GM CEO Says Pandemic Helped Cut Costs; Decontenting Incoming

Matt Posky
by Matt Posky
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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]

Matt Posky
Matt Posky

Consumer advocate tracking industry trends, regulation, and the bitter-sweet nature of modern automotive tech. Research focused and gut driven.

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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!

  • 285exp If the conversion to EVs was really so vital to solve an existential climate change crisis, it wouldn’t matter whether they were built by US union workers or where the batteries and battery materials came from.
  • El scotto Another EBPosky, "EVs are Stoopid, prove to me water freezes at 0 degrees Celsius" article.It was never explained if the rural schools own the buses or if the school bus routes are contracted out. If the bus routes are contracted out, will Carpenter or Bluebird offer an electric school bus? Flexmatt never stated the range of brand-unspecified school bus. Will the min-mart be open at the end of the 179-mile drive? No cell coverage? Why doesn't the bus driver have an emergency sat phone?Two more problems Mr. Musk could solve.
  • RICK Long time Cadillac admirer with 89 Fleetwood Brougham deElegance and 93 Brougham, always liked Eldorado until downsized after 76. Those were the days. Sad to see what now wears Cadillac name.
  • Carsofchaos Bike lanes are in use what maybe 10 to 12 hours a day? The other periods of the day they aren't in use whatsoever. A bike can carry one person and a vehicle can carry multiple people. It's very simple math to figure out that a bike lane in no way shape or form will handle more people than cars will.The bigger issue is double parked delivery vehicles. They are often double parked and taking up lanes because there are cars parked on the curb. You combine that with a bike lane and pedestrians Crossing wherever they feel like it and it's a recipe for disaster. I think if we could just go back to two lanes of traffic things would flow much better. I started coming to the city in 2003 before a lot of these bike lanes were implemented and the traffic is definitely much worse now than it was back then. Sadly at this point I don't really think there is a solution but I can guarantee that congestion pricing will not fix this problem.
  • Charles When I lived in Los Angeles I saw a 9-5 a few times and instanly admired the sweeping low slug aerodynamic jet tech influenced lines and all that beautiful glass. The car was very different from what I expected from a Saab even though the 900 Turbo was nice. A casual lady friend had a Saab Sonnet, never drove or rode in it but nonetheless chilled my enthusiasm and I eventually forgot about Saabs. In the following years I have had seven Mercedes's, three or four Jaguars even two Daimlers both the 250 V-8 and the massive and powerful Majestic Major. Daily drivers of a brand new 300ZX 2+2 and Lincolns, plus a few diesel trucks. Having moved to my big farm in central New York, trucks and SUV's are the standard, even though I have a Mercedes S500 in one of my barns. Due to circumstances with my Ford Explorer and needing a second driver I found the 2006 9-5 locally. Very little surface rust, none undercarriage, original owner, garage kept, wife driver and all the original literature and a ton of paid receipts and history. The car just turned 200,000 miles and I love it. Feels new like I'm back in my Nissan 300ZX with a lot more European class and ready power with the awesome turbo. So fun to drive, the smooth power and torque is incredible! Great price paid to justify going through the car and giving her everything she needs, i.e., new tires, battery, all shocks, struts, control arms, timing chain and rust removable to come, plus more. The problem now is I want to restore it and likely put it in my concrete barn and only drive in good weather. As to the writer, Alex Dykes, I take great exception calling the 9-5 Saab "ugly," finding myself looking back at her beauty and uniqueness. Moreover, I get new looks from others not quite recognizing, like the days out west with my more expensive European cars. There are Saabs eclipsing 300K rourinely and one at a million miles and I believe one car with 500K on the original engine. So clearly, this is a keeper, in love already with my SportCombi. I want to be in that elite club.