GM sees Tesla as 'big' threat

General Motors CEO Dan Akerson is known for taking the post-bankruptcy corporate behemoth to task for not innovating fast enough and for squandering research dollars on pie-in-the-sky patents.

Now the executive is reportedly looking over his shoulder at Tesla, the upstart electric-car company co-founded by maverick billionaire Elon Musk, as a potential threat to GM’s own business.

 

According to Bloomberg, Akerson recently warned employees that Tesla should be seen as a disruptive force in the automobile industry and that GM needs to pay attention to how Tesla operates and adapt accordingly. Akerson has even assigned a small team to study Tesla and how it could hurt the larger automaker, according to GM Vice Chairman Steve Girsky.

 

“He thinks Tesla could be a big disrupter if we’re not careful,” Girsky told Bloomberg.

 

GM introduced the Chevrolet Volt plug-in hybrid at the end of 2010 – and the ill-fated EV1 15 years earlier – but the Volt has underperformed the company's sales expectations, despite leading all plug-in cars in 2012. GM is working on the next-generation Volt, which could cost $10,000 less than its predecessor when introduced in 2015 or 2016. The current Volt starts at $35,995 with factory rebates, while the Tesla Model S starts at $69,900 – and outsold the Volt in the first quarter of 2013.

At the same time that Akerson is pushing innovation, he’s also pushing for accountability on patents. The CEO wants to shift research and development spending away from futuristic concepts and focus instead on commercial applications.

 

Under Akerson, GM cut R&D spending by 9.3 percent to $7.37 billion last year, and saw the departure of some of the company’s top R&D executives. And while Akerson wants GM to take more risks, the CEO expects R&D to focus on ideas that car buyers will actually want.

 

“The definition of success at R&D used to be: How many patents have you generated?” Girsky said. “We have a new definition of success: How much of your stuff actually goes into the car?”

 

Girsky acknowledged that GM is still struggling to believe in its own ability to pick up the pace of innovation. But he pointed to GM’s plan to implement 4G LTE in most U.S. vehicles starting next year and the debut of the diesel version of the Chevrolet Cruze earlier this year as examples of GM’s ability to fast-track significant technologies to market. 

“At some point, the mindset … went from, ‘We can’t do it, we can’t do it, we can’t do it’ to ‘Wow, not only can we do it, but we’re going to win,’” Girsky said. To encourage employees’ efforts, Girsky has taken to awarding patches depicting Apollo 13, the 1970 NASA space mission often cited as a prime example of overcoming overwhelming odds to accomplish success.

 

And in a case of Tesla learning from GM and then vice-versa, Girsky noted that the underbody of the Model S is similar to a “skateboard-like” concept that GM came up with in 2002 for fuel-cell vehicles.

“In the old days, [GM] would’ve said, ‘It’s a bunch of laptop batteries and don’t worry about it,’” Girsky said.

He added that Akerson’s “view of the world is this kind of thing can change, can impact our organization. It may not be in his lifetime here," he added, "but it will be in somebody’s lifetime. And we need to be prepared."

[Source: Bloomberg]

Source: MSN