, ‘It’s a bunch of laptop batteries and don’t worry about it and blah, blah,’” Girsky said. Akerson’s “view of the world is this kind of thing can impact our organization. And we need to be prepared.”

Comments
Show Comments
Most Read Business

business

Success! Check your inbox for details.

See all newsletters