It’s hard to imagine the General Motors of eight years ago as it stands today.
In 2009, as the economic recession began to reverberate across American homes, GM filed for Chapter 11 bankruptcy — the fourth-largest bankruptcy in U.S. history — and seemed all but destined to crumble under the compounding weight of debt and the company’s inability to compete in the ever-evolving automobile market.
Following a government bailout of nearly $81 billion and the promotion of Mary Barra — a home-grown GM leader who joined the company in 1980 straight out of college — to the chief executive, GM seemed to be on the rebound.
But then, U.S. courts whacked the company with $900 million in fines as over 130 people died due to faulty ignitions in GM-produced vehicles. Once again, GM seemed doomed to fail.
And yet, despite the odds being stacked against them, the iconic manufacturer and beacon of Detroit’s automobile industry has risen again to become a prominent player in the latest worldwide race: driverless cars.
Just as the post-World War II GM rose to become a leading American manufacturer, Mary Barra has entered the driverless car game head-on and is playing for keeps.
The New York Times quotes Barra as saying, “We don’t go in to compete. We don’t go in to have an entry. With every new product we’re doing, we are going in to win.”
And a win is exactly what GM needs after eight years of rebuilding. The stock price has remained largely flat since the company re-emerged on the stock market in late 2010 and many executives, Barra included, believe the company is undervalued.
Emerging as a prominent leader in the race for driverless cars could be just what the doctor ordered. But to make it happen, GM needs to worker smarter, faster, and more effectively than ever before. In short, GM needs to become a tech company, because that’s exactly who they are up against.
Why GM Needs to Shift from a Car Manufacturer to a Tech Company
In the race to get driverless cars on the road, GM faces an entirely new set of adversaries. Instead of going head-to-head with the usual suspects — Ford, Chrysler, and a slew of international automakers — GM needs to compete with tech companies like Google, Apple, Tesla, and Uber to win. It’s a new game, and it’s forced Barra to rethink the way the company operates and brings products to market.
They need to think and act like a tech company in order to have any chance of winning. And that’s exactly what Barra plans to do.
“I do believe General Motors is a tech company,” Ms. Barra said in the same New York Times piece. “We put these products on the road that integrate 30,000 parts and have hundreds of millions of lines of code in them already. And we have to make them durable and work in all environments.”
Barra has explicitly stated she wants to be the first to go-to-market with a driverless car and recent activity seems to hint toward that being a genuine possibility.
But first, let’s take a look at the competition.
What Advancements Have Other Tech Companies Made in Autonomous Systems?
A number of key players have emerged in the race to get driverless cars on the road. Some — like Google and Uber — have been forthright about their operations, proudly demonstrating test runs of their driverless vehicles to the media. Others, however, have been more secretive about the projects they’ve undertaken.
Apple — whose storied history is synonymous with secrecy — falls into the latter category. In a recent interview with Bloomberg, Apple CEO Tim Cook confirmed the company is experimenting with what he called “autonomous systems.”
Initially, it was believed Apple’s primary interest was in developing the software would underwrite self-driving vehicles. But “Project Titan” — as it’s been dubbed internally by Apple — took a sharp turn in 2016 when the company locked down a permit with the California Department of Transportation to begin testing three, self-driving SUVs in the San Francisco area.
As one would expect from Apple, they’ve continued to keep their ultimate plans under wraps. Will they develop the technology that pairs with the vehicles built by companies like GM and BMW? Or will they launch their own line of cars?
Such ambiguity does not exist for other major players like the aforementioned Google, Uber and the fourth-largest car manufacturer in America, Tesla. All three companies have openly shared their plans for developing self-driving vehicles, with prototypes developed and currently being tested on the road of cities like Pittsburgh, Phoenix, and San Francisco. Tesla’s CEO, Elon Musk, has been so bold as to say their entire fleet of vehicles will be completely driverless within the next two years.
So, in light of the intense competition against players seemingly more tech savvy than century-old General Motors, how does Mary Barra plan to not only contend but actually win the battle to bringing self-driving cars to market?
Here’s Why GM Might Actually Have a Strategic Advantage in the Race to Put Self-Driving Cars on the Road
All it took was one ride.
Mary Barra sat in the backseat of a prototype self-driving car in San Francisco skeptical of whether autonomous technology had caught up to the concept. After all, people have been dreaming about self-driving vehicles almost as long as cars themselves have existed, but she wanted to see if the technology was smart enough to actually think like a driver.
Her one experience profoundly changed the focus and direction of General Motors. The company quickly shifted gears and went all-in on the concept of autonomous transportation. Within six months of that fateful ride, GM had refocused its production schedule to turn around a quality, affordable, self-driving vehicle before anyone else could. It’s a risky move for sure, but that’s GM’s first strategic advantage in the race: it’s a move they can actually make.
With the exception of Tesla, the other major tech companies working on autonomous cars treat the concept as a well-funded side-project. Apple is certainly not refocusing any of their resources from iPhone development to prioritize Project Titan, for example.
But GM doesn’t have other strategic initiatives. They don’t make phones, or web browsers, or home assistants, or virtual reality headsets. They don’t have a service-based business with over 160,000 drivers in the U.S. alone. What do they have instead?
Nothing to lose.
People already view GM as down and out — a remaining vestige of the Detroit auto boom. But that underdog appearance may be one of the most valuable cards in Mary Barra’s deck because it allows her the opportunity to bet it all on what she sees as a sure-thing.
“In this area of rapid transformation, you have to have a culture that’s agile,” Barra said in an interview with Fast Company. “We still have a lot of work to do.”
But the work they’ve already done has been quite impressive. Take, for example, the recent announcement that GM is already prepared to start mass-producing self-driving vehicles. After testing 130 autonomous Chevy Bolts, Barra said, “The level of integration in these vehicles is on par with any of our production vehicles, and that is a great advantage. In fact, no other company today has the unique and necessary combination of technology, engineering, and manufacturing ability to build autonomous vehicles at scale.”
And finally, the recent announcement that GM subsidiary Cruise Automation is recruiting a Head of Mapping shows that the company plans to expand into new territory: the development of HD mapping.
It’s a critical step in GM’s plan to take the autonomous transportation world by storm. To this point, Google has held a key strategic advantage in that precision mapping is a critical element of actually releasing self-driving cars to the general public.
However, now that GM has expanded their reach into that arena, the combination of a ready-made fleet of Chevy Bolts and the right mapping technology could make GM a very serious contender in the race to release self-driving cars. As the Fast Company article so appropriately states, “GM has, in short order, constructed a portfolio of assets dedicated to disrupting its own core business from within.”
What Does All this Mean for GM Jobs?
While it’s still too early to make any definitive judgments about the ultimate impact on job creation, there’s certainly reason to be optimistic about the potential opportunity.
Already in 2017, GM has added 1,100 new tech jobs in the Bay Area (where Cruise Automation is located). At the same time, Fortune reported in late 2016 that GM had more open job postings than any other car manufacturer related to autonomous vehicles.
Needless to say, it’s an exciting time for GM. And for talent interested in being a part of the next generation of this titan of the auto industry, Paysa is here to help.
Interested in learning more? Visit Paysa.com today to get started.