Mary Barra will keep her job as GM CEO, thank you. She has no interest in joining the Trump Administration. And she made the point eminently clear when asked on an investor call to discuss the automaker’s stellar first-quarter earnings.
Barra sits on a panel of outside experts to advise President Donald Trump on economic issues, and in photo opps when the group meets, she is usually seated right beside the president. There has been speculation that she would be tapped by the White House—potentially to run the National Highway Traffic Safety Administration—but she quickly shut that down today.
“I am 150 percent committed to General Motors,” Barra said, calling this the most exciting time she has seen for GM in her 37 years with the company. The future is bright as GM aims to be on the forefront of electric vehicles, autonomous vehicles, and connectivity in general. And the automaker is tooling up to launch more crossovers, redesigned full-size pickups and SUVs, and a new Corvette.
The Chevrolet Bolt, named Motor Trend’s 2017 Car of the Year, continues to roll out across the country. It is currently sold in eight states: California, Oregon, Virginia, Maryland, Massachusetts, New York, New Jersey, and Washington. More northeastern states will be added in May, and the model will be available across the U.S. later in the year, Barra said, as well as some global launches.
Built at the Lake Orion plant in Michigan, the Bolt rides on an architecture that will continue to evolve and expand to more vehicles over the next few years. And volume for the BEV architecture used by the Bolt will be leveraged in China which Barra said will be the first and probably largest EV market.
“We are the first OEM that is profitable on electric vehicles from a technology, from a performance, and from an affordability perspective. We have a steady ramp of products that you’re going to see over the next couple of years in electrification,” Barra said.
In addition to reducing cost through scale, GM has been working to reduce the cost of the lithium-ion battery cells. “We are ahead of the curve on our cell costs. A couple of years ago we were at $145 (per kW-h when the Bolt was preparing for production). Now we’re below our curve as we get to our goal of being under $100. That is progressing very well.” Once the target is met, a new one will be set.
GM also continues its advances in self-driving cars. The automaker recently announced a $14 million investment in a new R&D facility in San Francisco for subsidiary Cruise Automation and plans to hire 1,100 people to work on automated vehicles. Barra said work is proceeding quickly, and there will be more news later this year on their progress.
Autonomous vehicle development is occurring in San Francisco, Scottsdale, Arizona, and Michigan. So far there have been zero incidents while testing “which gives me confidence that we are on a good path,” Barra said. As for timing, autonomous vehicles will be available “sooner than you think.”
And Super Cruise, GM’s hands-free, semi-automated driving technology, is coming this fall on the 2018 Cadillac CT6 sedan using precision LiDAR map data, cameras, sensors, and GPS to gather real-time data to determine when to accelerate or brake and how to steer.
In terms of connectivity, last month GM announced it would be first to offer an unlimited data plan for $20 a month for vehicles that have a 4G LTE system that enables them to serve as hot spots.
The updates came in a call to discuss first-quarter earnings. Net income was up 34 percent to $2.61 billion, a new record start to the year. Profitable trucks and SUVs contributed to the results, including $3.4 billion in pretax profits in North America. And with a slew of new crossovers hitting the market—including the Chevrolet Equinox and Traverse, GMC Terrain, and Buick Enclave—the pricing outlook is strong even as the industry becomes more competitive and the temptation is to increase incentives to move metal.
Last month GM announced the $2.3 billion sale of Opel/Vauxhall to PSA, part of ongoing efforts to transform the company, Barra said. The transaction will close later this year, and while GM will take a charge of about $4.5 billion, GM expects significant cost savings from shedding the brands.
Chief Financial Officer Chuck Stevens warned earnings will be impacted later in the year as GM has scheduled about 13 weeks of downtime in the third quarter for a number of plants to retool. The automaker is making way for some key vehicles including a redesigned Chevrolet Silverado pickup and crossovers such as the next-generation Buick Enclave and Chevrolet Traverse. And the Bowling Green plant will also go down for several months to prepare for the 2018 Corvette line that is expected to include a new ZR1.
As for general fears of a downturn, officials note that this is the eighth year of expansion in a cyclical industry. But GM is prepared for a downturn. Immediate ways to reduce costs include marketing where costs are significantly variable and GM could remove more than $1 billion if needed, Stevens said. Additionally, manufacturing costs are more variable now that 30 percent of the workforce is short term and could be let go without having to supplement unemployment benefits. That figure will increase to 50 percent of the workforce in a few years.