By on July 21, 2020

General Motors CEO Mary Barra predicted a brief recession and streamlined economic recovery in a recent interview. Mixed in with favorable coverage of how the company saved Michigan’s Governor Gretchen Whitmer by manufacturing personal protective equipment intended to combat the pandemic, the Detroit Free Press took time out to get Barra’s expert opinion on various subjects.

She mused that a 300-mile range will be the sweet spot for GM’s electric vehicles, noting that the company may eventually offer distances in excess of that with its new Ultium platform, and touted the merits of the Inclusion Advisory Board she recently placed herself at the head of. Things began to get more substantive when she attempted to predict how long the economy would languish as a result of COVID-19 lockdowns

“If you step back to March, and even before then, we had a lot of learnings from China, from Korea and the United States. We believe we do a very good job of keeping people safe by reducing the possibility that someone with COVID can enter our plants,” she said of the virus. “And then all the work we do within the facilities to prevent the spread. We took time and we trained everybody. People understood that we’re working hard to keep the environment safe for them. One of the things we’re trying to do now is really encourage people to use those same protocols when they’re not at work.”

She praised Whitmer’s new executive order requiring masks (with violators subject to a $500 fine and business legally obligated to deny unmasked persons entry), suggesting it will prove an important factor in America’s recovery as more areas mandate similar rules. Then Karen Mary discussed how GM sees automotive sales rebounding swiftly, claiming the turnaround is already underway in the automotive sector.

“We are seeing a recovery. We think it’s going to be a relatively short-lived recession,” Barra elaborated. “But we have a long way to go because we went to a pretty low base. The new outbreaks do pose potential setbacks, but we’re hopeful that the U.S. economy will be back to 90 [percent] of pre-pandemic levels early next year. There’s a lot of uncertainty.”

That precariousness has been worsened by General Motors (and the industry as a whole) swapping toward quarterly sales reporting. When data was shared monthly, it was much easier to take the industry’s pulse and make an assessment. But we know that Q2 volumes typically outperform Q1 and GM’s figures didn’t reflect that in 2020. If the recovery is actually happening, next quarter’s volumes should see significant gains over the last three months, with Q4 performing even stronger.

For the most part, we’re chronicling this for posterity; for the ability to pull it out at a later date and see just how accurate Ms. Barra was in her predictions. We’ve seen a number of other business leaders suggest news of another massive recession is overblown. Economists, on the other hand, have predicting bad news since 2019, when a survey by the National Association for Business Economics showed 72 percent of respondents claiming there would be a prolonged economic retreat by the end of 2021. One could ague that the pandemic accelerated that timeline and delivered it early. The U.S. unemployment rate has already ballooned to 11.1 percent, food prices have spiked, and people are buying fewer non-essential items.

GM itself has already gotten things wrong. In May, it predicted the company would return to full production by mid-June. While it hedged its bets by saying the market would ultimately dictate what occurred (duh), it was obviously incorrect in its original assertion. Looking into a crystal ball isn’t easy; we just hope leadership is less wrong this time around. As annoyed as we get with the vapid corporate messaging emanating from the industry, it’s never fun to report layoffs or economic strife.

[Image: GM]

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33 Comments on “Swift Economic Recovery in GM CEO’S Crystal Ball...”


  • avatar
    Lou_BC

    Quick control of SARS-CoV-2 means a greater chance for a rapid recovery. Barra recognizes that fact. The USA isn’t even out of the first wave.

    • 0 avatar
      thornmark

      China isn’t the US. They lied and caused the pandemic.

      Barra doesn’t recognize that there will be no quick recovery in China as the World withdraws from that totalitarian country. Japan is paying companies to leave and Australia refuses to unload their commerce.

      What will GM do, having built (most likely) profitless operations in an evil empire.

      • 0 avatar
        Lou_BC

        I don’t recall mentioning China. I see China mentioned once by Barra and that’s in relation to COVID-19. I’m talking about USA and to a degree the world in general.
        You are correct, China isn’t the US. China got a lid on SARS-CoV-2.

        • 0 avatar
          thornmark

          GM is more a China company now

          and what China reports is usually lies

        • 0 avatar
          jkross22

          “China got a lid on SARS-CoV-2.”

          Why would you believe China’s COVID claims while they lie about re-education camps for ethnic minorities existing and while they strip free speech rights of those in Hong Kong?

          • 0 avatar
            Lou_BC

            @jkross22 – I do see their economy rebounding and news does leave their country through many sources not vetted by The Central Politburo!

      • 0 avatar
        FreedMike

        No, China did not cause this. Mother Nature did. It just happened to start in China.

        And as far as the spread of the virus from China is concerned…that’s what viruses do. The only way for it to have stayed in China was for China to have completely closed its’ borders, and locked down everyone in the country until a vaccine was developed.

        #NotHappening

        If the virus happened to crop up here, then we’d have had to do the same thing, lest it be the “America virus.”

        • 0 avatar
          thornmark

          LOL

          how clueless

          China caused it all and most nations agree

          the virus was not natural and came from the lab in Wuhan

          and the Chinese lied about it and let it spread while they stocked up on medical supplies

          the Chinese knew what they were doing when canceled flights and movement from Wuhan internally but allowed external travel which spread the virus

          the Taiwanese reported the Wuhan virus before China did

          • 0 avatar
            FreedMike

            So…the Chinese let this virus spread intentionally. Why? Because clearly they wanted to screw up the economies of every single country on Earth that buys stuff from them, with the overarching goal clearly being screwing up their own economy.

            Sure thing…whatever you say…

            youtube.com/watch?v=72R8W_Xky6U

          • 0 avatar
            Lou_BC

            Someone’s aluminum foil hat is on too tight. Must be from tariffs causing one to ration supplies.

          • 0 avatar
            FreedMike

            More like addiction to Breitbart.

        • 0 avatar
          Art Vandelay

          While our response has been far from optimal, it is ridiculous to hold up China as any sort of example. Yes, their actions and early efforts to cover it up aided the initial spread and yes, their unwillingness to regulate their food supply and so called wet markets were seemingly instrumental in the virus getting started. Or are we believing the Chinese party line that the US Army brought the virus to China? In summation, our response, or lack thereof in no way diminishes the fact that the Chinese acted dispicably in all of this. I guess this has dragged on long enough now that the typical 30 second attention span of typical Americans mean the Chinese are off the hook.

          • 0 avatar
            Lou_BC

            @Art Vandelay – I didn’t go into China’s response history. My first statement doesn’t mention China at all. My second infers that China got things under control. The USA isn’t there yet.

            My main point was that the quicker you get SARS-CoV-2 spread under control the quicker you can get the economy on track.

      • 0 avatar
        Peter Gazis

        No more China in my house. We have switched to paper plates.

  • avatar
    SCE to AUX

    “When data was shared monthly, it was much easier to take the industry’s pulse and make an assessment.”

    And that assessment was usually wrong, but it generated clicks. Bundling the months into quarters damps the ‘noise’ in industry assessments, and should soften stock price fluctuation. The media hates data starvation.

    As for Ms Barra’s rosy picture, I disagree. 11-13% unemployment during an uncontrolled pandemic is devastating, and will take years to recover from. I know several people who have permanently lost jobs, and one who lost their entire business and its building, and laid off their employees due to COVID. These people won’t be buying Silverados any time soon.

  • avatar
    golden2husky

    Why the “Karen” bit? Because she is in agreement with mandatory mask usage? The cheapest, easiest, and most effective weapon we have is a mask. Don’t be a selfish f$%K. Even the Dictator is now on board, albeit for very different reasons. Regardless, the more that wear it the better. I wonder if these people wear seatbelts…

    • 0 avatar
      Lou_BC

      I too cringed at that. Gotta troll for clicks.

    • 0 avatar
      SCE to AUX

      +1

    • 0 avatar
      Matt Posky

      Wearing a mask to stop spreading the virus is fine. I have to wear one everyday because I live in city. It’s the moral busybody aspect that’s irksome — like how someone would call me a “selfish f$%K” without having literally any information on my habits. Constantly harping on how we need to wear masks when that’s all we hear everyday and then endorsing making violations a criminal offense is also bothersome. It’s almost like people don’t like being constantly bossed around by individuals who think they’re morally superior.

      • 0 avatar
        FreedMike

        If people would stop the “I’m not wearing a mask because…(insert any reason aside from “I have a legitimate medical condition that prevents me from wearing one” here)”, then no one would have anything to invoke moral superiority over.

      • 0 avatar
        jkross22

        Matt, I have the same reaction to the moral busybody, but this isn’t about those fools who as a result of having no life, focus on the minutia of existence. This is about protecting older people and sick people.

        I REALLY don’t like wearing a mask, but my discomfort is less important than inadvertently hurting or killing someone.

        • 0 avatar
          FreedMike

          Agreed 100%, jkross. What Matt isn’t talking about is that the folks who are being “moralized” about are the same ones who are saying stuff like “I don’t wanna wear a mask…’cause, FREEDOM!” or some such nonsense.

          I think the “moralizers” Matt’s talking are basically trying to “fix stupid,” and as we both know, you can’t do that.

      • 0 avatar
        Lou_BC

        I feel oh so morally superior when I’m concerned about someone else deciding to play Russian Roulette with my life.

        The USA doesn’t have an other real choice at present.

        In BC where I live things are currently under control therefore a mask is a personal choice. If the sh!t hits the fan then I’m sure it will be mandatory.

    • 0 avatar
      MeJ

      @golden
      Agree 100%

  • avatar

    Never Mask, Never Vax.

  • avatar
    tomLU86

    She gave the most positive outlook possible without sounding dumb. What else would she, or any automotive CEO, or any CEO say? He comments would be parsed and would potentially affect other peoples’ behavior–from consumers to CEOs.

    She could have said “…you know, we, and by “we” I mean the company AND our union partners, have gone to great lengths to make make our plants safe from COVID-19. In fact, by having hundreds of people in our facilities each shift, we are doing Michigan and other states a BIG FAVOR, since these people are at work, wearing masks, 6 feet apart, and NOT out spreading the virus or engaging in inappropriate behaviors. They are also not costing the states unemployment benefits. No need to thank me, Gov Whitmer, just saying :) ”

    THAT would have been refreshing and factually correct.

  • avatar
    FreedMike

    Let’s look at this from GM’s business perspective – yes, unemployment is high, but the vast majority of people who have been affected are low-paid workers, and GM has literally given up on making anything for them.

    From this perspective, things might not be as bad as they look.

    On the other hand, look at what’s happening to a brand that *does* cater to lower-paid workers – Mitsubishi. I’d be surprised if they don’t close up shop altogether.

    I do think that the new-vehicle buyers who are capable of buying a $40,000 car now might be buying a $30,000 one instead to be conservative, but the time when GM catered to entry-level buyers is long gone.

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