Bloomberg Businessweek Europe - 23.09.2019

(Michael S) #1
Bloomberg Businessweek

Irwin, managing director of Accenture’s automotive
and industrial practice, but the company is also
scouring places such as Carnegie Mellon, MIT, and
Stanford for computer-science talent. Suddenly the
car guys are the wrong kinds of nerds.
In addition to Barra’s town hall meeting, Reuss
hosted one with GM’s engineering staff. He declines
to generalize the staff ’s reaction but says he got more
than 1,000 responses to his meeting and people at
least seemed to understand what GM is trying to do,
and some embraced the changes.

Chevy Bolts lose about $9,000
apiece—a big gap to close. While it’s a given that GM’s
EVs need to get better fast, Barra at the same time has
to keep money flowing from GM’s traditional busi-
nesses even as U.S. and China vehicle sales slide.
(Never mind the threat of recession and the toll of
the strike, however long it lasts.) “She’s damned if she
does and damned if she doesn’t, really,” says David
Keith, an assistant professor at MIT’s Sloan School
of Management who’s followed the industry shift at
GM and other companies. “Wall Street wants both.”
One possible solution to Barra’s either-or problem
is in place at GM’s assembly plant in bucolic Orion
Township north of Detroit. The Bolt is built there,
and so is the gas-powered Chevrolet Sonic. Some of
the Bolts shuttle from the main line to a few open
bays where workers attach sensors and other tech-
nology that enable the cars to see for themselves.
“This is the only facility in the world that makes
internal combustion cars, EVs, and autonomous vehicles at
the same time,” says Jack Hund, plant launch operations man-
ager. “That should give us job security.” It also relieves Barra,
for now, of having to spend billions of dollars on new EV facto-
ries before it’s clear that consumers will actually buy the cars.
President Trump has taken potshots at GM since the
post-Thanksgiving announcements, no surprise given that
the company has shuttered its massive Lordstown plant, in
the Ohio county that helped elect him. Barra isn’t about to
pick Twitter fights, but she doesn’t seem intimidated by the
president and has stuck to her plan. With billions of dollars
in capital projects constantly in the works, she could appease
Trump by announcing some future plant investments. That,
however, would deprive her of bargaining chips in UAW con-
tract negotiations while undercutting her message to the union
that GM can’t afford to hold onto underused factories. The cur-
rent plan for Lordstown is to sell it and possibly build a battery
plant nearby that would employ hundreds of union workers
instead of thousands.
Barra is also looking to shave costs by hiring more temps,
a significant issue in the strike. “Job security is always a big
issue,” says UAW Vice President Terry Dittes, the union’s chief
negotiator with GM. “This is a tough time for our members. It’s

not just limited to a couple of issues.” The union has repeatedly
criticized the company for investing in Mexico while laying off
U.S. workers. Another common refrain is that the UAW sacri-
ficed when GM needed it, and now hourly workers ought to
get theirs. “We want to see reciprocation for what we gave to
the company,” says Bryan Moore, a forklift driver who works
at GM’s Detroit-Hamtramck plant. That factory was on last
November’s hit list; one of the unions goals in negotiations is
to keep it open.
Barra seems prepared for that sort of reaction. When GM
was planning last November’s announcement, management
didn’t even make a plan to have its Washington staff do pre-
emptive damage control with the Trump administration and
the Michigan and Ohio congressional delegations. Barra cal-
culated that she needed to withstand the heat to prepare GM
for a near-term downturn and long-term upheaval—and, even-
tually, if all goes according to plan, success.
“It’s hard when you’re in the focus of all the criticism. You
have to stay steadfast,” she says, without mentioning Trump
or the union. “One of the things I learned in the bankruptcy is,
if you have a problem or a challenge, it never gets better over
time, you have to address it. Once you know what you need
to do, you need to do it.” <BW>

Building a Bolt in Orion To w n s h i p

BOLT: COURTESY GENERAL MOTORS; DATA: COMPANY REPORTS

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