GM CEO Says Fan Making Changed Company Culture

DETROIT (AP) – The CEO of General Motors said Thursday the automaker learned valuable lessons last year when he stepped in to increase emergency production of ventilators to treat critically ill COVID-19 patients.

The company was able to help a small West Coast fan maker start large-scale production in about a month. This gave GM assurance that it could speed up other tasks, such as bringing electric vehicles and the like to market faster, CEO Mary Barra said.

“Carrying out the fan project kind of changed the game from a General Motors point of view, from a culture change point of view,” Barra said in a high profile conversation with members of the Automotive Press. Detroit Association.


Barra said in the past GM’s management team would have resisted when told they had to help a company that builds 250 fans a month to ramp up production to 30,000 in 150 days.

“They would have looked at me like I was crazy,” she said.

Instead, the employees approached the problem as if their loved ones might need the respirators and achieved the goal, Barra said. Yet the company has been accused by former President Donald Trump of moving too slowly.

In March of last year, GM hired hundreds of workers on the project to help Seattle-area Ventec Life Systems ramp up production at a time when feared the country was running low on breathing apparatus.

GM has invested capital and converted an electronics factory in Indiana to help manufacture the fans at a speed that a supply chain expert has called “lightning fast.”

Barra said the company now uses the same approach for its own electric vehicles, software and partially automated driver assistance systems.

Also at the event, Barra hinted that Michigan could have an electric vehicle battery factory. When asked if the state had a chance to get a factory, she said discussions were underway.

“In the not-so-distant future, we’ll be able to answer that question,” Barra said, adding that an announcement would likely come in weeks, not months.

GM has announced plans to build four battery factories in North America. The locations of two have been announced, Lordstown, Ohio, and Spring Hill, Tennessee.

Barra also pulled lightly on Tesla and its CEO, Elon Musk. Asked about Musk’s criticism of a Biden administration plan to give larger tax credits to buyers of union-made electric vehicles, she said it was much more difficult to building cars for the mass market at large than selling luxury vehicles to a slice of buyers.

She said GM stocks are undervalued relative to Tesla, Rivian, Lucid Motors, all relatively new companies with sizable market valuations that focus solely on electric vehicles.

“Sometimes the iconic traditional company, even if it innovates quickly, is viewed from a different perspective,” she said.

Barra also said she doesn’t think GM will return to having huge inventories of vehicles on dealer lots, now that she has successfully overcome a global computer chip shortage with lower inventory. While some customers want to buy a vehicle immediately, others want to order online and avoid going to a dealership, and GM will serve both of them, she said.

His comments came after the company announced two more measures to ensure it has raw materials for the transition from petroleum to battery power. The company announced an agreement with MP Materials to supply rare earth metals and finished magnets for electric vehicle motors from a new plant to be built in Fort Worth, Texas, starting in 2023.

He is also negotiating what will likely be a joint venture with Germany’s Vacuumschmelze (VAC) to build a US plant to manufacture magnets for electric vehicle motors. Production is due to start in 2024 and will create “hundreds of new jobs,” the companies said.

The companies did not announce the financial terms of the agreements. Shilpan Amin, GM’s purchasing and supply chain manager, said he has entered into a parts supply agreement with MP Materials without GM’s capital investment. The company’s capital structure with VAC is still being worked out, but the companies have said they will build a factory together.

At present, there are no factories in the United States equipped for the large-scale production of electric vehicle motor magnets, Amin said. MP said 90% of the supply now comes from China.

The moves come as automakers scramble to align parts supplies for what is expected to be a radical shift from internal combustion engines to zero-emission electric power over the next decade. GM, for example, aims to sell only electric passenger vehicles by 2035.


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