GM CEO Says Pandemic Helped Cut Costs; Decontenting Incoming

gm ceo says pandemic helped cut costs decontenting incoming

On Tuesday, General Motors CEO Mary Barra suggested her company would exit the other side of the coronavirus pandemic running much leaner than when it went in. While this will probably be the case for other automakers, as many (including General Motors) went into 2020 with restructuring efforts planned or already underway, GM is letting everyone know it’s doing cuts extra right.

This likely has to do with the automaker not wanting to look as though it’s in for a repeat of 2008, now that the global economy’s once again careening toward troubled times — but we’re just guessing. It also seems as though the extreme lack of industrial progress created by months of factory shutdowns has forced executives to fill the void with a lot of hot air. Fortunately, Barra’s message wasn’t totally devoid of useful information.

“We were quickly able to take out significant costs and we are being very conservative about what costs we turn back on,” the CEO told investors during an event hosted by global wealth manager Credit Suisse. “I believe we will come out of this with a lower cost structure that is permanent.”

According to Reuters, Barra said those cost reductions may include changes to a few different vehicle platforms offered by General Motors. Plenty of manufacturers are looking at streamlining production, and Barra suggested GM might also benefit from reducing the complexity of some platforms. While decontenting cars is hardly new, it’s a reliable fallback for the industry when the going gets tough and manufacturers need to reduce overhead.

From Reuters:

She said that the pandemic had given GM the opportunity to go through all of its line item expenses and eliminate redundant processes.

“We’ve found things that we don’t need to do and things we can do more efficiently,” Barra said.

The U.S. automotive industry has been ramping up after the coronavirus shutdown, and major automakers have been keeping a close eye on suppliers in Mexico to see the pandemic disrupts the flow of parts.

Ford CEO Jim Hackett ran a similar idea up the flagpole in December. The Blue Oval similarly mentioned that something needed to be done about risky, long-term loans — an issue GM quietly addressed this week. But Ford then veered into unpleasant tech talk, promising that its credit arm would begin tapping into connected features to funnel your driving data to insurance agencies that may offer discounts if you play nice.

Wow… so generous.

While GM has similar programs, it’s kept them quieter, mainly rolling out its grand plans for investors’ ears. However, making sweet deals with insurance groups is hardly at the top of anybody’s to-do list right now. Automakers are significantly more worried about supply chain issues as the industry restarts, with Barra confirming The General’s situation was no different. She said the company is primarily focused on addressing popular models like pickups and SUVs (which have higher profit margins) and claims they’ll be the vehicles GM will divert parts to if shortages occur.

[Image: General Motors]

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  • Jeff S Jeff S on Jun 05, 2020

    The paint is another issue. My wife's 2013 white CRV has the thinnest paint I have ever seen and it has the orange peel. The carpet is thin and yes we do have the all weather floor mats with the hooks on the driver's mat but when you pick up the mats to vacuum the carpet you feel like the carpet is going to get sucked up with the dirt. This is on the top model CRV with AWD, heated leather seats, and navigation. True on the premium cars the carpet, paint, and trim are less premium than they were a few years ago and slightly better than the lesser cars. Another thing that many car makers have done is to make it harder and more expensive to work on vehicles to where it too costly to repair them after a few years and yes I realize this is part of planned obsolescence which to some degree most of us accept but in 3 to 5 years this is extreme. Some of the complexity is to lower the cost of manufacturing. One of the other things that automakers are doing on their lower cost vehicles is offering standard interiors with fabric made out of recycled soda bottles which are no more comfortable than all vinyl interiors. Many will upgrade to leather.

  • Ponchoman49 Ponchoman49 on Jun 08, 2020

    Hear we again again. Say goodbye to things like dual rear seat back map pockets, glove box lights, overhead sunglasses holders, rear seat armrests, passenger seat height adjusters, lighting in the doors and thinner carpeting to name a few. Many of GM's current vehicles suffer from some of these items already. The new Buick Encore GX is the start. A 3 cylinder engine. No passenger seat height adjuster or lumbar. No rear seat air vents. And this is supposed to be a near luxury vehicle!

  • Sgeffe Bronco looks with JLR “reliability!”What’s not to like?!
  • FreedMike Back in the '70s, the one thing keeping consumers from buying more Datsuns was styling - these guys were bringing over some of the ugliest product imaginable. Remember the F10? As hard as I try to blot that rolling aberration from my memory, it comes back. So the name change to Nissan made sense, and happened right as they started bringing over good-looking product (like the Maxima that will be featured in this series). They made a pretty clean break.
  • Flowerplough Liability - Autonomous vehicles must be programmed to make life-ending decisions, and who wants to risk that? Hit the moose or dive into the steep grassy ditch? Ram the sudden pile up that is occurring mere feet in front of the bumper or scan the oncoming lane and swing left? Ram the rogue machine that suddenly swung into my lane, head on, or hop up onto the sidewalk and maybe bump a pedestrian? With no driver involved, Ford/Volkswagen or GM or whomever will bear full responsibility and, in America, be ambulance-chaser sued into bankruptcy and extinction in well under a decade. Or maybe the yuge corporations will get special, good-faith, immunity laws, nation-wide? Yeah, that's the ticket.
  • FreedMike It's not that consumers wouldn't want this tech in theory - I think they would. Honestly, the idea of a car that can take over the truly tedious driving stuff that drives me bonkers - like sitting in traffic - appeals to me. But there's no way I'd put my property and my life in the hands of tech that's clearly not ready for prime time, and neither would the majority of other drivers. If they want this tech to sell, they need to get it right.
  • TitaniumZ Of course they are starting to "sour" on the idea. That's what happens when cars start to drive better than people. Humanpilots mostly suck and make bad decisions.