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Good morning Grid Connections listeners.

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And for those of you who may be listening
for the first time, the Grid Connections

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podcast is the show where we unravel the
complexities of electric transportation,

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renewable energy, and our electrical power
grid that ties all of this together.

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I'm your host Chase.

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And today we're joined by David Welch, a
Bloomberg Bureau Chief based in Detroit.

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David shares his knowledge of the
automotive market and perceptions of the

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market being based in the Motor City.

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Especially around electric vehicles, a
topic he's extensively covered and is

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passionate about.

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Our conversation with David takes us on a
journey through the automotive industry's

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transformative shift towards
electrification and autonomy.

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We delve into the heart of General Motors
guided by David's book, Charging Ahead,

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which is waiting for you in the show
notes.

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Should you want to learn more and get a
copy yourself.

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Make sure to check it out.

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The book highlights CEO Mary Barra's
leadership in steering the 120 year old

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company into a new era.

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This episode on packs the challenges GM
faces from industry, along with even

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serious corporate change to dealings with
the UAW and how they're navigating the

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roadmap they've set out for
electrification.

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But before we dive in a little
housekeeping, if you find today's

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discussion enlightening, please share this
episode with someone who will appreciate

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the insights as much as you do.

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Your support helps us grow and continue
bringing you the best content.

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Don't miss out on our weekly newsletter as
well packed with the latest industry news

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and behind the scenes content.

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Sign up today to stay connected with the
Great Connections community.

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You can also find a link to that in the
show notes as well.

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Plus, we love hearing from you.

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If there's a topic or guest you're dying
to hear from, reach out to us.

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Your feedback shapes our show.

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Now buckle up as we explore the
electrifying road ahead with David Welch.

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Tune in to discover the innovations,
challenges, and milestones defining the

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automotive industry's race towards a
greener, more autonomous future.

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With that,

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I'm joined today by David Welch.

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He's the Bureau Chief of Detroit for
Bloomberg.

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Thanks for joining us today, David.

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I think we're going to be covering a lot
of really interesting subjects.

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And I know you've recently come out with a
book kind of talking about GM and some of

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the challenges

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but real briefly for anyone that might not
be familiar with you can you share a

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little bit of your background and what
you've been kind of doing in the space

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around automotive and how you got into it.

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Yeah, so covering the auto beat on and off
for more years than I care to recount, but

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20 something years for Bloomberg and
before that Business Week, which was

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acquired by Bloomberg, it was the Detroit
Bureau Chief there too, actually started

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covering the auto beat in Texas, covering
the plants down there.

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And this was late 90s.

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So he had like AutoNation and CarMax that
used CarMega stories before they all

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morphed into something else.

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So I covered the retail side of it as well
and taking some breaks, going to New York,

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covered Wall Street for a bit.

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And, you know, back in Detroit as Bureau
Chief covering the auto industry.

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And yeah, the book Charging Ahead about
Mary Barra's effort to try to transform GM

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into an electric vehicle maker.

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And, it was tough.

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It was tough sledding when I wrote the
book.

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book a year ago and it's even tougher now
and some of it was sort of pre-saged and

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we can get into that whenever you want to
talk about it.

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But that's what the book's about.

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It's not saying GM's the EV hero, it's
sort of Mary Barra as this character

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trying to fix the company, change the
company.

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And it's really tough to do that with an
automaker that's 100 years old.

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No doubt.

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I think that's a topic we've discussed
quite a bit here.

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And I know a few episodes back we had John
McElroy on, and that was definitely a

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subject that we touched on was the
challenges that GM and others kind of the

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big three have definitely dealt with that,
with that disruption in the industry.

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I think let's start off as someone who has
been in journalism, specifically on the

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focus with automotive for so long.

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I think there's a lot of people who listen
that who have been following and in the

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electric vehicle space, especially,

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have been kind of maybe disappointed, it's
not the right word, but it has been

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interesting to see kind of gaps in
coverage of electric vehicles,

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specifically around like the knowledge
base of them.

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And recently we had kind of John Volcker
and we've had, as I mentioned also, John

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McRoy on, and one of those topics we've
really discussed is obviously the

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education at the dealership part.

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But I do think another part is around the
actual journalism and coverage of the

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automotive space right now.

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What do you think are maybe some of the
gaps that you've seen, at least around the

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knowledge base of electric vehicles, or
are there other areas that you think that

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kind of need to be improved to kind of
help make it a lot easier for the average

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person to understand and get into the
electric vehicle experience?

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Yeah, I think in some ways there's this
idea out there that EVs are really tough

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to own.

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And it is different.

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There are a lot of things EV owners need
to learn, particularly with charging.

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The charging network isn't great, but I
think people dismiss the charging network

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as practically non-existent.

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The fact of the matter is, it does exist.

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It's just, it's not on every street corner
like filling stations are.

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You live with EVs differently.

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And I've seen some really good stories
done on that.

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It's just not the prevailing narrative for
electric vehicles that you can live with

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them.

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And you can live with them pretty easily.

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It's just you're going to have to change
habits to do that.

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And that's sort of a consumer journalism
bit that I think could be told better.

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And the other part of it, and I've pushed
pretty hard internally at Bloomberg to

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make sure our coverage reflects this, EV
sales aren't in retreat.

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Sales growth is declining.

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And that's an important distinction
because...

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Before EVs came around, it was, well, the
auto industry sells 110 million, roughly,

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vehicles a year globally.

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And that's why they're not very good
stocks on Wall Street, because there's no

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growth there, right?

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It's not like AI or something that's new,
and there's going to be a bunch of revenue

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growth unless you steal it from somebody
else.

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And that's still true, but with EVs, EV
sales are growing rapidly globally.

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And it has slowed down for a variety of
reasons that we'll talk about.

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But...

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It's not in retreat.

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It's not like suddenly nobody wants them.

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I think sometimes media coverage as a
whole can get bipolar on something.

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You know, everything's great until we
decide it's not, and then we hate it.

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Um, this is, you know, there's some nuance
here and the nuance is it's, you know,

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it's still growing.

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It's just, we're, we're hitting this flat
part of a classic technology S curve.

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I think so.

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And you do see that reported.

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It's.

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It's just, it sort of gotten this
narrative kind of took on a life of its

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own that nobody wants an electric vehicle
anymore.

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For sure.

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And I think you're totally right.

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I do.

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Unfortunately see why it's probably taken
off more.

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Just it is kind of chasing clicks and the
narrative sounds more interesting and gets

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people to kind of tune into it.

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But I agree with you there.

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There's a challenge I think just with the
automotive industry in general, with

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interest rates and many other things kind
of going on right now that makes just new

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car sales in general harder.

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Are there any trends in particular that
you think are the biggest headwinds or

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things that you don't think are getting
enough coverage around that?

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It's something that I've said this on
Bloomberg TV a couple of times, actually

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several times, and that's not shameless
self-promotion, but I think when people

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talk about EVs and whether or not
consumers want them, and by consumers we

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generally at this point in history mean
people who aren't luxury buyers, who

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aren't early adopters for technology.

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Do they want them or not?

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EVs get a lot of consideration.

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I think they've captured the imagination
of a lot of people.

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The challenge now, and this is the
subtlety I don't think always gets picked

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up, is first of all people are happy with
their gasoline powered cars.

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It's not like they're walking around
kicking empty cans and grousing about

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those vehicles.

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So it's the industry's job to dislodge
them from that.

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But how do you do that?

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Well, if you really think about it,
there's not a lot of variety out there.

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compared to gasoline vehicles.

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In the US market, there's one vehicle, now
that the Chevy Bolt has discontinued

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temporarily, that's less than $40,000.

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That's a Nissan Leaf.

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And a Nissan Leaf is a compact hatchback.

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Americans hate compact hatchbacks.

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They've never bought them in big numbers.

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And it gets about, I think, 210 miles of
range might be the max on it.

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So, you know, that's not a great
proposition.

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for people, for most American consumers,
but it's the only vehicle under 40,000

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right now.

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Now that's not counting tax credits.

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I think you can get a Model 3 now, certain
configurations with the tax credits under

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that, but they're still pretty expensive
is the point.

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And there isn't nearly the variety that
you have with gasoline-powered vehicles

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where you can get anything from a compact
on up to a Hummer.

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You can get a Hummer electric actually,
but.

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Right, right.

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There's just more variety, more variety,
under $40,000.

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So, I remember having, here's my analogy,
conversations back in the early 2000s when

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Nissan and Toyota came out with full-size
pickup trucks.

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I was writing for Business Week.

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My editor said, well, here it is.

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This is the end of Detroit because now the
Japanese are taking their last stronghold.

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And they said, they took...

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the sedan and compact market away from the
big three, why wouldn't they also take

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pickups?

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And I said, you know, because of a variety
of reasons, the quality of those family

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sedans and compacts made by the Detroit
companies were truly terrible.

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And those consumers were really angry and
they were happy to leave.

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They actually left with two middle fingers
in the air for the most part.

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But the people who bought pickup trucks,
those trucks were made pretty well and

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those people loved them.

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It's not going to be that easy for the
Japanese to just steal those buyers.

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So what does that mean for the EV market?

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You have pretty happy buyers.

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I think when people drive EVs, they
realize they're faster, smoother, quieter,

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and there's a lot about them that's really
cool.

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But that's the industry's job is to tell
them why they should leave their regular

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cars right now.

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And, but they are happy with them.

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So for the same reason, you know, that...

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then Dodge, now Ram, Chevy, and Ford
didn't lose the pickup market.

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The gasoline-powered vehicle market's not
going to just surrender itself so easily.

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Consumers, they like what they like.

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I think a lot of people will come around.

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It's going to take longer than the
industry thought.

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And I'm kind of curious since you are
based in Detroit, are there, what do you

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think is kind of the perspective and what
you hear being kind of in the hub of

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Detroit versus maybe the more common
narrative or maybe misperceptions people

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have about how electric vehicles are doing
or that transition to them across the

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country.

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Yeah, you're hearing more skepticism from
inside the companies.

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And honestly, that was kind of always
there.

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There were a lot of engineers and people
working in the companies who would see

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these big plans from Ford and GM, big
investments and wonder, okay, is this

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really that smart, is that market going to
be there?

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And.

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You're hearing more of it now because
you've seen investment reigned in, you've

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seen vehicle plans delayed, and you've
seen sales, not just from these companies,

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00:11:52,929 --> 00:11:54,090
but from others disappointed.

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You see Tesla discounting massively over
the past year.

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So, you know, there is, there was already
some skepticism.

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Because people don't necessarily love
change, especially within their companies.

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Right.

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And so you,

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You have Mary Bar or Jim Farley coming in
saying, we're going to invest all this

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money.

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And in Ford's case, we're going to split
the company in two.

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And the people in the new co are the cool
kids and the people in the old co are in

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00:12:23,507 --> 00:12:27,789
this, you know, maybe a dinosaur of a
company.

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00:12:27,849 --> 00:12:31,131
And it turns out that, you know, the
dinosaur is going to live longer and new

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00:12:31,131 --> 00:12:35,333
co doesn't, you know, is getting defunded
in some ways.

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00:12:35,834 --> 00:12:39,695
And so there's probably an, I told you so
too, happening from people.

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00:12:39,756 --> 00:12:40,936
It's, you know,

229
00:12:42,461 --> 00:12:45,363
So I think what's happening in the EV
market, the slowdown, and also the

230
00:12:45,363 --> 00:12:48,625
slowdown in investment, which by the way
drives a lot of the narrative we were

231
00:12:48,625 --> 00:12:53,528
talking about earlier, that has some
skeptics saying, I told you so.

232
00:12:54,387 --> 00:12:58,408
You know, it's kind of funny you mentioned
the Ford blue and Ford, uh, model E

233
00:12:58,408 --> 00:13:03,629
program because that got so much attention
when it was first kind of announced and

234
00:13:03,629 --> 00:13:09,010
obviously when the market and kind of the
Evie, uh, momentum was much higher.

235
00:13:09,271 --> 00:13:14,132
And now it seems like we don't really hear
too much about the delineation of those

236
00:13:14,132 --> 00:13:19,694
programs unless it's maybe some sort of
like quarterly report or kind of a smaller

237
00:13:19,694 --> 00:13:21,614
news story related to it.

238
00:13:21,834 --> 00:13:23,271
Do you think that

239
00:13:23,271 --> 00:13:27,074
Or I guess one, I'd be curious if you've
been hearing any more of, uh, from kind of

240
00:13:27,074 --> 00:13:31,658
the inside of people that have seen that
firsthand and how that actual, uh,

241
00:13:31,658 --> 00:13:34,260
execution of that business model has gone.

242
00:13:34,480 --> 00:13:40,125
And do you think it's more kind of taken a
backseat just for the financials or do you

243
00:13:40,125 --> 00:13:44,269
have any sense of how that, how successful
that program has been to kind of delineate

244
00:13:44,269 --> 00:13:46,850
into two countries, uh, two companies at
Ford.

245
00:13:47,825 --> 00:13:49,165
Um, I'm not sure.

246
00:13:49,165 --> 00:13:54,507
I, you know, I was, when they did it,
there was a lot of pressure on GM to do

247
00:13:54,507 --> 00:13:59,589
the same thing and GM had said basically
that they had kind of already done it.

248
00:13:59,989 --> 00:14:02,050
It just, it wasn't as aggressive.

249
00:14:02,050 --> 00:14:06,512
They, they, because it's still reported to
the same top executives.

250
00:14:07,032 --> 00:14:07,672
Um,

251
00:14:07,729 --> 00:14:11,091
And actually, you mentioned John McElroy
earlier, John and I had this debate at one

252
00:14:11,091 --> 00:14:11,331
point.

253
00:14:11,331 --> 00:14:14,093
Like John thinks that any company, or at
the time he did, I don't know what he

254
00:14:14,093 --> 00:14:17,555
thinks now because a lot of these things
are going in reverse.

255
00:14:18,376 --> 00:14:21,878
He said, any company that has, doesn't
have its own separate EV company run by

256
00:14:21,878 --> 00:14:23,839
somebody from Silicon Valley, like they're
going to die.

257
00:14:23,839 --> 00:14:27,261
And I said, wait a second, you're talking
about word charts here.

258
00:14:27,261 --> 00:14:31,744
You know, like at the end of the day, Jim
Farley runs Ford.

259
00:14:32,193 --> 00:14:37,798
And he makes the decisions for the Blue
Oval side of the company and the EV side

260
00:14:37,798 --> 00:14:38,939
of the company.

261
00:14:38,939 --> 00:14:39,920
And that's that.

262
00:14:39,920 --> 00:14:47,367
And there are people working on just EVs
at General Motors and Stellantis.

263
00:14:47,367 --> 00:14:50,329
At the end of the day, they report to the
same CEO.

264
00:14:50,549 --> 00:14:53,792
And I can guarantee you when...

265
00:14:54,033 --> 00:14:57,535
Ford decided to reduce investment by 12
billion.

266
00:14:57,535 --> 00:15:00,997
That wasn't decided by one person on the
EV side of the company.

267
00:15:00,997 --> 00:15:03,918
It was Farley, it was the board of
directors, just the same way it would be

268
00:15:03,918 --> 00:15:05,979
if they never split the company like that.

269
00:15:06,020 --> 00:15:12,824
And when Mary Bar decided to delay the
Orient Township pickup truck plant, that

270
00:15:12,824 --> 00:15:14,144
wasn't decided by...

271
00:15:14,925 --> 00:15:20,048
the executive who runs the EV truck group
that builds vehicles in Hamtramck that was

272
00:15:20,048 --> 00:15:23,469
decided by her leadership team and the
board.

273
00:15:25,851 --> 00:15:30,133
Does it help them getting people to
develop technologies?

274
00:15:31,254 --> 00:15:32,634
Short answer is I don't know.

275
00:15:32,634 --> 00:15:37,437
I've always wondered about it because
there's a lot about both vehicles you

276
00:15:37,437 --> 00:15:42,480
still need like basic guts of the car, the
interior, the design, the chassis, all

277
00:15:42,480 --> 00:15:43,760
that kind of stuff.

278
00:15:44,525 --> 00:15:46,948
where you're having the same people
engineered, you still have to work with

279
00:15:46,948 --> 00:15:47,608
them.

280
00:15:47,869 --> 00:15:55,197
So you know, one of the things
historically that got General Motors into

281
00:15:55,197 --> 00:15:59,401
trouble was they used to have all these,
all the vehicle divisions had their own

282
00:15:59,401 --> 00:16:00,682
engineering groups.

283
00:16:00,763 --> 00:16:02,624
This goes back many decades.

284
00:16:03,045 --> 00:16:05,888
And for efficiency's sake, they put it all
together.

285
00:16:06,761 --> 00:16:11,082
And a long retired GM executive told me
that actually caused a lot of problems

286
00:16:11,082 --> 00:16:17,243
internally because, you know, it used to
be, you know, you're, you're a power train

287
00:16:17,243 --> 00:16:22,805
engineer and the transmission guy for
Buick sat next to you or worked on your

288
00:16:22,805 --> 00:16:23,185
floor.

289
00:16:23,185 --> 00:16:26,446
And if there was an issue, you'd go over
there and talk to him.

290
00:16:26,546 --> 00:16:30,867
And then once they reorganized everything,
you know, the, the expertise went hither

291
00:16:30,867 --> 00:16:33,128
and yon and it really caused a lot of
problems.

292
00:16:33,128 --> 00:16:35,428
I'm not saying that's that happened at
Ford, but.

293
00:16:35,557 --> 00:16:36,405
Right.

294
00:16:37,362 --> 00:16:40,303
know, it's just, you know, these things
can work or they can not work.

295
00:16:40,524 --> 00:16:44,546
And, you know, I never saw that as a
deciding factor.

296
00:16:44,546 --> 00:16:47,628
I mean, the bottom line is like these
companies have to figure out how to make

297
00:16:47,628 --> 00:16:53,552
batteries and the software that makes all
this stuff work and get the vehicles

298
00:16:53,552 --> 00:16:54,452
produced.

299
00:16:55,315 --> 00:16:56,756
Well, and that is what's kind of
interesting.

300
00:16:56,756 --> 00:17:00,378
I mean, in that example, especially, I
mean, that has been one, one of the things

301
00:17:00,378 --> 00:17:04,881
that the startups and even some of the
Chinese companies, when asked about how

302
00:17:04,881 --> 00:17:09,184
they run their business or what has kind
of led to the flatness of their

303
00:17:09,184 --> 00:17:12,987
organization and their speed is actually
kind of that old model where they will

304
00:17:12,987 --> 00:17:17,710
have the engineers and the designers and
all of them close to where the cars are

305
00:17:17,710 --> 00:17:19,471
actually being manufactured.

306
00:17:19,531 --> 00:17:24,434
So it's, it is kind of interesting to see
that is that traditionally was.

307
00:17:24,603 --> 00:17:29,466
And it seems to still be a very cost
effective and, uh, time efficient way to

308
00:17:29,466 --> 00:17:30,587
move vehicles forward.

309
00:17:30,587 --> 00:17:37,111
And I, I'm kind of curious with, has there
been talk of trying to move back to that

310
00:17:37,111 --> 00:17:40,073
style of manufacturing more with some of
these companies?

311
00:17:40,073 --> 00:17:41,394
I know there have been talk.

312
00:17:41,394 --> 00:17:46,058
They were going to do that with, uh,
speaking of the Ford, uh, model E and blue

313
00:17:46,058 --> 00:17:46,618
programs.

314
00:17:46,618 --> 00:17:50,161
But I'm, I'm just kind of curious if that
actually ever materialized or you've seen

315
00:17:50,161 --> 00:17:52,854
that even with GM or it's more just from a

316
00:17:52,854 --> 00:17:54,239
in house basically.

317
00:17:54,567 --> 00:17:59,029
Uh, bring more stuff in house and just
also bringing, um, I mean, I can think of

318
00:17:59,029 --> 00:18:02,812
a couple of examples for Ford that they've
kind of looked at, like, I mean, the Ford

319
00:18:02,812 --> 00:18:06,834
GT and some of these where they, they take
a very small, dedicated, uh, group of

320
00:18:06,834 --> 00:18:10,777
people and just throw them at the problem
and let them handle it versus kind of some

321
00:18:10,777 --> 00:18:14,319
of the larger teams that we've
traditionally seen from like the big three

322
00:18:14,319 --> 00:18:18,862
for the last couple of decades, are you
seeing any or hearing much about that

323
00:18:18,862 --> 00:18:19,822
across?

324
00:18:19,847 --> 00:18:23,070
being in Detroit from like the traditional
automakers about going more to these

325
00:18:23,070 --> 00:18:29,338
smaller kind of focus teams and almost
more like a software style of product

326
00:18:29,338 --> 00:18:30,278
management.

327
00:18:30,817 --> 00:18:33,719
You know, they definitely did with, like,
take the Electric Hummer.

328
00:18:33,719 --> 00:18:37,822
Um, they, they did that program in, I
remember writing about this.

329
00:18:37,822 --> 00:18:41,024
It was like, you know, typically these
programs were like four years and they did

330
00:18:41,024 --> 00:18:44,166
it in like 23 or 27 months, something like
that.

331
00:18:44,166 --> 00:18:45,247
It actually might have been 27.

332
00:18:45,247 --> 00:18:46,928
It was a little more than two years.

333
00:18:46,969 --> 00:18:50,791
And they had a very small team and they
used to meet, you know, all together in,

334
00:18:50,791 --> 00:18:52,332
in like one.

335
00:18:52,537 --> 00:18:55,938
one building in GM instead of like, you
know, different departments all over the

336
00:18:55,938 --> 00:18:56,938
company.

337
00:18:57,198 --> 00:19:01,439
And the guy ran it was guy named Josh
Tavill, who's sort of co-head of product

338
00:19:01,439 --> 00:19:03,000
development at GM now.

339
00:19:03,100 --> 00:19:03,960
And he, I did a story on this.

340
00:19:03,960 --> 00:19:08,541
He, he borrowed from Amazon though, like
the, I think it was the one, it was the,

341
00:19:08,541 --> 00:19:12,863
the pizza rule where if you had a meeting,
you know, you should never have more

342
00:19:12,863 --> 00:19:15,904
people, like one pizza should feed
everybody in the meeting.

343
00:19:15,904 --> 00:19:18,724
Otherwise you've got a bunch of people who
probably don't need to be there.

344
00:19:18,897 --> 00:19:20,618
And then he had time limits on meetings.

345
00:19:20,618 --> 00:19:24,501
Like this is how long we're going to spend
meeting to like get decisions made.

346
00:19:24,501 --> 00:19:28,585
But it was a very small group and that's
how they got that vehicle done quickly.

347
00:19:28,585 --> 00:19:29,566
Now they've had problems with it.

348
00:19:29,566 --> 00:19:30,387
I don't know if it's related.

349
00:19:30,387 --> 00:19:32,488
I don't think it's related to the size of
the management teams.

350
00:19:32,488 --> 00:19:38,574
I think it's just switching from making
vehicles with engines and transmissions to

351
00:19:38,574 --> 00:19:39,595
EVs pretty hard.

352
00:19:39,595 --> 00:19:41,403
The whole industry is having a tough time
with this.

353
00:19:41,403 --> 00:19:44,785
Well, and that is something I do kind of
want to talk to you about because for the

354
00:19:44,785 --> 00:19:48,108
longest time, I felt like the traditional
big three is like, oh, Tesla is doing

355
00:19:48,108 --> 00:19:48,669
their little thing.

356
00:19:48,669 --> 00:19:50,510
These startups are doing their little
thing.

357
00:19:50,510 --> 00:19:53,293
When we want to make electric vehicles,
we're going to be able to make electric

358
00:19:53,293 --> 00:19:55,694
vehicles, we made cars for decades.

359
00:19:55,955 --> 00:19:58,477
And a lot of people were saying that.

360
00:19:58,477 --> 00:20:02,080
Probably, but it is a different beast
altogether.

361
00:20:02,360 --> 00:20:06,624
And now we are kind of seeing whether
that's through, uh, I think for more, for

362
00:20:06,624 --> 00:20:09,066
forward, they've actually been pretty
effective, but it's been the cost

363
00:20:09,066 --> 00:20:10,166
challenges.

364
00:20:10,783 --> 00:20:15,447
Trying to get those and supply chain But
then you look at GM and it does seem to be

365
00:20:15,447 --> 00:20:20,391
that there have been some pretty big
issues just across the spectrum of

366
00:20:20,391 --> 00:20:25,395
Electric vehicle development and actually
the manufacturing What do you think?

367
00:20:26,316 --> 00:20:26,376
I?

368
00:20:26,376 --> 00:20:29,138
Mean, I think this could be its own
podcast episode alone.

369
00:20:29,138 --> 00:20:33,061
But what do you think have been kind of
the big takeaways from this?

370
00:20:33,302 --> 00:20:38,546
Experience or I don't know if hubris is
the right word but kind of the experience

371
00:20:38,546 --> 00:20:39,206
that

372
00:20:39,292 --> 00:20:43,066
Maybe making electric vehicles wasn't as
easy as they thought it would be and how

373
00:20:43,066 --> 00:20:45,734
that might be affecting their
decision-making

374
00:20:46,713 --> 00:20:48,154
I think it's true across the board.

375
00:20:48,154 --> 00:20:52,158
So, you know, take GM, they've had this
issue assembling battery packs, right?

376
00:20:52,158 --> 00:20:55,542
The Ultium pack, the Ultium pack, by the
way, it was never like that.

377
00:20:55,542 --> 00:20:58,685
There's no secret sauce in terms of
battery chemistry or form factor or

378
00:20:58,685 --> 00:20:59,886
anything like that.

379
00:20:59,946 --> 00:21:02,789
What Ultium is, is it's an industrial
strategy.

380
00:21:02,889 --> 00:21:07,034
It's, you know, you're taking your cells
and you're putting X number of them into a

381
00:21:07,034 --> 00:21:10,356
box that's a module and X number of
modules into a pack.

382
00:21:10,365 --> 00:21:13,625
and the number of modules that go into
that pack, that's your Lego set.

383
00:21:13,625 --> 00:21:18,127
So you can make everything from a Chevy
Bolt on up to a Hummer, right?

384
00:21:18,127 --> 00:21:19,667
Or a Cadillac Escalade.

385
00:21:19,667 --> 00:21:24,308
And it's basically the same basis of the
vehicle, the same platform.

386
00:21:24,688 --> 00:21:32,350
And, so it's almost a manufacturing
strategy.

387
00:21:32,371 --> 00:21:34,151
And that's the part where they've fallen
down, right?

388
00:21:34,151 --> 00:21:36,512
Like the Ultium cells plant is doing fine.

389
00:21:36,512 --> 00:21:39,472
It's getting those, the battery packs
made.

390
00:21:39,645 --> 00:21:43,307
And then they've shown some progress
there, but then they've had all these

391
00:21:43,307 --> 00:21:46,528
software issues that have grounded the
Chevy Blazer EV.

392
00:21:48,170 --> 00:21:49,090
They're not alone, right?

393
00:21:49,090 --> 00:21:51,572
Like Toyota had wheels falling off of the
BZ4X.

394
00:21:51,572 --> 00:21:55,714
And that's saying something like
Volkswagen's or Volkswagen.

395
00:21:55,934 --> 00:22:00,217
Toyota is one of the best, if not the best
manufacturer in the industry.

396
00:22:00,217 --> 00:22:01,858
And they're having those issues.

397
00:22:02,318 --> 00:22:06,040
The Germans Volkswagen and I think
Porsche.

398
00:22:06,057 --> 00:22:09,464
They both had issues with software, kind
of like GM is.

399
00:22:09,464 --> 00:22:13,572
I think maybe different software problems,
but software problems nonetheless.

400
00:22:14,055 --> 00:22:14,440
So.

401
00:22:14,440 --> 00:22:18,663
Well, and I think it's kind of interesting
to mention that now, uh, with kind of the

402
00:22:18,663 --> 00:22:22,525
ability of hindsight, it almost seems like
the Germans knew, especially the VW group,

403
00:22:22,525 --> 00:22:23,966
they knew they had problems.

404
00:22:23,966 --> 00:22:26,027
So they just delayed all their vehicles.

405
00:22:26,028 --> 00:22:28,770
Whereas it seems like GM continue to just
move forward with these.

406
00:22:28,770 --> 00:22:32,492
And now that they're out or supposed to be
out, they're really realizing how many of

407
00:22:32,492 --> 00:22:34,173
these software issues they have.

408
00:22:34,173 --> 00:22:36,314
But I, I'm sorry, what were you going to
say there?

409
00:22:36,750 --> 00:22:42,453
Well, you know, they're I think in the
case of GM and maybe a lot of these

410
00:22:42,453 --> 00:22:44,174
companies and Ford too, right?

411
00:22:44,174 --> 00:22:48,016
Like they just recently stopped F-150
production because of quality issues.

412
00:22:48,517 --> 00:22:52,599
They all they were so far behind Tesla and
they were in the Chinese for that matter.

413
00:22:52,599 --> 00:22:54,940
And they were in such a rush to catch up.

414
00:22:54,940 --> 00:23:00,824
And they had to be that they probably will
definitely get off more than they can

415
00:23:00,824 --> 00:23:01,544
chew.

416
00:23:03,957 --> 00:23:07,819
And they might deny that, but they've all
had production quality, software issues,

417
00:23:07,819 --> 00:23:13,202
you name it, and have had to stop
production, ground vehicles for some

418
00:23:13,202 --> 00:23:15,362
period of time because of this.

419
00:23:16,223 --> 00:23:20,445
So yeah, I think the software side of it
was probably underestimated.

420
00:23:20,445 --> 00:23:23,727
They might not have had the right talent
in place to do it.

421
00:23:23,847 --> 00:23:26,368
And same with battery, you know, the US...

422
00:23:27,113 --> 00:23:29,335
battery infrastructure, battery industry.

423
00:23:29,335 --> 00:23:31,398
It's like there really isn't much of one,
right?

424
00:23:31,398 --> 00:23:34,502
We're relying on Korean and Chinese
partners for the technology and the

425
00:23:34,502 --> 00:23:35,183
know-how.

426
00:23:35,183 --> 00:23:38,768
We gave it all away and now we're rapidly
trying to catch up.

427
00:23:38,768 --> 00:23:41,712
And there's a lot of software that goes
into that too, the battery management

428
00:23:41,712 --> 00:23:42,612
system.

429
00:23:43,054 --> 00:23:45,636
And, you know, do we have the expertise
there?

430
00:23:46,113 --> 00:23:47,994
I don't think we do, I think we can get
it.

431
00:23:47,994 --> 00:23:51,197
I mean Silicon Valley is extremely
adaptable and a lot of people great at

432
00:23:51,197 --> 00:23:57,383
writing code and I think that'll come but
Tesla has it, right?

433
00:23:57,383 --> 00:24:03,928
So we can, as a nation, our companies can
get there but it's really competitive to

434
00:24:03,928 --> 00:24:06,070
get the talent and everyone's in a hurry.

435
00:24:06,070 --> 00:24:12,496
In a weird way, the fact that adoption and
EV sales, the growth has slowed down a

436
00:24:12,496 --> 00:24:13,176
bit.

437
00:24:14,373 --> 00:24:19,117
It kind of gives some of the established
old line car companies maybe a bit of a

438
00:24:19,117 --> 00:24:24,121
time out to figure out the industrial and
the software and the technology side of

439
00:24:24,121 --> 00:24:26,483
this before the market really takes off.

440
00:24:26,483 --> 00:24:31,187
Because look, if the growth rates kept
going at the way they were going, these

441
00:24:31,187 --> 00:24:34,210
guys would be in serious trouble because
they wouldn't have the vehicles and they

442
00:24:34,210 --> 00:24:36,051
wouldn't have the production to meet it.

443
00:24:36,372 --> 00:24:36,546
So

444
00:24:36,546 --> 00:24:37,331
sure.

445
00:24:37,949 --> 00:24:40,931
In a way, they should be thankful that
this is slow down, even though it's making

446
00:24:40,931 --> 00:24:46,135
their lives difficult because you know, if
you're You're Mary Bar and Jim Farley and

447
00:24:46,135 --> 00:24:51,118
you've delayed factory plans or you've
reigned in investment for EVs You know now

448
00:24:51,118 --> 00:24:55,041
your decision is do you have to do that
more based on what the market does or if

449
00:24:55,041 --> 00:24:58,503
not Like when do you know hit the
accelerator again?

450
00:24:58,923 --> 00:25:00,344
These are all tough decisions for them.

451
00:25:00,344 --> 00:25:03,626
Now they make more money than you and I do
so I have no sympathy for them They have

452
00:25:03,626 --> 00:25:04,507
to make them.

453
00:25:04,847 --> 00:25:06,368
That's the job, right?

454
00:25:07,069 --> 00:25:12,774
But, you know, that's, it's all going to
be pretty tough on them, but they do have

455
00:25:12,774 --> 00:25:15,996
this, maybe a bit of a market reprieve to
figure it out.

456
00:25:16,155 --> 00:25:18,696
Well, and that's interesting you bring
that up because that's something I've

457
00:25:18,696 --> 00:25:23,258
talked to with a few people about and my
take on it, and I'd be curious if anyone's

458
00:25:23,258 --> 00:25:28,240
kind of shared this is what we're seeing
is yes, the, some of the, I think the

459
00:25:28,240 --> 00:25:31,941
demand for new cars in general is often,
but a lot of it is that focus on electric

460
00:25:31,941 --> 00:25:37,344
vehicles and the domestic three, two and a
half, whatever you want to call them are

461
00:25:37,344 --> 00:25:41,626
looking at moving kind of back to hybrids,
plug in hybrids.

462
00:25:41,806 --> 00:25:43,526
So you're, there is a

463
00:25:43,787 --> 00:25:47,208
But my question, what I'm kind of curious
and would like to hear your thoughts on is

464
00:25:47,429 --> 00:25:51,051
do you think it's a reprieve in the short
term?

465
00:25:51,171 --> 00:25:55,814
Because by going back to what they're kind
of comfortable with and know more about,

466
00:25:55,854 --> 00:25:59,216
to me it just seems like it gives Tesla
and some of the other startups, but

467
00:25:59,216 --> 00:26:03,238
especially the Chinese the ability to kind
of just keep leaning into what they're

468
00:26:03,238 --> 00:26:03,839
doing.

469
00:26:03,839 --> 00:26:09,482
So once that moment or that interest
catches up or we kind of see some kind of

470
00:26:09,482 --> 00:26:10,782
growth return,

471
00:26:11,343 --> 00:26:14,944
they're going to be actually, I think in
an even better position, supply chain

472
00:26:14,944 --> 00:26:20,987
wise, technology wise, scale wise, uh, to
be ready to kind of just kind of turn up

473
00:26:20,987 --> 00:26:25,670
the factories versus being, if you're
making just plug in hybrids and now you're

474
00:26:25,670 --> 00:26:29,011
seeing more of a demand to go to full
electrics or other things that you have to

475
00:26:29,011 --> 00:26:31,672
change a lot more, at least that's my
opinion.

476
00:26:31,773 --> 00:26:35,074
And I'm kind of curious if you've heard
any other kind of people talking about

477
00:26:35,074 --> 00:26:36,134
that locally.

478
00:26:36,853 --> 00:26:42,776
Um, well, it's, so it's not like it's not
either or like, it's not like, with the

479
00:26:42,776 --> 00:26:43,736
exception of Toyota, right?

480
00:26:43,736 --> 00:26:47,559
They're only making a couple of these, but
they do have more coming and they're heavy

481
00:26:47,559 --> 00:26:48,479
on plug-in hybrids.

482
00:26:48,479 --> 00:26:53,522
I'll tell you, like, here's what I know,
at least with the US companies and to a

483
00:26:53,522 --> 00:26:55,223
degree with the European companies.

484
00:26:55,703 --> 00:26:59,765
They really don't want to do plug-in
hybrids in big numbers.

485
00:26:59,825 --> 00:27:03,848
I think they want to do just enough in
some key segments to meet the demand

486
00:27:03,848 --> 00:27:05,488
that's there and to meet...

487
00:27:05,493 --> 00:27:09,594
fuel economy and greenhouse gas
regulations that are going to get tougher.

488
00:27:09,754 --> 00:27:12,094
Because Toyota is great at making those.

489
00:27:12,094 --> 00:27:13,915
The Koreans are pretty good too.

490
00:27:14,255 --> 00:27:18,716
But they are expensive vehicles to make
because you still do have this electric

491
00:27:18,716 --> 00:27:22,777
system on board and you still do have
gasoline and exhaust and all of this stuff

492
00:27:22,777 --> 00:27:23,257
on board.

493
00:27:23,257 --> 00:27:28,819
So it's not a great and long-term business
model.

494
00:27:28,859 --> 00:27:30,999
They're doing it because they feel they
have to.

495
00:27:31,340 --> 00:27:34,200
And so I think...

496
00:27:35,369 --> 00:27:39,050
They're all still going to lean into the
development of their EVs.

497
00:27:41,470 --> 00:27:47,992
Just a little less so, but the less isn't
like emphasis on developing their supply

498
00:27:47,992 --> 00:27:53,074
chains and developing the software talent
they need and the battery operations.

499
00:27:53,174 --> 00:27:57,055
The less is just like how much of it
they're doing all at once.

500
00:27:57,155 --> 00:28:01,456
Now, the distance, so they're still going
to be working on developing all of this

501
00:28:01,456 --> 00:28:02,276
stuff.

502
00:28:02,549 --> 00:28:07,591
They will be, I think they're going to be
developing less volume because they're

503
00:28:07,591 --> 00:28:09,091
selling less volume, right?

504
00:28:09,091 --> 00:28:12,333
None of them do well in China where the
real EV volume is, so they're not going to

505
00:28:12,333 --> 00:28:13,353
get it there.

506
00:28:13,593 --> 00:28:20,796
And Ford does okay in Europe, GM is barely
there, so they're not going to get it

507
00:28:20,796 --> 00:28:21,297
there.

508
00:28:21,297 --> 00:28:25,038
So they're going to have to rely on
volumes in the US market to get it.

509
00:28:26,379 --> 00:28:29,540
You know, GM in China is going to be
interesting because they're struggling

510
00:28:29,540 --> 00:28:30,360
over there.

511
00:28:30,536 --> 00:28:31,246
Yeah.

512
00:28:31,485 --> 00:28:35,507
they do have this partnership with Wuling
and Shanghai Automotive.

513
00:28:35,667 --> 00:28:39,810
SAIC was their long-term partners, but
they make small, really cheap EVs.

514
00:28:40,210 --> 00:28:44,032
The Honglong Mini has been a really big
success for GM.

515
00:28:44,192 --> 00:28:50,296
But that's where GM can get some knowledge
on how to make cheap EVs.

516
00:28:51,825 --> 00:28:56,808
in that market without having to like sell
them under the Buick brand or, or develop

517
00:28:56,808 --> 00:28:58,249
their own operations.

518
00:28:58,329 --> 00:29:00,590
So that, that helps them there.

519
00:29:00,651 --> 00:29:03,753
But, you know, so can they replicate some
of the learnings over there?

520
00:29:03,753 --> 00:29:08,436
Like, I think the biggest risk here is,
and this is what the IRA, you know,

521
00:29:08,436 --> 00:29:12,539
Biden's Inflation Reduction Act is all
about is telling everybody, look, you can

522
00:29:12,539 --> 00:29:17,383
get all these great incentives to build
and for your customers to buy EVs, but you

523
00:29:17,383 --> 00:29:18,763
have to do it here.

524
00:29:18,784 --> 00:29:20,224
And it's because like,

525
00:29:20,925 --> 00:29:26,388
The US industry sort of writ large needs
to develop an EV industry.

526
00:29:26,629 --> 00:29:30,351
And Tesla has, but nobody else has.

527
00:29:30,472 --> 00:29:34,154
And so that's to your point.

528
00:29:34,154 --> 00:29:38,097
I think that that's where they can fall
behind specifically the Chinese because

529
00:29:38,537 --> 00:29:40,539
the volume there is going to keep growing.

530
00:29:40,539 --> 00:29:43,881
And here it's going to fit and starts.

531
00:29:44,101 --> 00:29:48,404
And scale is one of the things in the auto
industry and scale is so important.

532
00:29:49,055 --> 00:29:52,377
Well, this, uh, this can also goes back to
the conversation with John McRoy, where he

533
00:29:52,377 --> 00:29:56,081
was saying, I mean, the only reason Tesla
got successful was it hit like 80,000 of

534
00:29:56,081 --> 00:29:58,763
the model three, and then it kind of takes
off.

535
00:29:58,763 --> 00:30:02,366
If you don't have those numbers, then
you're just burning money for a long, long

536
00:30:02,366 --> 00:30:03,267
time.

537
00:30:03,528 --> 00:30:05,389
And I think.

538
00:30:05,569 --> 00:30:06,530
Yeah.

539
00:30:06,530 --> 00:30:07,290
Right.

540
00:30:07,462 --> 00:30:13,565
you know, they're making, I mean, Rivian's
making 50, 60,000 a year last year and

541
00:30:13,565 --> 00:30:15,045
forecast for this year.

542
00:30:15,526 --> 00:30:20,428
Um, and they lose a lot of money and they
burn a lot of cash and Lucid does even

543
00:30:20,428 --> 00:30:21,268
fewer vehicles.

544
00:30:21,268 --> 00:30:24,589
But you know, those business models don't
work.

545
00:30:24,630 --> 00:30:29,132
Uh, those companies, I, you know, they're
probably going to have to raise money and

546
00:30:29,132 --> 00:30:31,632
find investors who are willing to kind of.

547
00:30:31,721 --> 00:30:34,661
towering losses for a long time until they
can get real volume.

548
00:30:34,661 --> 00:30:36,522
Chinese are well past all of that stuff.

549
00:30:36,522 --> 00:30:38,462
Tesla's well past all of that stuff.

550
00:30:38,462 --> 00:30:42,103
Ford and GM still aren't close to that and
they're a lot closer than those startups.

551
00:30:42,684 --> 00:30:44,724
So we kind of have three auto industries
right now.

552
00:30:44,724 --> 00:30:49,605
We've got Tesla, BYD, and these Chinese
companies that have a lot of volume.

553
00:30:49,745 --> 00:30:55,407
Then you've got Ford, GM, and the Germans
and the Japanese who don't have a lot of

554
00:30:55,407 --> 00:30:57,308
volume and stuff to go up that curve.

555
00:30:57,308 --> 00:31:01,248
Then you have these startups that are even
further behind.

556
00:31:02,358 --> 00:31:05,663
and probably will be for a while because
they don't have the distribution and the

557
00:31:05,663 --> 00:31:07,104
sales numbers to get there.

558
00:31:07,795 --> 00:31:12,557
Well, and they have a much worse market
and also much more competition than Tesla

559
00:31:12,557 --> 00:31:13,878
did during its growth phase.

560
00:31:13,878 --> 00:31:17,240
So even same with the Chinese, at least in
their market too.

561
00:31:17,240 --> 00:31:20,201
So it is kind of interesting.

562
00:31:20,241 --> 00:31:21,382
I'm a big fan of the Rivians.

563
00:31:21,382 --> 00:31:22,762
I think they're great looking vehicles.

564
00:31:22,762 --> 00:31:23,943
They're spendy.

565
00:31:24,083 --> 00:31:29,286
But yeah, but I even just saw a chart just
a couple of days ago that kind of blew my

566
00:31:29,286 --> 00:31:30,786
mind that Rivian.

567
00:31:31,343 --> 00:31:34,664
is actually in a worse financial position
than Tesla was kind of going through like

568
00:31:34,664 --> 00:31:36,425
the scale of model three and all this
stuff.

569
00:31:36,425 --> 00:31:40,267
So it was, I'm sure there'll be, I think
of the startups, they're probably in the

570
00:31:40,267 --> 00:31:41,568
best position.

571
00:31:41,868 --> 00:31:45,570
Um, having the Amazon backing of that
money behind it is something if you need

572
00:31:45,570 --> 00:31:49,332
to get more funds, isn't bad, but yeah,
it's, I mean, it's, it is a, uh,

573
00:31:49,652 --> 00:31:54,245
incredibly difficult time, I think for
everyone right now, uh, outside.

574
00:31:54,245 --> 00:31:58,387
up in an era when raising cash was easy,
right?

575
00:31:58,387 --> 00:32:01,269
Easy Wall Street money, their interest
rates were super low.

576
00:32:01,269 --> 00:32:03,430
He could borrow money for next to nothing.

577
00:32:03,570 --> 00:32:08,433
And Elon Musk is just, you know, a lot of
people hate him, but got to give the guy

578
00:32:08,433 --> 00:32:09,113
his due.

579
00:32:09,113 --> 00:32:11,815
He's, you know, great technologist.

580
00:32:11,815 --> 00:32:13,956
He's, and he's great at raising money.

581
00:32:14,116 --> 00:32:17,118
And, and he did it at a time when it was
pretty easy.

582
00:32:17,498 --> 00:32:20,119
Rivian and Lucid don't have that luxury
right now.

583
00:32:20,340 --> 00:32:21,760
Um, and.

584
00:32:22,087 --> 00:32:25,329
And the, and the Chinese kind of did too,
just by being in China, having the

585
00:32:25,329 --> 00:32:27,671
government backing back then for what they
were doing.

586
00:32:27,671 --> 00:32:30,253
So I, I completely agree with you in that
standpoint.

587
00:32:30,253 --> 00:32:34,977
I don't think that's something that gets
enough, um, kind of perspective is like,

588
00:32:34,977 --> 00:32:38,920
even when you overlay the graphs of these
startups and how they're doing compared to

589
00:32:38,920 --> 00:32:43,484
Tesla during its similar phase, it's just
a much different sales market, much

590
00:32:43,484 --> 00:32:46,306
different supply chain, much different
everything.

591
00:32:46,306 --> 00:32:50,910
Um, but let's, uh, we're in agreement on
pretty much all that.

592
00:32:50,910 --> 00:32:52,027
It sounds like so.

593
00:32:52,027 --> 00:32:56,891
Let's kind of finally jump over to your
book and really kind of go through what

594
00:32:56,891 --> 00:33:02,697
you're you've seen and discovered through
GM and the whole process it's gone for.

595
00:33:02,697 --> 00:33:04,659
So I, I haven't been able to finish the
book yet.

596
00:33:04,659 --> 00:33:05,260
I started reading it.

597
00:33:05,260 --> 00:33:06,180
I really enjoyed it.

598
00:33:06,180 --> 00:33:10,385
So it's really interesting, but I would
love to hear kind of, um, for those

599
00:33:10,385 --> 00:33:14,208
listening, what the book is about, what
got you started on it, and then we can

600
00:33:14,208 --> 00:33:16,890
kind of go through some of the topics and
the things you learned.

601
00:33:17,185 --> 00:33:17,945
Sure.

602
00:33:18,245 --> 00:33:21,729
It started with a cover story in
Businessweek, trying to remember, I think

603
00:33:21,729 --> 00:33:23,610
it was 2019 or 20.

604
00:33:23,610 --> 00:33:27,554
This is basically looking at what Mary
Barra had done with, it must have been

605
00:33:27,554 --> 00:33:30,556
2020 because it was after the 2019 strike.

606
00:33:31,657 --> 00:33:34,139
And she had...

607
00:33:35,941 --> 00:33:38,242
She had downsized this global footprint,
right?

608
00:33:38,242 --> 00:33:42,364
Like she closed down Europe, closed down
their operations in Russia, India,

609
00:33:42,364 --> 00:33:45,726
Southeast Asia, all these places GM lost
money.

610
00:33:45,786 --> 00:33:48,587
And the idea was they were spending
billions of dollars on new products there

611
00:33:48,587 --> 00:33:50,188
and losing money anyways.

612
00:33:50,188 --> 00:33:53,610
And they just weren't well positioned in
the market and it would take years to fix

613
00:33:53,610 --> 00:33:53,870
that.

614
00:33:53,870 --> 00:33:58,233
So her huge decision, and this is one of
the biggest retrenchments in corporate

615
00:33:58,233 --> 00:34:01,274
history, not just the US, but worldwide.

616
00:34:02,175 --> 00:34:05,896
She closed down all that stuff and took
all that money.

617
00:34:06,461 --> 00:34:11,022
and plow it into some of it into cruise
and getting into autonomy, but most of it

618
00:34:11,022 --> 00:34:14,063
into developing the ultium battery and all
of these vehicles.

619
00:34:14,303 --> 00:34:19,704
And by doing that, you know, there's an
old saying in baseball, you can't steal

620
00:34:19,704 --> 00:34:21,205
second and keep your foot on first.

621
00:34:21,205 --> 00:34:25,806
So she seeds all of those markets to
Toyota and Volkswagen and some others, but

622
00:34:25,806 --> 00:34:27,307
primarily Toyota and Volkswagen.

623
00:34:27,307 --> 00:34:31,468
Just says, look, you guys can have all of
those low margin sales in India.

624
00:34:31,488 --> 00:34:32,788
And you can have.

625
00:34:35,069 --> 00:34:39,693
you know, the mess that is Russia and you
can have the overheated market that is

626
00:34:39,693 --> 00:34:43,355
Europe and whatever is left in South
Africa and Southeast Asia, fine.

627
00:34:44,096 --> 00:34:47,098
We're going to sell vehicles in Brazil,
China, the US, and we're going to make a

628
00:34:47,098 --> 00:34:50,541
lot of money doing it, and then we're
going to call that money into EVs and

629
00:34:50,541 --> 00:34:52,522
become electric vehicle kings.

630
00:34:52,722 --> 00:34:56,345
Now, and she also restructured the US
business to make it more profitable.

631
00:34:56,345 --> 00:35:02,008
And so what that left us with is the GM of
today, which is a cash machine.

632
00:35:02,737 --> 00:35:04,397
They generate a lot of money.

633
00:35:04,798 --> 00:35:09,000
Um, but you know, on her way there, she
got in big fights with Donald Trump,

634
00:35:09,000 --> 00:35:09,180
right?

635
00:35:09,180 --> 00:35:14,103
There's a couple of chapters that there's
one chapter just about the war with Trump,

636
00:35:14,103 --> 00:35:17,925
but he sort of, you know, she'd be, Mary
Barr became one of Trump's favorite

637
00:35:17,925 --> 00:35:18,265
targets.

638
00:35:18,265 --> 00:35:22,988
Um, you know, she leaned up operations in
the U S which meant a war with the UAW,

639
00:35:22,988 --> 00:35:28,711
uh, which, you know, was really got hot in
2019, but reared its head again, uh, late

640
00:35:28,711 --> 00:35:30,492
last year with another strike.

641
00:35:30,673 --> 00:35:35,396
So, you know, you start bringing out
change and closing certain operations and,

642
00:35:35,436 --> 00:35:38,959
you know, presidents who promise people in
Ohio that their jobs are coming back get

643
00:35:38,959 --> 00:35:39,700
very angry.

644
00:35:39,700 --> 00:35:42,682
And the union gets very angry.

645
00:35:42,682 --> 00:35:46,966
So she had to fight all of them in order
to restructure this company.

646
00:35:47,146 --> 00:35:48,627
And then internally, there was pushback.

647
00:35:48,627 --> 00:35:51,950
You know, a lot of executives and
engineers were questioning.

648
00:35:51,950 --> 00:35:56,954
There's some, you know, inside meetings
with debates on that about how much they

649
00:35:56,954 --> 00:35:59,576
should plow into electric vehicles and...

650
00:36:00,145 --> 00:36:04,387
whether or not they should just do like
one or two token EVs to say we're here.

651
00:36:04,488 --> 00:36:06,149
But her vision was to catch Tesla.

652
00:36:06,149 --> 00:36:11,032
Her vision was to make sure that, you
know, Google via Waymo did not become the

653
00:36:11,032 --> 00:36:13,774
next generation of automaker.

654
00:36:14,135 --> 00:36:15,676
And, and she pushed really hard.

655
00:36:15,676 --> 00:36:23,701
Now the book, I had to finish the book in,
geez, I think May of 21.

656
00:36:24,922 --> 00:36:26,943
June, May, June of 21.

657
00:36:27,384 --> 00:36:28,584
And, um.

658
00:36:29,201 --> 00:36:31,643
I couldn't foresee all that's gone wrong
today.

659
00:36:31,643 --> 00:36:36,307
However, I stand by everything in this
book because the last chapter of the

660
00:36:36,307 --> 00:36:41,332
epilogue basically looks at what was going
on at the time I had to finish this book

661
00:36:41,332 --> 00:36:44,975
was she fired Dan Ammon as head of crews
because things weren't working there.

662
00:36:44,975 --> 00:36:49,939
The Chevy Bolt was on fire and they still
didn't have any of these out there to

663
00:36:49,939 --> 00:36:51,300
challenge Tesla.

664
00:36:51,541 --> 00:36:56,145
And, you know, on Wall Street parliaments,
its GM has execution risk, which is, you

665
00:36:56,145 --> 00:37:00,949
know, that's very fancy banker language
for these guys who might not be able to

666
00:37:00,949 --> 00:37:01,910
get this done.

667
00:37:02,431 --> 00:37:07,035
And so with all these problems they were
having, I asked Mary in the last interview

668
00:37:07,035 --> 00:37:11,539
right before I finished the book, I said,
do you ever feel like this company suffers

669
00:37:11,539 --> 00:37:13,740
from some kind of generational curse?

670
00:37:13,941 --> 00:37:18,264
Because I actually use those words in the
book too, in that last chapter, because

671
00:37:18,589 --> 00:37:23,332
Here at GM is with the Volt, which was
actually a pretty successful product.

672
00:37:24,274 --> 00:37:27,156
It had some oil buyers, sold in pretty
good numbers.

673
00:37:27,156 --> 00:37:28,357
The technology was pretty good.

674
00:37:28,357 --> 00:37:33,441
I mean, 280 miles of range on a small
vehicle that sold for that price, pretty

675
00:37:33,441 --> 00:37:35,463
good.

676
00:37:35,463 --> 00:37:36,424
But then it's on fire.

677
00:37:36,424 --> 00:37:39,947
And she had a bit of a sense of humor
about it.

678
00:37:39,947 --> 00:37:41,188
She said, no, we're not cursed.

679
00:37:41,188 --> 00:37:44,130
And we're not explained that when you run
a big company, there are always issues.

680
00:37:44,130 --> 00:37:46,897
But that did sort of...

681
00:37:46,897 --> 00:37:51,520
You know, pre sage the fact that, you
know, this company has, does have often

682
00:37:51,520 --> 00:37:52,601
have a lot of these problems.

683
00:37:52,601 --> 00:37:58,745
They, they, they just kind of, you know,
they, they seem to open doors and have

684
00:37:58,745 --> 00:38:00,566
doorways collapse on their head at times.

685
00:38:00,566 --> 00:38:04,649
And, and that's kind of what's happened
with EVs.

686
00:38:04,789 --> 00:38:09,193
You know, look, she had, she freed up
money from lousy operations to put it into

687
00:38:09,193 --> 00:38:10,633
electric vehicles.

688
00:38:10,634 --> 00:38:14,909
And she had this platform that was going
to give her something, you know,

689
00:38:14,909 --> 00:38:21,110
categories that represented 70-75% of the
US market volume, right, all smart, and

690
00:38:21,110 --> 00:38:24,411
get there before Tesla did, except that
they, you know, they haven't been able to

691
00:38:24,411 --> 00:38:24,892
execute.

692
00:38:24,892 --> 00:38:27,813
They haven't been able to get the cars out
the door for the reasons we were talking

693
00:38:27,813 --> 00:38:28,893
about earlier.

694
00:38:29,093 --> 00:38:34,194
And it's not, I don't think it's anything
particular to GM's ability or inability to

695
00:38:34,194 --> 00:38:36,735
do it compared to the other legacy car
companies.

696
00:38:36,975 --> 00:38:41,016
I think they push so hard with so many
vehicles all at once.

697
00:38:41,861 --> 00:38:45,704
And I do think they underestimated how
tough it was going to be to make electric

698
00:38:45,704 --> 00:38:46,304
vehicles.

699
00:38:46,304 --> 00:38:47,966
Because they had done the EV1 before.

700
00:38:47,966 --> 00:38:48,606
They did the Volt.

701
00:38:48,606 --> 00:38:49,367
They did the Volt.

702
00:38:49,367 --> 00:38:50,808
This should be pretty easy.

703
00:38:50,808 --> 00:38:52,190
They've been making cars for 100 years.

704
00:38:52,190 --> 00:38:53,130
Why is it so hard?

705
00:38:53,130 --> 00:38:54,231
But it has been.

706
00:38:54,431 --> 00:38:57,674
And I think part of it is they were doing
a lot all at once.

707
00:38:57,674 --> 00:38:59,336
And part of it is the games changed,
right?

708
00:38:59,336 --> 00:39:03,179
These are much more high tech EVs than
they did in the past.

709
00:39:03,519 --> 00:39:08,644
And and by the way, like the Volt or
rather the Bolt, you know, that was kind

710
00:39:08,644 --> 00:39:09,559
of heavily used.

711
00:39:09,559 --> 00:39:10,739
see what you just did there.

712
00:39:10,739 --> 00:39:14,461
I think even with the strip, uh, part of
the problems I had with their strategies,

713
00:39:14,461 --> 00:39:18,002
the bolt, the volt people would always
like, there's even marketing.

714
00:39:18,002 --> 00:39:21,483
I think that's what's been so surprising
to me is how you're talking about, like GM

715
00:39:21,483 --> 00:39:22,424
had so many issues.

716
00:39:22,424 --> 00:39:25,265
Like I feel like marketing, all these
things that traditionally has been

717
00:39:25,265 --> 00:39:28,746
strengths for them, they even failed with
like, it has been kind of a cross support,

718
00:39:28,746 --> 00:39:30,886
but I I'm sorry, what were we going to say
there?

719
00:39:34,662 --> 00:39:42,125
Um, you know, with the, with the bolt, um,
you know, that, that vehicle was, and I

720
00:39:42,125 --> 00:39:46,986
think one of the reasons that they, they
did all right with it in terms of quality

721
00:39:46,986 --> 00:39:52,308
was it was basically a Chevy Cruz heavily
retrofitted to fit a battery and become a

722
00:39:52,308 --> 00:39:53,268
Chevy Bull.

723
00:39:53,717 --> 00:39:58,339
It wasn't an all-new platform and that
platform was the battery pack in the floor

724
00:39:58,379 --> 00:39:59,720
the way it is with Ultium.

725
00:39:59,720 --> 00:40:08,905
And you know go back about 15 plus years,
Nissan opened the plant in Mississippi and

726
00:40:08,905 --> 00:40:11,306
they had an all-new minivan platform.

727
00:40:11,306 --> 00:40:14,408
They had an all-new, they had the pickup
truck which was new to them and they had

728
00:40:14,408 --> 00:40:16,249
an all-new platform for the Ultima.

729
00:40:16,249 --> 00:40:18,911
Even though they've been making minivans
and Ultimas before, it's an all-new

730
00:40:18,911 --> 00:40:19,651
platform.

731
00:40:19,651 --> 00:40:22,697
They had tremendous quality and production
problems there.

732
00:40:22,697 --> 00:40:24,758
And these are kinds of vehicles Nissan
have been making forever.

733
00:40:24,758 --> 00:40:25,778
There's nothing special about them.

734
00:40:25,778 --> 00:40:29,940
They were just new platforms, but they
built off a lot and all at once and had a

735
00:40:29,940 --> 00:40:31,461
real, you know, and they choked on it.

736
00:40:31,461 --> 00:40:36,524
And, and I think in GM's case, yeah, they
did the Volt and the Volt and they did the

737
00:40:36,524 --> 00:40:40,826
EV1 years ago, but this, even this, this
new stuff is so different.

738
00:40:40,826 --> 00:40:45,628
And, um, yeah, it, it was a, you know, it
was more than

739
00:40:45,705 --> 00:40:48,728
Clearly more than they could do because
the past year has been a big problem.

740
00:40:48,728 --> 00:40:50,108
You bring up marketing.

741
00:40:50,249 --> 00:40:52,911
I'm not sure GM is a great marketing
company.

742
00:40:53,672 --> 00:40:58,777
Like the GMC brand is, you know, has one
of the best brand names in the business.

743
00:40:59,258 --> 00:41:03,222
Um, actually, I guess Chevy does, you
know, is very consistent too.

744
00:41:03,222 --> 00:41:06,124
They've had a Cadillac's been a problem
for a long time.

745
00:41:06,859 --> 00:41:08,180
I agree with you there too.

746
00:41:08,180 --> 00:41:11,623
I think what I meant was specifically
around marketing their electric vehicles,

747
00:41:11,623 --> 00:41:15,746
like doing the bolt vault and just kind of
some of this name-branding and then having

748
00:41:15,746 --> 00:41:18,648
these huge Superbowl ads and stuff.

749
00:41:18,889 --> 00:41:23,553
Um, obviously the big stuff of kind of
like having Biden coming in and say

750
00:41:23,553 --> 00:41:24,973
they're leading the way.

751
00:41:25,294 --> 00:41:29,117
And I think that totally all adds to what
you were talking about, about having all

752
00:41:29,117 --> 00:41:33,661
this pressure on them to get out the door
and it just can almost push them to go

753
00:41:33,661 --> 00:41:35,922
faster and

754
00:41:35,951 --> 00:41:39,089
Unfortunately, probably at their own
detriment, but

755
00:41:39,089 --> 00:41:42,010
Yeah, look, I think they saw it as an
existential fight.

756
00:41:42,511 --> 00:41:47,313
And, uh, you know, and you think about it,
you know, four or five years ago,

757
00:41:48,814 --> 00:41:55,818
everybody, analysts, investors, the think
tanks, the car companies, they all thought

758
00:41:55,818 --> 00:41:59,800
that there was going to be a somewhat
linear, I don't think anyone thought EV

759
00:41:59,800 --> 00:42:02,702
growth is going to be totally linear, but
I don't think they started leveling off

760
00:42:02,702 --> 00:42:03,943
the way it is now.

761
00:42:03,983 --> 00:42:06,844
Um, and they really, people thought
autonomy would be

762
00:42:07,008 --> 00:42:11,066
because it's been, has it been about a
year since your book came out?

763
00:42:12,117 --> 00:42:15,075
A little more by a year, a year and three,
four months.

764
00:42:15,128 --> 00:42:20,351
gotcha, what would be the chapter that you
would have written to make it like

765
00:42:20,652 --> 00:42:24,996
relevant to today or like what are the
things that maybe have surprised you or

766
00:42:24,996 --> 00:42:27,918
kind of stand out moments that have led
since that book came out?

767
00:42:27,918 --> 00:42:29,059
I mean, it sounds like a lot.

768
00:42:29,059 --> 00:42:32,262
I mean, everything I've read still seems
relevant and it almost seems like the

769
00:42:32,262 --> 00:42:35,144
stuff I've read so far has just kind of
come to fruition.

770
00:42:35,144 --> 00:42:38,606
But I'm curious if there's anything else
you would add to it.

771
00:42:39,209 --> 00:42:40,429
You know, yeah, definitely.

772
00:42:40,429 --> 00:42:47,753
So look, if I could, if I could do another
chapter on this, then I would make the

773
00:42:47,753 --> 00:42:51,335
epilogue just chapter, I think it's 12.

774
00:42:51,956 --> 00:42:56,478
And then I would have a new epilogue that
gets into all these struggles that the

775
00:42:56,478 --> 00:43:00,720
company has had just making battery packs
and writing the software and everything

776
00:43:00,720 --> 00:43:05,923
with crews and that, by the way, the other
companies have had too, I think it's worse

777
00:43:05,923 --> 00:43:08,324
at GM because GM pushed harder.

778
00:43:08,489 --> 00:43:11,271
They sold this harder and they've had all
the problems ever.

779
00:43:11,271 --> 00:43:14,394
So sometimes they had just software, some
of it production issues and GM's got them

780
00:43:14,394 --> 00:43:15,074
all.

781
00:43:17,337 --> 00:43:21,621
So there'd be a chapter just looking at
all these problems that have been way

782
00:43:21,621 --> 00:43:22,802
worse than they thought.

783
00:43:22,802 --> 00:43:28,548
And there's been some reputational damage
at GM about this for sure.

784
00:43:28,548 --> 00:43:33,412
And from an investment standpoint, what
they've done, they've bought back shares

785
00:43:33,412 --> 00:43:33,833
and they've

786
00:43:33,833 --> 00:43:35,134
raise their dividend.

787
00:43:35,134 --> 00:43:38,757
That's telling investors we're not a high
growth company with our EV plans right

788
00:43:38,757 --> 00:43:39,457
now.

789
00:43:39,798 --> 00:43:43,540
We're a value company that returns cash to
shareholders.

790
00:43:43,661 --> 00:43:46,684
So they've sort of thrown in the towel on
being rapid growth until they get their

791
00:43:46,684 --> 00:43:47,484
hands on this thing.

792
00:43:47,484 --> 00:43:50,346
It doesn't mean they won't be at some
point, but that's where they are.

793
00:43:51,027 --> 00:43:55,811
So yeah, I would have written a chapter on
that.

794
00:43:56,212 --> 00:44:00,175
And if I could change anything about it,
the only thing that would probably really

795
00:44:00,175 --> 00:44:01,536
change is there was some...

796
00:44:02,261 --> 00:44:05,863
The title is still pretty cool, Charging
Ahead, because Mary Barra really did

797
00:44:05,863 --> 00:44:06,904
charge ahead.

798
00:44:07,324 --> 00:44:15,009
The cover language was maybe a little more
optimistic than I'd like it to be at this

799
00:44:15,009 --> 00:44:18,351
point because they've had such a tough
time with the challenge.

800
00:44:18,351 --> 00:44:21,974
I wanted the cover language to be more,
she's betting, making big bet on this

801
00:44:21,974 --> 00:44:22,754
thing.

802
00:44:23,435 --> 00:44:25,215
It's a fight that I lost.

803
00:44:26,941 --> 00:44:27,142
Yeah.

804
00:44:27,142 --> 00:44:28,257
Now that's interesting though.

805
00:44:28,257 --> 00:44:31,998
But you decide in your core business,
you're going to give up all these overseas

806
00:44:31,998 --> 00:44:36,959
markets and let Toyota, Volkswagen, and
other domestic players in those countries

807
00:44:36,959 --> 00:44:41,161
have that sales volume and whatever
business you can do there.

808
00:44:41,161 --> 00:44:44,622
And by the way, you know, Peugeot, which
is now Stellantis, has done pretty well

809
00:44:44,622 --> 00:44:46,542
with Opel since GM sold it to them.

810
00:44:46,542 --> 00:44:47,222
It can be done.

811
00:44:47,222 --> 00:44:54,304
So, you know, it was a big gamble and so
far it hasn't paid off.

812
00:44:54,304 --> 00:44:55,524
I still.

813
00:44:55,721 --> 00:44:58,203
McElroy and I were talking about this on
his show.

814
00:44:58,504 --> 00:45:04,350
We still think her vision is the right
one, but the last thing she has to fix is

815
00:45:04,350 --> 00:45:07,994
can this company, does this company have
the chops to see it through?

816
00:45:07,994 --> 00:45:09,295
That's the big question.

817
00:45:09,295 --> 00:45:10,916
And I still don't have an answer to that.

818
00:45:11,271 --> 00:45:14,637
Well, and one of the things you guys kind
of alluded to or kind of threw out there

819
00:45:14,637 --> 00:45:19,767
that I think I watched this episode, the
one that was maybe a month ago or so, and

820
00:45:19,767 --> 00:45:22,110
I'm kind of curious about...

821
00:45:23,699 --> 00:45:30,023
how long she has to make those changes
before the pressure is like, we might need

822
00:45:30,023 --> 00:45:31,084
someone else in charge.

823
00:45:31,084 --> 00:45:38,048
Cause one of the interesting things I kind
of indirectly got a lot of attention

824
00:45:38,109 --> 00:45:42,852
towards her in a negative way was the
whole Elon Musk pay package thing that I

825
00:45:42,852 --> 00:45:44,173
was like, Oh, this got struck down.

826
00:45:44,173 --> 00:45:48,596
He made $60 billion, but like, well, he
only made that money because of the

827
00:45:48,596 --> 00:45:52,678
agreements that, and I think to some
extent there's pros and cons to it.

828
00:45:53,467 --> 00:45:57,688
maybe unrealistic for someone who isn't a
founder, but the idea that, yeah, he got

829
00:45:57,688 --> 00:46:00,289
paid out a bunch, but it made a bunch of
money for the shareholders.

830
00:46:00,289 --> 00:46:03,310
And there's also other variables involved
in that.

831
00:46:03,351 --> 00:46:07,972
But then it kind of brought in the, even
in the news cycle, some attention, like

832
00:46:07,972 --> 00:46:08,833
they were looking at Mary Bar.

833
00:46:08,833 --> 00:46:12,154
It's like, well, the stock prices
essentially, it went up, maybe doubled at

834
00:46:12,154 --> 00:46:14,875
one point, but now it's back to where it
was after 10 years.

835
00:46:14,975 --> 00:46:16,836
They've paid her $200 million.

836
00:46:16,836 --> 00:46:23,098
And when you include inflation, it's less
than what it was worth when she started.

837
00:46:23,327 --> 00:46:26,510
And obviously that is an uphill battle for
anyone to fight.

838
00:46:26,510 --> 00:46:34,137
I think being the CEO of GM might be a
more difficult and less like job than

839
00:46:34,137 --> 00:46:35,938
being president even right now.

840
00:46:36,099 --> 00:46:42,184
But I'm kind of curious on what your
thoughts are on like that forward looking

841
00:46:42,284 --> 00:46:47,549
and how much time she really has to make a
change to kind of guarantee she stays in

842
00:46:47,549 --> 00:46:49,190
her role much longer.

843
00:46:49,693 --> 00:46:51,633
Yeah, she's 62 now, right?

844
00:46:51,633 --> 00:46:53,654
So she could retire in three years.

845
00:46:53,654 --> 00:46:56,395
Um, and.

846
00:46:57,016 --> 00:47:03,478
You know, I think the only way the board
would throw her out.

847
00:47:03,778 --> 00:47:10,801
Um, I mean, look, it's, I think the optics
of, of the, you know, the first and only

848
00:47:10,801 --> 00:47:16,383
female CEO of an auto company, um, not
saying they keep her if she wasn't doing

849
00:47:16,383 --> 00:47:19,164
the job because of that, but, um,

850
00:47:20,065 --> 00:47:27,147
You know, it's be tough for them to make
that call if there wasn't like a serious,

851
00:47:27,147 --> 00:47:29,268
like something seriously wrong with the
company.

852
00:47:29,268 --> 00:47:32,249
Like they can't just say, yeah, we need a
change in direction.

853
00:47:32,249 --> 00:47:33,589
You're not quite it.

854
00:47:33,770 --> 00:47:37,311
I mean, look, they can do whatever they
want, but I don't think, I don't think

855
00:47:37,311 --> 00:47:41,292
that's why they do it bottom line.

856
00:47:41,292 --> 00:47:41,858
Bottom line.

857
00:47:41,858 --> 00:47:42,900
going to say that's fair.

858
00:47:42,900 --> 00:47:46,845
And I mean, she's been CEO for a decade
now, which is a lot longer than some other

859
00:47:46,845 --> 00:47:48,501
former GM CEOs.

860
00:47:48,501 --> 00:47:54,222
And look, the so, you know, if the board
wants to make a case that they keep her in

861
00:47:54,222 --> 00:47:58,063
place, and the company's profits and cash
flow are really, really strong.

862
00:47:58,604 --> 00:48:00,444
Their core business does great.

863
00:48:00,984 --> 00:48:07,566
And they, you know, and so her vision,
which started with making this a better

864
00:48:07,566 --> 00:48:12,027
run, more profitable car company, look,
their vehicle quality and productivity,

865
00:48:12,348 --> 00:48:15,948
all the stuff that had to be fixed when
she got in has been fixed.

866
00:48:16,081 --> 00:48:19,764
So there are a lot of things on that side
of the ledger that the board would point

867
00:48:19,764 --> 00:48:24,167
to say, you know, that this is why we
don't throw her out.

868
00:48:24,768 --> 00:48:29,412
I'm not saying that because she's a woman,
they wouldn't fire her if she needed to be

869
00:48:29,412 --> 00:48:29,732
fired.

870
00:48:29,732 --> 00:48:39,240
I'm saying it's that it's, there would
just be more of a magnifying glass on any

871
00:48:39,240 --> 00:48:41,081
decision they made like that.

872
00:48:41,181 --> 00:48:43,022
So they would

873
00:48:45,869 --> 00:48:49,952
The only thing I could see is, let's just
say, you know, this issue with getting the

874
00:48:49,952 --> 00:48:57,797
vehicles out, if this persists or if
there's like some terrible situation where

875
00:48:57,797 --> 00:49:02,040
there's a bunch of fires and some nasty
recall like we had with Bolt or with the

876
00:49:02,040 --> 00:49:07,804
ignition switch over a decade ago, you
know, something like that and, you know,

877
00:49:08,125 --> 00:49:11,827
she had mishandled it or was responsible
for it or if they just decided they needed

878
00:49:11,827 --> 00:49:13,628
somebody else who could do...

879
00:49:13,985 --> 00:49:15,705
could fix that sort of thing.

880
00:49:17,207 --> 00:49:20,709
I think something like either just failure
to get the EVs out the door and see this

881
00:49:20,709 --> 00:49:27,114
mission out or some other kind of
cataclysmic sort of thing.

882
00:49:27,474 --> 00:49:31,077
Cause she's got three years and look, I
think she would want to stick around to

883
00:49:31,077 --> 00:49:34,780
fix these problems and at least see this
part of her vision out.

884
00:49:34,780 --> 00:49:36,320
That's what I think.

885
00:49:36,659 --> 00:49:38,380
Yeah, I think those are really good
points.

886
00:49:38,380 --> 00:49:39,841
And yeah, I think you're totally right.

887
00:49:39,841 --> 00:49:44,324
Like if it was an ignition level issue,
like essentially what kind of is the

888
00:49:44,324 --> 00:49:48,227
reason she got on the job previously, that
level of optics, that negative where they

889
00:49:48,227 --> 00:49:51,629
kind of have to make some big changes, I
could see that.

890
00:49:51,629 --> 00:49:56,472
But I think you're right and had what we
have discussed around like the electric

891
00:49:56,472 --> 00:49:59,234
vehicle growth trajectories stay the same.

892
00:49:59,575 --> 00:50:01,896
I think there'd be a lot more pressure on
her around that.

893
00:50:01,896 --> 00:50:05,478
But since we have kind of seen that pulled
back a bit.

894
00:50:05,763 --> 00:50:10,049
Um, I think the points you're talking to
exactly kind of put her in a pretty safe

895
00:50:10,049 --> 00:50:10,570
space for that.

896
00:50:10,570 --> 00:50:13,313
I just wanted to ask him to get your
thoughts on this.

897
00:50:13,414 --> 00:50:16,735
So he's been covering it for sure.

898
00:50:16,735 --> 00:50:18,377
years from turning 65.

899
00:50:18,377 --> 00:50:20,438
Like, how long does she stay?

900
00:50:20,558 --> 00:50:24,061
And, you know, because they've had these
problems, do they throw her out?

901
00:50:24,061 --> 00:50:26,162
I mean, there's no indication they would.

902
00:50:26,383 --> 00:50:33,369
And, you know, look, you know, they've
approved this $10 billion share buyback

903
00:50:33,369 --> 00:50:38,693
and the financial moves that she's made
and, you know, some of the, you know,

904
00:50:39,594 --> 00:50:42,916
promoting some young stars at the company
at the end of last year.

905
00:50:43,237 --> 00:50:46,517
So, you know, they have to be behind her
if they're approving some of these big

906
00:50:46,517 --> 00:50:47,398
moves.

907
00:50:47,478 --> 00:50:49,778
So she's, you know, she's got time.

908
00:50:49,838 --> 00:50:53,820
Now, look, if, if the board comes out and
issued a statement soon saying they fully

909
00:50:53,820 --> 00:50:56,320
back her, that probably means she's going
to get fired.

910
00:50:56,380 --> 00:51:02,282
Now I'm being sarcastic, but it's like,
you know, whatever, whatever puts out a

911
00:51:02,282 --> 00:51:05,503
statement saying that the C we love the
CEO, they're doing a great job.

912
00:51:05,503 --> 00:51:07,003
They're usually gone within a month.

913
00:51:07,003 --> 00:51:07,223
Right.

914
00:51:07,223 --> 00:51:07,683
No, right.

915
00:51:07,683 --> 00:51:09,544
You know, I.

916
00:51:11,937 --> 00:51:16,926
I could see her finishing the job at 65
pretty easily.

917
00:51:16,967 --> 00:51:19,972
I mean, we're already less than three
years from that.

918
00:51:20,091 --> 00:51:20,471
Right.

919
00:51:20,471 --> 00:51:25,554
And I think when we've talked about very
briefly, but obviously we've been focused

920
00:51:25,554 --> 00:51:27,316
more on the EV challenges they've been
having.

921
00:51:27,316 --> 00:51:32,539
But as you mentioned earlier, cruise and
the autonomous vehicle program there, when

922
00:51:32,539 --> 00:51:36,141
you were writing the book and just going
through that, obviously.

923
00:51:37,362 --> 00:51:39,284
I don't know enough about the team.

924
00:51:39,284 --> 00:51:44,127
I don't know enough about what their
program is doing or what the state of it

925
00:51:44,127 --> 00:51:44,807
is.

926
00:51:45,088 --> 00:51:49,155
As far as autonomous ride hailing
services, it was good.

927
00:51:49,155 --> 00:51:55,540
It seems like Waymo even before they, uh,
kind of shut down cruise was, I think had

928
00:51:55,540 --> 00:51:59,202
to kind of the better long-term strategy,
just personally looking from the outside.

929
00:51:59,403 --> 00:52:04,687
And now that there's so much kind of
negativity, autonomous vehicle space,

930
00:52:04,687 --> 00:52:10,152
especially has really cooled off in the
last 18 months, just from what we've seen

931
00:52:10,152 --> 00:52:14,815
externally about like the head goes, then
they move all these other people.

932
00:52:14,815 --> 00:52:17,157
And now it's like every couple of months,
there's a new announcement.

933
00:52:17,157 --> 00:52:18,838
Now they're laying off another 24%.

934
00:52:19,631 --> 00:52:23,752
What do you think the future for that
program is?

935
00:52:23,752 --> 00:52:27,034
Like is it they're just kind of slowly
trying to just say, you know what, we gave

936
00:52:27,034 --> 00:52:32,436
it a good shot and we want to get rid of
it and try not to make as big a hubbub

937
00:52:32,436 --> 00:52:32,636
about it.

938
00:52:32,636 --> 00:52:36,398
I mean, with even Apple just the other day
announcing that they're stopping their

939
00:52:36,398 --> 00:52:36,798
program.

940
00:52:36,798 --> 00:52:42,141
Like what in your research and kind of
like connections there do you think is the

941
00:52:42,141 --> 00:52:46,162
current sentiment and maybe future for
that program at GM?

942
00:52:46,717 --> 00:52:51,281
Yeah, we just broke a story last week that
they were resuming testing with safety

943
00:52:51,281 --> 00:52:52,221
drivers.

944
00:52:52,842 --> 00:52:56,005
Probably Houston or Dallas, they're
looking at those two markets.

945
00:52:56,145 --> 00:52:58,147
Texas is a pretty easy place to run AVs.

946
00:52:58,147 --> 00:53:02,471
The regulatory environment is pretty lax,
particularly compared to California.

947
00:53:02,591 --> 00:53:09,197
So they're going to put their foot back in
the pond here and see what they can do

948
00:53:09,197 --> 00:53:09,977
with it.

949
00:53:13,309 --> 00:53:15,711
If they were going to shut it down, I
think they already would have, because

950
00:53:15,711 --> 00:53:18,733
they were spending a lot of money on this
and their investors did not like that.

951
00:53:18,733 --> 00:53:23,857
You know, when they, one of the things
that pushed their share price up recently

952
00:53:23,857 --> 00:53:25,278
was the earnings were good.

953
00:53:25,278 --> 00:53:28,501
You know, they had done all these share
buybacks and everything and they reduced

954
00:53:28,501 --> 00:53:29,942
spending in Cruz.

955
00:53:30,162 --> 00:53:34,566
And if you look at the valuation of GM, in
fact, Paul Jacobson, the CFO has been

956
00:53:34,566 --> 00:53:35,487
saying this for about a year.

957
00:53:35,487 --> 00:53:39,330
He said, look, if you buy GM now, you're
getting GM at a cheap price historically

958
00:53:39,330 --> 00:53:41,111
and you're getting Cruz for free.

959
00:53:42,112 --> 00:53:42,685
Which.

960
00:53:42,685 --> 00:53:45,648
What that says is investors place no value
on it.

961
00:53:45,648 --> 00:53:52,034
Um, and really, if you look at the other
autonomous vehicle stocks like Aurora, and

962
00:53:52,034 --> 00:53:57,400
these are all trading at next to nothing
and, you know, none of the privately held

963
00:53:57,400 --> 00:54:00,703
AB trucking companies, some of which are
doing some pretty interesting things,

964
00:54:00,703 --> 00:54:03,866
they're not going public right now because
the market doesn't like any of this stuff.

965
00:54:03,987 --> 00:54:05,788
So, um,

966
00:54:06,129 --> 00:54:09,470
If so, point is if GM wanted to shut it
down, they could, they could shut it down

967
00:54:09,470 --> 00:54:10,090
right now.

968
00:54:10,090 --> 00:54:12,091
And I think their investors would like it.

969
00:54:12,411 --> 00:54:16,453
The reason I don't think they will is one,
they do believe in the technology and in a

970
00:54:16,453 --> 00:54:22,116
way, you know, what GM shutting the whole
thing down and a lot of the bad PR and

971
00:54:22,116 --> 00:54:24,356
problems they've got governance problems.

972
00:54:27,942 --> 00:54:35,267
It's almost because they've had one
incident that was horrific, also really

973
00:54:35,267 --> 00:54:35,547
rare.

974
00:54:35,547 --> 00:54:36,888
And now that's sort of their line.

975
00:54:36,888 --> 00:54:38,429
That's not what I'm trying to do.

976
00:54:38,429 --> 00:54:42,792
It's just like the technology was actually
working fairly well.

977
00:54:42,792 --> 00:54:46,574
I don't think it was working as well as
way most, but it was working fairly well

978
00:54:46,574 --> 00:54:49,576
in terms of safety and being able to do
its job.

979
00:54:49,576 --> 00:54:51,577
So they see something worth saving.

980
00:54:52,038 --> 00:54:55,300
And then look, the other part is when you
spend 10 billion dollars in buying back

981
00:54:55,300 --> 00:54:55,900
your

982
00:54:56,957 --> 00:55:01,660
What you're saying is we don't have a good
place to put that money that will grow the

983
00:55:01,660 --> 00:55:02,561
business.

984
00:55:03,202 --> 00:55:06,865
So, if they didn't spend whatever I think
the remaining is going to be one and a

985
00:55:06,865 --> 00:55:09,827
half between one and a half and two
billion a year on cruise instead of two

986
00:55:09,827 --> 00:55:15,111
plus, they would just buy back more shares
or raise the dividend, right?

987
00:55:15,111 --> 00:55:16,793
And I don't think that's going to do much
for investors.

988
00:55:16,793 --> 00:55:19,875
When you're already returning 10 billion,
returning 11 is not going to get them that

989
00:55:19,875 --> 00:55:22,277
much more in love with your stock.

990
00:55:22,357 --> 00:55:26,100
So, you know, they've done what they need
to do to return money to their owners.

991
00:55:26,497 --> 00:55:32,300
And, you know, other than continuing the
EV push, Cruz is really the one other

992
00:55:32,300 --> 00:55:38,143
place where they see some potential growth
in revenue, along with software services,

993
00:55:38,143 --> 00:55:44,386
but that's a different issue and was never
as big a part as Cruz was supposed to be

994
00:55:44,386 --> 00:55:46,307
in this big plan they had to grow.

995
00:55:46,587 --> 00:55:50,430
So, you know, and look, there aren't that
many, there are two Robotech mouth, May

996
00:55:50,430 --> 00:55:54,231
Mobility, there are three Robotexy
companies in the US left standing.

997
00:55:54,812 --> 00:55:56,012
If you got the money,

998
00:55:56,201 --> 00:55:58,461
Why not keep trying to develop it?

999
00:55:58,461 --> 00:56:00,282
They're just gonna have to do it slowly.

1000
00:56:00,282 --> 00:56:06,544
I also think long-term, if RoboTaxi
doesn't work out as a business, and that's

1001
00:56:06,544 --> 00:56:10,245
different than the technology working, the
technology could work, but you still have

1002
00:56:10,245 --> 00:56:12,625
to have a business that makes money.

1003
00:56:12,625 --> 00:56:17,907
That means managing the fleet has to be
cheaper than what you can get people to

1004
00:56:17,907 --> 00:56:18,807
pay you.

1005
00:56:19,027 --> 00:56:23,468
And I'm suspicious of that, by the way,
because I don't think consumers care.

1006
00:56:23,785 --> 00:56:29,089
whether it's, you know, Vinny Romano from
Queens in the yellow cab or Uber and Lyft

1007
00:56:29,089 --> 00:56:31,350
drivers or a robot driving that car.

1008
00:56:31,350 --> 00:56:32,411
They don't care.

1009
00:56:32,411 --> 00:56:34,773
As long as it's safe on time, get
somewhere they want to go.

1010
00:56:34,773 --> 00:56:40,277
Um, and I'm an Italian American so I can
see Vinny Romano.

1011
00:56:40,277 --> 00:56:44,275
Um, and so I, you know,

1012
00:56:44,275 --> 00:56:48,219
I mean, one of my favorite things, I used
to go to New York all the time for work

1013
00:56:48,219 --> 00:56:48,619
trips.

1014
00:56:48,619 --> 00:56:53,364
And so like, if it was between a yellow
cab or I always had infinitely more fun

1015
00:56:53,364 --> 00:56:56,106
taking the cabs in New York than doing an
Uber.

1016
00:56:57,102 --> 00:56:59,444
But for the most part, consumers don't
really care.

1017
00:57:00,485 --> 00:57:05,488
And so, you know, what's the draw for the
Robotex unless it really is cheaper, and

1018
00:57:05,488 --> 00:57:09,110
then if it's cheaper, you have the cost of
running the business has to be cheap.

1019
00:57:10,031 --> 00:57:11,712
So it's got to be more than that.

1020
00:57:11,732 --> 00:57:17,296
And what could end up being if Robotex
just isn't a great business is, you know,

1021
00:57:17,296 --> 00:57:22,800
GM is theirs, being the first car company
to sell, you know, personally owned self

1022
00:57:22,800 --> 00:57:24,020
driving vehicles.

1023
00:57:24,629 --> 00:57:28,890
And, you know, consumers do like stuff
like autopilot, like GM supercruise, like

1024
00:57:28,890 --> 00:57:30,171
Ford's blue cruise.

1025
00:57:30,171 --> 00:57:35,213
You know, they like those systems and they
pay extra money as a subscription for them

1026
00:57:35,213 --> 00:57:37,194
in most cases or for the hardware.

1027
00:57:37,194 --> 00:57:38,334
So there's a business there.

1028
00:57:38,334 --> 00:57:41,576
And if you have something that's closer to
fully autonomous, I think people will pay

1029
00:57:41,576 --> 00:57:42,476
for that.

1030
00:57:42,616 --> 00:57:45,978
And there are other things, you know,
there are shuttles at certain places, you

1031
00:57:45,978 --> 00:57:49,399
know, airports, entertainment venues, the
Bourbon Trail, you name it.

1032
00:57:49,399 --> 00:57:52,660
There are places where that stuff makes a
lot of sense.

1033
00:57:53,437 --> 00:57:57,900
And there is a potential business for
fleet owned or personally on self-driving

1034
00:57:57,900 --> 00:57:58,420
vehicles.

1035
00:57:58,420 --> 00:58:01,602
And so I think they're developing it for
that reason too.

1036
00:58:01,602 --> 00:58:04,204
So if they don't have a robo taxi in every
city, so what?

1037
00:58:04,204 --> 00:58:06,885
They'll be selling these vehicles
somewhere somehow.

1038
00:58:07,146 --> 00:58:10,368
You know, Dan Avin, who used to run crews
for GM said something to me once.

1039
00:58:10,368 --> 00:58:11,081
And I think.

1040
00:58:11,081 --> 00:58:15,282
It's still probably right, which is, and
this is back when we had like, you know,

1041
00:58:15,282 --> 00:58:18,023
more than a dozen autonomous vehicle
companies getting funding.

1042
00:58:18,023 --> 00:58:23,564
He said, look, we don't need 12, 14,
whatever AV stacks.

1043
00:58:23,664 --> 00:58:27,505
It'll end up being like operating systems
where you've got Android and iOS, right?

1044
00:58:27,505 --> 00:58:28,886
You need like two or three.

1045
00:58:29,166 --> 00:58:30,626
That's not counting trucking.

1046
00:58:30,626 --> 00:58:34,628
Um, but so maybe you need a couple of
trucking and a couple for personally owned

1047
00:58:34,628 --> 00:58:35,328
vehicles.

1048
00:58:35,328 --> 00:58:37,366
So when you label, why didn't you,

1049
00:58:37,366 --> 00:58:40,570
you have commercial, I mean, that makes
sense.

1050
00:58:40,570 --> 00:58:41,210
Yeah.

1051
00:58:42,263 --> 00:58:43,811
So, it could go that direction.

1052
00:58:43,855 --> 00:58:44,755
Interesting.

1053
00:58:44,975 --> 00:58:49,716
Uh, I, I do realize we're kind of coming
up on an hour here, but there are two

1054
00:58:49,716 --> 00:58:51,617
areas I didn't want to talk to you.

1055
00:58:51,617 --> 00:58:56,678
We focused so much about GM as the company
internally, there's been two big

1056
00:58:56,678 --> 00:59:01,320
headwinds, especially in the sales of, uh,
electric vehicles and also just the

1057
00:59:01,320 --> 00:59:05,381
manufacturing that are kind of external,
but two things they GM has to work with.

1058
00:59:05,381 --> 00:59:12,142
And that is the UAW and dealerships with
the most recent, uh,

1059
00:59:12,199 --> 00:59:17,783
kind of strikes and stuff, the union
challenges, where, where do you see, do

1060
00:59:17,783 --> 00:59:22,147
you see that there is a viable way?

1061
00:59:22,147 --> 00:59:27,030
Should electric vehicles kind of get that
momentum again?

1062
00:59:27,491 --> 00:59:32,335
And if we do see Chinese and other cheaper
vehicles come in, do you think that there

1063
00:59:32,335 --> 00:59:39,861
is a strong or do you think they're the
current path is can be done with the UAW

1064
00:59:39,861 --> 00:59:41,502
or do you think that's going to cause?

1065
00:59:41,559 --> 00:59:46,810
a lot more headwinds and fighting between
GM and the UAW to get to those cost

1066
00:59:46,810 --> 00:59:53,142
competitiveness and the traditionally less
manufacturing needs of EVs.

1067
00:59:54,585 --> 00:59:58,988
I mean, so coming out of the strike, we
just had one of the big things that I

1068
00:59:58,988 --> 01:00:03,712
think kind of set the union's nerves at
ease a bit is, you know, the basically

1069
01:00:03,712 --> 01:00:06,554
brought the union into the battery plants.

1070
01:00:06,554 --> 01:00:10,056
And that was their one big fear is that
all these engine and transmission jobs

1071
01:00:10,517 --> 01:00:16,301
and, you know, fuel systems, emission
systems, all that stuff, they go away and

1072
01:00:16,301 --> 01:00:19,924
then they buy batteries and electric
motors from Asia or something like that.

1073
01:00:19,924 --> 01:00:20,484
So

1074
01:00:20,677 --> 01:00:25,280
between unionizing the battery plants and
the Inflation Reduction Act, which is

1075
01:00:25,280 --> 01:00:28,562
mandating that in order for all this money
to come in from the government, you have

1076
01:00:28,562 --> 01:00:29,703
to build it here.

1077
01:00:30,844 --> 01:00:33,205
That cut the union on that part of the
deal.

1078
01:00:33,205 --> 01:00:37,308
Now, the other part, will EVs be easier to
make?

1079
01:00:37,628 --> 01:00:40,971
There are a lot fewer parts and they're
doing things with how Tesla does vehicle

1080
01:00:40,971 --> 01:00:41,751
bodies.

1081
01:00:41,751 --> 01:00:46,194
And I think over time, that could reduce
the amount of labor needed.

1082
01:00:46,194 --> 01:00:49,036
That's kind of always happened through
efficiencies and automation and everything

1083
01:00:49,036 --> 01:00:49,696
else.

1084
01:00:51,005 --> 01:00:52,106
Does that accelerate that?

1085
01:00:52,106 --> 01:00:56,909
I'm not so sure, but I mean, if I had to
guess and say, yeah, probably will.

1086
01:00:57,109 --> 01:01:00,471
So, you know, that could be the fight for
down the road.

1087
01:01:00,471 --> 01:01:03,473
The way that car companies have always
handled this, they just, they retire

1088
01:01:03,473 --> 01:01:05,674
people out and don't replace as many of
them.

1089
01:01:06,115 --> 01:01:10,277
And although with this one, you know, this
union contract was a pretty good one for

1090
01:01:10,277 --> 01:01:10,717
the union.

1091
01:01:10,717 --> 01:01:11,978
It was pretty rich.

1092
01:01:12,218 --> 01:01:16,020
And John Fain, the UAW president kind of,
you know, he...

1093
01:01:16,385 --> 01:01:19,026
some very tough rhetoric for these
companies and things got pretty tense.

1094
01:01:19,026 --> 01:01:28,450
So I think what you'll probably see over
time is that companies remember these

1095
01:01:28,450 --> 01:01:32,352
things and if they have to downsize it,
wouldn't be their Mexican operations, put

1096
01:01:32,352 --> 01:01:33,292
it that way.

1097
01:01:33,793 --> 01:01:37,615
But look, if Chinese vehicles get here in
big numbers and they're a lot cheaper,

1098
01:01:37,735 --> 01:01:41,116
then Katie bar the door for everybody
because that's...

1099
01:01:41,661 --> 01:01:42,361
That's going to be a problem.

1100
01:01:42,361 --> 01:01:45,262
Look, Mary Barra said on the earnings
call, when she was asked about the Chinese

1101
01:01:45,262 --> 01:01:49,723
companies coming here, said there are
certain things about the Chinese market

1102
01:01:49,723 --> 01:01:53,644
that make building and developing vehicles
apparently cheaper, something to that

1103
01:01:53,644 --> 01:01:54,505
effect.

1104
01:01:54,505 --> 01:01:56,065
And it's not just labor.

1105
01:01:56,385 --> 01:02:04,608
So would the Chinese vehicles be at as big
a discount here as they are there?

1106
01:02:04,608 --> 01:02:05,148
I'm not sure.

1107
01:02:05,148 --> 01:02:06,088
I think they will be cheaper.

1108
01:02:06,088 --> 01:02:07,048
I think we can.

1109
01:02:07,305 --> 01:02:10,528
We can rest assured on that because
they've got more scale and more expertise

1110
01:02:10,528 --> 01:02:11,549
with EVs.

1111
01:02:11,569 --> 01:02:16,474
But yeah, if they can get into the US
market for a lot less money, you know, the

1112
01:02:16,474 --> 01:02:18,716
union's going to have a problem and so are
the companies.

1113
01:02:19,439 --> 01:02:22,000
Yeah, that's what's kind of been
interesting with the recent announcement

1114
01:02:22,000 --> 01:02:24,942
of BYD and others kind of moving to
Mexico.

1115
01:02:24,942 --> 01:02:29,886
So it kind of gets around a couple of the
challenges of selling into the US.

1116
01:02:29,886 --> 01:02:33,388
BYD even said they're like, oh, no, we
don't have any interest in doing that just

1117
01:02:33,388 --> 01:02:36,390
yet, we're just selling to the Mexican
market.

1118
01:02:36,390 --> 01:02:38,391
But it is hard.

1119
01:02:39,352 --> 01:02:40,193
Yeah, that's true.

1120
01:02:40,193 --> 01:02:41,574
That's that's true.

1121
01:02:41,874 --> 01:02:44,956
I think this thing I saw, she was in
Mexico City town, but you're right.

1122
01:02:44,956 --> 01:02:48,531
It's it is kind of south of the border and
then some.

1123
01:02:48,531 --> 01:02:53,634
But it's hard to believe that, okay, maybe
that's the case for the next few quarters.

1124
01:02:53,755 --> 01:02:57,738
But once those factories are up and
running, they're not going to start

1125
01:02:57,738 --> 01:03:03,109
seriously looking more at moving into the
US and trying to really compete there.

1126
01:03:03,109 --> 01:03:06,552
you saw what Biden said the other day
where, you know, EVs pose a national

1127
01:03:06,552 --> 01:03:07,913
security threat.

1128
01:03:07,994 --> 01:03:10,516
So, you know, that's, that's a way to levy
more tariffs.

1129
01:03:10,516 --> 01:03:14,880
Are you giving what, but the Biden
administration strategy looks like it's

1130
01:03:14,880 --> 01:03:20,285
going to be, it's used protectionist
measures to safeguard the U S industry

1131
01:03:20,285 --> 01:03:26,250
until they can get caught up and, and
compete because right now it doesn't look

1132
01:03:26,250 --> 01:03:27,131
like they can compete.

1133
01:03:27,131 --> 01:03:29,192
Otherwise you would need protectionist
measures.

1134
01:03:30,931 --> 01:03:31,131
Yeah.

1135
01:03:31,131 --> 01:03:34,514
And given that we're going into an
election here, it's kind of all up in the

1136
01:03:34,514 --> 01:03:36,815
air as to what that's going to be for the
future.

1137
01:03:36,815 --> 01:03:40,779
But, uh, re real briefly, I guess the last
thing would be just to talk about the

1138
01:03:40,779 --> 01:03:49,045
dealerships real quickly and your thoughts
on, obviously, uh, when GM was, Ford

1139
01:03:49,045 --> 01:03:51,868
obviously saw this too, when they were
kind of pushing some of the programs for

1140
01:03:51,868 --> 01:03:55,751
their electrification and being, uh,
certain dealerships that would push

1141
01:03:55,751 --> 01:03:59,774
electric vehicles or others, you saw a
bunch of dealerships drop out, especially

1142
01:03:59,774 --> 01:04:00,794
with Cadillac.

1143
01:04:01,335 --> 01:04:08,539
And so I'm kind of curious as to what you
think that means for GM long-term.

1144
01:04:08,539 --> 01:04:12,422
I mean, a big part of the actual, it's one
thing to you, they're having trouble

1145
01:04:12,422 --> 01:04:13,863
making the EVs.

1146
01:04:13,963 --> 01:04:17,525
Once you start making them, then you have
to actually be effectively moving them.

1147
01:04:17,686 --> 01:04:22,909
And that falls to something out of their,
a whole lot of it out of their control

1148
01:04:22,909 --> 01:04:23,890
with the dealerships.

1149
01:04:23,890 --> 01:04:29,234
And where do you think the future of that
is and possibly what GM can do to help

1150
01:04:29,234 --> 01:04:30,819
ensure their.

1151
01:04:30,819 --> 01:04:34,568
EVs that they start making are successful
and start moving other than just saying

1152
01:04:34,568 --> 01:04:35,909
they have a great starting price.

1153
01:04:35,909 --> 01:04:37,149
look, it's a great question.

1154
01:04:37,149 --> 01:04:40,951
And it's something they need to really get
on top of because, you know, we've seen

1155
01:04:40,951 --> 01:04:42,572
skepticism from the dealers, right?

1156
01:04:42,572 --> 01:04:48,636
You know, they were, uh, they were already
pushing the federal government, uh, on

1157
01:04:48,636 --> 01:04:49,716
this thing.

1158
01:04:49,756 --> 01:04:52,978
You know, if dealers, dealers don't like
change, cause that means they have to

1159
01:04:52,978 --> 01:04:56,260
invest more money and change how they do
work on, on the showroom floor.

1160
01:04:56,260 --> 01:04:59,902
Uh, they've, you know, they've been that
way.

1161
01:04:59,902 --> 01:05:04,704
However, if something sells and they can
make money on it, they'll be all over it.

1162
01:05:04,704 --> 01:05:05,344
So.

1163
01:05:05,533 --> 01:05:10,856
You know, we get down to, you know, the
big challenge for the legacy car companies

1164
01:05:10,856 --> 01:05:15,178
is once they presumably get to the point
where they're building a lot of these,

1165
01:05:15,518 --> 01:05:17,339
they do have to market them.

1166
01:05:17,339 --> 01:05:20,821
They really have to, which is a challenge.

1167
01:05:21,882 --> 01:05:25,584
They have to get people who shop EVs to
look at their brands.

1168
01:05:25,584 --> 01:05:25,804
Right.

1169
01:05:25,804 --> 01:05:29,706
Right now it's mostly Tesla and it can be
done.

1170
01:05:30,267 --> 01:05:33,328
Ford did a very good job getting awareness
for the Lightning.

1171
01:05:33,349 --> 01:05:36,870
So it certainly can be done, but they're
having issues keeping demand up for that

1172
01:05:36,870 --> 01:05:37,450
as well.

1173
01:05:37,450 --> 01:05:38,651
I think it's a function of price.

1174
01:05:38,651 --> 01:05:43,533
But, and look, they're not going to like
this because they've never had to do

1175
01:05:43,533 --> 01:05:48,535
marketing for BP and Exxon and the filling
stations, but they're going to have to do

1176
01:05:48,535 --> 01:05:50,756
something to get awareness for charging.

1177
01:05:50,837 --> 01:05:54,678
So, and it can't just be, look, we're
working with 12 different apps you can use

1178
01:05:54,678 --> 01:05:55,739
to charge.

1179
01:05:55,739 --> 01:05:59,320
They're going to have to convince people
that charging is not going to be a problem

1180
01:05:59,320 --> 01:06:00,100
for them.

1181
01:06:00,241 --> 01:06:03,482
So, you know, this is a different
marketing challenge than they've had, but

1182
01:06:03,482 --> 01:06:04,822
they have to do it.

1183
01:06:05,863 --> 01:06:09,364
Because I don't think they're not going to
be able to solve any resistance from

1184
01:06:09,364 --> 01:06:12,345
dealers on selling EVs just by talking to
the dealers.

1185
01:06:12,345 --> 01:06:17,448
I mean, there are dealers who are into it,
especially those who are in markets where

1186
01:06:17,448 --> 01:06:18,068
people like EVs.

1187
01:06:18,068 --> 01:06:22,290
And luxury dealers are into it because
they know luxury buyers like EVs.

1188
01:06:22,290 --> 01:06:28,452
But they, you know, they're really, as we
try to, as we see them try to penetrate

1189
01:06:28,452 --> 01:06:29,732
the mass market.

1190
01:06:30,741 --> 01:06:35,422
that they're just going to have to have
vehicles that sell because, you know, if

1191
01:06:35,422 --> 01:06:41,424
you asked a dealer 25 years ago, do you
want to invest a bunch of money in, uh, in

1192
01:06:41,424 --> 01:06:45,465
Hyundai, you know, after it wasn't the
Excel that had all those quality problems

1193
01:06:45,465 --> 01:06:50,787
in the nineties, um, you know, 25, 30
years ago, how can I use you in this

1194
01:06:50,787 --> 01:06:51,847
Hyundai franchise?

1195
01:06:51,847 --> 01:06:54,468
They'd say, no, you have one crappy
compact with bad quality problems.

1196
01:06:54,468 --> 01:06:55,528
Forget about it.

1197
01:06:55,528 --> 01:06:56,908
But now, you know,

1198
01:06:57,845 --> 01:07:00,746
Hyundai sales are pretty strong, they're a
big piece of the market and a lot of

1199
01:07:00,746 --> 01:07:02,547
dealers are investing in those franchises.

1200
01:07:02,547 --> 01:07:05,129
Those guys, you know, the money talks and
those guys follow it.

1201
01:07:05,129 --> 01:07:08,451
So you know, they've just got to make
products people want, they have to market

1202
01:07:08,451 --> 01:07:11,793
them, they have to market the whole
charging experience, get people used to it

1203
01:07:11,793 --> 01:07:13,634
and that'll solve any issue with the
dealers.

1204
01:07:13,634 --> 01:07:17,916
Those guys like selling cars and that's
all there is to it.

1205
01:07:17,967 --> 01:07:20,949
Well, it's interesting you mentioned
Hyundai and Kia because yeah, both of them

1206
01:07:20,949 --> 01:07:24,531
have had pretty successful electric
vehicles just from a product standpoint.

1207
01:07:24,531 --> 01:07:27,093
And so it makes it a lot easier to then
sell them.

1208
01:07:27,353 --> 01:07:30,816
One thing I've heard, and I became a
curious on maybe your thoughts of this is

1209
01:07:30,816 --> 01:07:34,798
like a lot of very electric vehicle
advocates are pushing for the idea.

1210
01:07:34,798 --> 01:07:41,163
Well, the OEM should just spiff electric
vehicles more instead of the regular

1211
01:07:41,163 --> 01:07:43,024
combustion engine cars at dealerships.

1212
01:07:43,024 --> 01:07:46,786
And my immediate thing is like, well,
okay, so they have to now even pay more.

1213
01:07:46,887 --> 01:07:50,888
what thin margins and challenges they had
with EVs just becomes even that much more

1214
01:07:50,888 --> 01:07:52,108
exponential.

1215
01:07:52,769 --> 01:07:56,931
I think it totally goes to what you're
saying about like, yeah, a salesperson is

1216
01:07:56,931 --> 01:07:58,271
going to be incentivized.

1217
01:07:58,952 --> 01:08:01,753
If they have to do more work, but there's
a bigger payoff, yeah, that probably would

1218
01:08:01,753 --> 01:08:02,533
work.

1219
01:08:02,533 --> 01:08:09,896
But do you think that is a realistic
possibility with just the other financial

1220
01:08:09,896 --> 01:08:13,758
challenges I guess that some of these
companies are having with just getting the

1221
01:08:13,758 --> 01:08:16,178
EVs off to the dealerships?

1222
01:08:16,957 --> 01:08:22,901
You know, they may have to invest some
money here and, you know, maybe, you know,

1223
01:08:22,901 --> 01:08:23,622
they add incentive.

1224
01:08:23,622 --> 01:08:27,424
I mean, look, there's a lot of government
money incentivizing these things already.

1225
01:08:27,985 --> 01:08:32,669
But to get dealers on board, do they have
to raise the markup that the dealers get

1226
01:08:32,669 --> 01:08:33,089
to keep?

1227
01:08:33,089 --> 01:08:35,171
I mean, it's a possibility.

1228
01:08:35,171 --> 01:08:39,114
The dealers don't like when they kind of
they do stuff like that.

1229
01:08:39,114 --> 01:08:42,276
The dealers want to kind of manage that
side of it.

1230
01:08:42,276 --> 01:08:42,941
But.

1231
01:08:42,941 --> 01:08:44,401
I mean, that's one thing they could do.

1232
01:08:44,401 --> 01:08:49,364
And look, the car companies have been
cutting the markup that the dealers get to

1233
01:08:49,364 --> 01:08:51,024
keep for a long time.

1234
01:08:51,044 --> 01:08:56,187
And so, you know, if you push that in the
other direction for EVs, that could move

1235
01:08:56,187 --> 01:08:57,147
the needle.

1236
01:08:57,587 --> 01:09:02,270
Um, I think they've got programs to help
them invest the money they need for the

1237
01:09:02,270 --> 01:09:04,610
repairs and service base and that sort of
thing.

1238
01:09:04,851 --> 01:09:06,411
Uh, but it is an investment for these
guys.

1239
01:09:06,411 --> 01:09:08,772
So, um, you know, it.

1240
01:09:09,181 --> 01:09:11,602
to get them all onside, they're going to
have to do it.

1241
01:09:11,602 --> 01:09:16,624
Look, you've seen GM with its Cadillac and
Buick dealers, you've seen them thin the

1242
01:09:16,624 --> 01:09:20,666
herd because some of them, they just
basically bought them out if they didn't

1243
01:09:20,666 --> 01:09:22,126
want to sell EVs.

1244
01:09:23,027 --> 01:09:30,090
And in some ways it's better because their
dealer network was too big on some markets

1245
01:09:30,090 --> 01:09:30,970
anyway.

1246
01:09:30,970 --> 01:09:35,092
So the surviving dealers just sell more
cars and they're happy, because they're

1247
01:09:35,092 --> 01:09:36,912
getting more throughput in their store.

1248
01:09:37,585 --> 01:09:38,945
more profit for them.

1249
01:09:39,046 --> 01:09:44,550
So, you know, I think they may have to
create these incentives, but you know,

1250
01:09:44,550 --> 01:09:48,393
look, the biggest thing they can do is
just make a cool EV that people want.

1251
01:09:48,393 --> 01:09:52,376
And I mean, it would sound simple, but you
do that.

1252
01:09:52,376 --> 01:09:56,360
And the dealers, the dealers, if
something, if customers want to move it,

1253
01:09:56,360 --> 01:09:59,622
when I talk to dealers, the biggest
complaint is that a lot of them will tell

1254
01:09:59,622 --> 01:10:00,403
me the same thing.

1255
01:10:00,403 --> 01:10:02,904
You know, people aren't coming in here
asking us for EVs.

1256
01:10:03,451 --> 01:10:07,312
And I mean, the good or bad is if it's a
hot car, they can mark it up.

1257
01:10:07,713 --> 01:10:09,014
And exactly.

1258
01:10:09,014 --> 01:10:13,816
So, uh, I think that is really, uh, I, I
completely agree with you.

1259
01:10:13,816 --> 01:10:17,038
I think the challenge and that's obviously
why Tesla has had so much success along

1260
01:10:17,038 --> 01:10:19,700
with some of the other startups is good
product.

1261
01:10:19,700 --> 01:10:23,102
You have a product that looks good, that
works well, easy to use.

1262
01:10:23,102 --> 01:10:28,344
Uh, and some of it obviously is
generational connection, but yeah, I, I

1263
01:10:28,344 --> 01:10:31,786
think that is the biggest challenge that
some of these legacy automakers have.

1264
01:10:31,786 --> 01:10:32,251
I.

1265
01:10:32,251 --> 01:10:35,260
I agree with you, the lightning's a good
product, but it's way too for what it is.

1266
01:10:35,260 --> 01:10:36,863
It's priced way too high.

1267
01:10:36,961 --> 01:10:42,208
That's, yeah, the price is still way too
big for most people on a lot of these EVs.

1268
01:10:42,859 --> 01:10:45,000
And, uh, I guess one last thing, I'm
sorry.

1269
01:10:45,000 --> 01:10:49,362
Uh, then we'll let you go with the
announcement yesterday of, uh, for now

1270
01:10:49,362 --> 01:10:52,084
being able to use the Tesla charging
network.

1271
01:10:52,284 --> 01:10:55,266
Do you think, uh, I think that does kind
of help actually with some of the

1272
01:10:55,266 --> 01:10:59,408
education and just kind of off-line at the
now dealerships instead of having to go

1273
01:10:59,408 --> 01:11:01,490
really deep into it was like, Hey, you can
use the Tesla ones.

1274
01:11:01,490 --> 01:11:02,550
They work.

1275
01:11:02,690 --> 01:11:08,654
Do you think that is a wise long-term
strategy for these companies that

1276
01:11:08,654 --> 01:11:09,811
essentially every.

1277
01:11:09,811 --> 01:11:12,979
time that someone goes on a road trip or
needs to charge somewhere.

1278
01:11:13,423 --> 01:11:16,857
They're using a literally a competitor's
product and then sees the.

1279
01:11:16,857 --> 01:11:20,560
Okay, I've asked them this question myself
and they all tell me, you know, it's not

1280
01:11:20,560 --> 01:11:24,944
it's not a problem But you know when
you're when you're arch rival and selling

1281
01:11:24,944 --> 01:11:30,228
EVs, it's their brand name on the charger
that works Look that is a marketing

1282
01:11:30,228 --> 01:11:33,431
advantage for Tesla You know one
underrated thing about Tesla's they're a

1283
01:11:33,431 --> 01:11:38,955
great marketing company and Elon Musk is a
great marketer himself And look in some

1284
01:11:38,955 --> 01:11:43,139
ways he you know, he can be his own worst
enemy But the guys just you know, he and

1285
01:11:43,139 --> 01:11:45,940
his company always have attention, right?

1286
01:11:47,333 --> 01:11:51,236
I think they are kind of the example of
even bad news is good news.

1287
01:11:52,818 --> 01:11:53,478
Yeah.

1288
01:11:54,552 --> 01:12:05,601
So look, if people like the other EVs,
they'll buy them and just use Tesla's

1289
01:12:05,601 --> 01:12:10,085
charger knowing that that's the place to
go charge.

1290
01:12:10,125 --> 01:12:12,687
And look, Tesla will make some money off
of this because they'll build more

1291
01:12:12,687 --> 01:12:15,650
chargers and they'll make some money off
of this.

1292
01:12:15,650 --> 01:12:18,232
It's not like the charging business isn't
a huge moneymaker for them.

1293
01:12:18,232 --> 01:12:18,852
But

1294
01:12:19,457 --> 01:12:20,617
it will make them some money.

1295
01:12:20,617 --> 01:12:25,738
Yeah, I think as I look at the market, I
mean, other than Cybertruck, you know,

1296
01:12:25,738 --> 01:12:32,500
Tesla's vehicles, you know, you're looking
at two big, two sedans, two crossovers

1297
01:12:32,800 --> 01:12:34,681
with pretty much the same styling.

1298
01:12:34,801 --> 01:12:39,702
So, you know, as we get more vehicles from
other companies with from brands that

1299
01:12:39,702 --> 01:12:46,044
people are already loyal to, you know, I
think they can overcome the fact that

1300
01:12:46,044 --> 01:12:48,144
people are going to go to Tesla for
charging.

1301
01:12:48,273 --> 01:12:52,055
And the other thing is like people go to
so many different chargers wherever they

1302
01:12:52,055 --> 01:12:59,020
needed, wherever it's convenient that I
think they'll be okay with it, but

1303
01:12:59,963 --> 01:13:02,125
I think there's truth to that and
definitely in the long term, but as

1304
01:13:02,125 --> 01:13:07,209
someone who's done a lot of UV road trips,
I've been consistently disappointed by

1305
01:13:07,209 --> 01:13:09,010
the, oh yeah.

1306
01:13:09,672 --> 01:13:12,874
And every time it's like, every time I try
to give them the benefit of the doubt and

1307
01:13:12,874 --> 01:13:15,777
I'm like, well, actually this is a higher
power charge when technically it'll be

1308
01:13:15,777 --> 01:13:17,198
like, it'll save me 10 minutes.

1309
01:13:17,198 --> 01:13:18,640
It always costed me 20 minutes.

1310
01:13:18,640 --> 01:13:22,162
Um, and I usually just ended up driving to
the Tesla one down the road anyway.

1311
01:13:22,463 --> 01:13:26,726
But, um, I, I guess one comment on that is
I, I do think it was really,

1312
01:13:26,927 --> 01:13:30,189
It's interesting that Jim Farley and the
four team did kind of position.

1313
01:13:30,189 --> 01:13:31,611
I thought they were vocal about this.

1314
01:13:31,611 --> 01:13:34,653
I haven't really heard a similar thing
from Jim, but they looked at it as.

1315
01:13:34,694 --> 01:13:38,937
Actually, it's a great opportunity to get
in with Tesla and like see Tesla drivers,

1316
01:13:38,937 --> 01:13:42,781
then see our products on a regular basis
and almost kind of looked at as an

1317
01:13:42,781 --> 01:13:46,784
acquisition or whether that is them trying
to do market and position.

1318
01:13:46,784 --> 01:13:48,125
Why they have to do this.

1319
01:13:48,125 --> 01:13:50,888
I don't know, but at least the strategy of
it did sound kind of good.

1320
01:13:50,888 --> 01:13:53,967
Um, and then the other thing that I hope.

1321
01:13:53,967 --> 01:13:57,288
I'm imagining GM will do is the fact that
they included the plug and charge

1322
01:13:57,288 --> 01:13:57,868
protocol.

1323
01:13:57,868 --> 01:14:02,010
So when you plug in a four DV, it charges
pretty much exactly this.

1324
01:14:02,010 --> 01:14:03,111
You don't have to use the app.

1325
01:14:03,111 --> 01:14:06,292
You don't have to kind of do all the other
stuff that these other chart.

1326
01:14:06,292 --> 01:14:08,953
I mean, once again, which makes the
charging network for Tesla that much

1327
01:14:08,953 --> 01:14:09,293
better.

1328
01:14:09,293 --> 01:14:13,595
But, um, with that, David, I've taken
plenty of your time today.

1329
01:14:13,935 --> 01:14:16,877
I really do want to say thank you for all
this has been really fascinating.

1330
01:14:16,877 --> 01:14:20,298
And I'm sure listeners would have really
enjoyed your perspective and just kind of

1331
01:14:20,298 --> 01:14:21,498
learning more about.

1332
01:14:21,591 --> 01:14:25,843
the GM backstory and challenges they faced
with electric vehicles and where they're

1333
01:14:25,843 --> 01:14:26,164
going.

1334
01:14:26,164 --> 01:14:28,792
So I'll let you get going and thank you so
much for joining us today.

1335
01:14:34,219 --> 01:14:38,359
As we wrap up today's episode with David
Welch, we hope you've found this episode

1336
01:14:38,359 --> 01:14:41,319
of Grid Connections both insightful and
inspiring.

1337
01:14:41,399 --> 01:14:45,379
David's expertise and his book Charging
Ahead offer a fascinating glimpse into the

1338
01:14:45,379 --> 01:14:49,339
challenges and opportunities facing
General Motors as it tries to reinvent

1339
01:14:49,339 --> 01:14:52,099
itself in the current automotive industry.

1340
01:14:52,159 --> 01:14:55,539
Before you go, we do have a few parting
requests though.

1341
01:14:55,539 --> 01:14:59,599
If this episode sparked your interest or
curiosity, please share it with someone

1342
01:14:59,599 --> 01:15:02,465
else who would find it just as
informative.

1343
01:15:02,667 --> 01:15:06,537
Your support by sharing helps us reach
more listeners passionate about the topics

1344
01:15:06,537 --> 01:15:07,827
we discuss.

1345
01:15:07,987 --> 01:15:13,237
Our podcast downloads have actually been
growing on average almost 30 % month over

1346
01:15:13,237 --> 01:15:15,627
month for the past six months.

1347
01:15:15,687 --> 01:15:19,147
The majority of this growth has come
naturally from our listeners sharing our

1348
01:15:19,147 --> 01:15:22,447
podcasts with like -minded and curious
individuals.

1349
01:15:22,647 --> 01:15:26,387
By keeping this momentum going, it means
we can continue to get the great guests we

1350
01:15:26,387 --> 01:15:30,368
all enjoy on to discuss the topics we're
all passionate about.

1351
01:15:30,368 --> 01:15:34,798
Plus stay ahead of this curve by signing
up for our weekly newsletter, which you

1352
01:15:34,798 --> 01:15:37,348
can find a link to in the show notes.

1353
01:15:37,348 --> 01:15:40,648
It's your direct line to the latest
industry news, exclusive insights, and

1354
01:15:40,648 --> 01:15:43,388
behind the scenes content from Grid
Connections.

1355
01:15:43,508 --> 01:15:47,228
Remember, we're always on the lookout for
fresh topics and remarkable guests to

1356
01:15:47,228 --> 01:15:48,448
bring onto the show.

1357
01:15:48,448 --> 01:15:51,758
So if there's someone you're eager to hear
from or a subject you can't wait to dive

1358
01:15:51,758 --> 01:15:53,448
into, let us know.

1359
01:15:53,448 --> 01:15:58,178
Your suggestions are invaluable to making
this show become what we all want it to

1360
01:15:58,178 --> 01:15:58,850
be.

1361
01:15:59,232 --> 01:16:02,832
For those interested in learning more
about GM's evolution and the broader shift

1362
01:16:02,832 --> 01:16:06,702
towards electric and autonomous vehicles,
remember to check out the show notes for

1363
01:16:06,702 --> 01:16:10,052
the link to get a copy of David's book,
Charging Ahead.

1364
01:16:10,412 --> 01:16:13,852
We're grateful for your enthusiasm for the
subjects we cover on this podcast.

1365
01:16:13,852 --> 01:16:17,282
Thank you for tuning in and until next
week, this is The Great Connections

1366
01:16:17,282 --> 01:16:19,128
podcast signing off.