I recently watched a program in which General Motors President Dan Ammann discussed the future of his company, and I was very surprised by what was missing from their vision. The program was “Autoline This Week” with host John McElroy. It was a 30-minute interview and well worth watching.
I find Ammann’s position regarding the automotive and mobility future interesting. He only joined GM in 2010 and has quickly risen to the post of President. I actually joined General Motors (Design Staff) 24 years before Dan. I am sometimes surprised how top leaders, with little actual mobility experience, feel they fully understand the super-complex urban mobility future.
Ammann made an effort after joining GM to position himself as a “car guy” even though his experience is in finance. He became a certified car tester and drove GM’s performance cars at high speed on test tracks. (Although, this doesn’t have a lot to do with the mobility future).
Since he comes from Morgan Stanley and the investor world of Wall Street, Ammann seems to understand the importance of “optics”—positioning GM as a new mobility company. After GM made big investments in Cruise Automation, Lyft, and others, Ammann would pose for pictures with the leaders of the various execs that GM just invested in, as though he were one of those (generally) young innovators.
Obviously, GM remains a massive company. In the interview, Ammann discussed the challenges of leading GM, at a time where the company has to be somewhat “ambidextrous.” He called their core business the “owner-driver” model, where people buy cars from their company. But at GM they know new business models are coming and claim they will change their business when needed.
He mentioned there are roughly 3.2 trillion miles traveled in the U.S. every year. He then said the total miles of all ride-hailing (Uber/Lyft) services in the country were only 1/10 of 1 percent. So, looking at the larger mobility industry from a miles traveled perspective, not vehicles sold, the disruption facing GM’s traditional business is seen by Ammann and other GM leaders as very small at this time.
He said; “We see our current driver-owner model continuing in massive scale for a very long period of time”. Wow! And to think Ammann is on the Board of Directors of Lyft with John Zimmer. John is Lyft’s President, a mobility leader who published the 2016 white paper stating; “By 2025, private car ownership will all but end in major U.S. cities.” These men are like polar opposites on their separate visions for the mobility future.
Ammann then began to speak about how GM’s leaders all see the mobility future for the company. He shared their company vision. It has three parts to it, and they all include a zero:
1. Zero crashes
2. Zero emissions
3. Zero congestion
These three objectives are all good ones to focus on. If we can live in a world without crashes, emissions and congestion, that would be amazing. But this vision leaves out a very important element, one I am surprised Ammann, who comes from the financial world, seems to have missed. That missing element is economics. It’s about creating future mobility for millions (even billions) of consumers around the planet that costs much less!
Too bad GM’s former vice-president Don Runkle isn’t still around to explain this to Ammann. It was Runkle who once said; “I believe in economic gravity, the lowest-cost solution will win”. The digital future is allowing mobility to cost far less.
The new players, such as Uber, Lyft, Waymo and others, will be focused on offering consumers far less expensive mobility options. These companies will be seeking to reduce the cost of daily mobility by 50 percent or even 70 percent from what the driver-owner model costs consumers today.
I encourage GM to also focus on creating the best mobility value of consumers for their dollar. Maybe affordable mobility doesn’t have a catchy “zero” in it, but I hope they will add this to their corporate vision.
Ford has made an accomplishment that will never be bested, never even be tied.
Dan Nicholson is vice president of General Motors Global Propulsion Systems, the organization that had been “GM Powertrain” for 24 years.
Chinese electric-car startup Nio Inc. is forming a manufacturing joint venture with Beijing E-Town International Investment and Development Co., which is investing 10 billion yuan ($1.5 billion) in the business.