Influencers with Andy Serwer: Mary Barra

In this episode of Influencers, Andy sits down with General Motors CEO Mary Barra to discuss their leap into the electric vehicle space, the ongoing chip shortage, and how the company plans to challenge rivals like Tesla.

Video Transcript

[MUSIC PLAYING]

ANDY SERWER: In this episode of Influencers, General Motors CEO Mary Barra.

MARY BARRA: I know the power of the team at General Motors and how committed they are, and I think we have the best team on the field. The team we have now, if they're-- even if they're working on something related to an internal combustion engine, those skills will be transferable into our future electric world. We will be selling more EVs in this country than anyone else.

ANDY SERWER: Including Tesla?

MARY BARRA: Including Tesla.

[MUSIC PLAYING]

ANDY SERWER: Hello, everyone. Welcome to Influencers. I'm Andy Serwer. I'm here with GM CEO Mary Barra. Mary, so great to see you.

MARY BARRA: Well, thanks for the opportunity. Good to be here.

ANDY SERWER: You just announced earnings last week, a nice solid strong quarter. How much of that had to do with raising prices and what you're able to get in your showrooms? And what should consumers expect going forward with pricing?

MARY BARRA: Well, we still are seeing some constraints in products. So frankly, right now, the demand for our products-- and we have some new products coming out right now, like the next generation of our Silverado, our Chevy Silverado, and our GMC Sierra. So we're seeing really strong demand. I think people are going to continue to see that there's not a huge availability of vehicles, and that is leading to stronger pricing. But we also think there's value there, with the new innovation on these vehicles.

ANDY SERWER: I do want to talk about your product line because it's really exciting, all the changes that you're making, the new vehicles. But I do want to ask you a little bit about supply chain.

MARY BARRA: Sure.

ANDY SERWER: Everyone's heard about the chip shortage, Mary. How is that affecting what you're able to do?

MARY BARRA: Well, it still is having an impact. What we see is kind of quarter after quarter, it gets better. But I think it will last into 2023. We're changing the way we do semiconductor. So over the longer term, we plan on having fewer versions of semiconductors.

We're going to standardize on three families. But for right now, we're working through the constraints. And I have to give a big shout out to our supply chain team. They do a phenomenal job.

ANDY SERWER: Another headwind, particularly from the consumer front, is higher interest rates, and I'm wondering how you're considering that, factoring that in terms of demand from the consumer side.

MARY BARRA: Well, interest rates is something we watch very, very carefully. And again, though, right now, though, I think the demand for our products is outweighing that. Generally, people might make a different decision on what features and functionality they get on the vehicle, but it really hasn't impacted demand. So it's something we continue to watch.

ANDY SERWER: And what about the model with the car dealers? You know, obviously, there are others that are doing DTC. That's a big buzz word these days. Are you considering going direct-to-consumer? And what is your thinking on that?

MARY BARRA: Well, I really think, over the long term, our dealers are a strategic asset. They have the relationship in the community with the customers. And our offering is going to be, what does the customer want? If they want to buy the vehicle completely online and have it delivered to their home, that's an option. If they want to go into the dealership and literally kick the tires, they can do that too.

But we've dramatically changed the process. That was one of the silver linings out of COVID, that we really accelerated our online shopping experience. So we're going to meet the customer where they are.

ANDY SERWER: And in terms of getting back to normalcy with regard to COVID in terms of your workforce, in terms of being able to operate your plants and facilities, where do things stand right now, Mary?

MARY BARRA: Well, I have to just say, across the globe, so many of our people who need to be at work to do their work, they stepped up. They followed our safety protocols, so they could safely come back to work. And they continue to do that.

Now, as we're getting to the point for those who can work from home, they're starting to come back. But our practice there, we call it work appropriately. And it's not I want you in the office or I don't want to be in the office. It's where can you do your best work.

And that kind of flexibility is, I think, what we need to offer today's workforce, where we can. And we're seeing that. We're in early days. I've also told them, look, we're going to start, and we're going to learn. And we'll adapt as we go.

ANDY SERWER: But the assembly plant's full bore now?

MARY BARRA: Oh, back in 2020, about five or six weeks after, for instance, the US shutdown, our people came back, and they came back in masks. They followed the protocols. I mean, the only time we've had downtime is more for part shortages, not because of the team, so, again, really, a strong performance and commitment by our GM team members.

ANDY SERWER: All right. Let's talk about some of those new vehicles. But I want to start actually with the core of the business, which is what you're doing with batteries, and I think that's a huge endeavor and part of your strategy going forward. So let's take some time and really drill down into how that works.

MARY BARRA: Absolutely. Well, and you're absolutely right. For electric vehicles, it's all about the battery. And that's why we've done two major things. First, about four years ago, we recognized-- because of our experience with the Volt, the Chevrolet Volt, and the Chevrolet Bolt, we knew we needed a dedicated architecture for EVs, one that was scalable and also one that would give us the speed to roll out a whole portfolio of electric vehicles.

Because, again, when you're looking to get to 50% of what you sell all the way to 100 by 2035, you need to have a portfolio of electric vehicles. So we started launching the Ultium platform in last-- at the end of last year with the GMC Hummer EV. It's also now being launched with the Cadillac LYRIQ. That's coming out of Spring Hill, Tennessee. And you'll continue to see more and more vehicles, like the Chevy Silverado, early next year, the Chevrolet Equinox and the Chevrolet Blazer, and there's even more coming than that we haven't released yet.

And so what's key, though, is we also looked at this pivot to EVs, and we really assessed our supply chain. And we decided that we wanted to have control over battery cell manufacturer. So we formed a joint venture with LG, one of our partners, and we now have a plant coming online this year in Ohio, another one coming online next year, the following year, and one after that. So this is really a significant change in bringing this work to the United States, creating job, and also having more control over the chemistry, the technology, and also just the actual ability to make our own battery cells, so we can meet the acceleration plan we have for EVs.

ANDY SERWER: I have so many follow-up questions on that. I mean, how many jobs, for instance, do you anticipate creating with these new battery plants in the United States?

MARY BARRA: Well, roughly every battery plant is around 1,100 to 1,200 people. So if you think about that four plants alone, and we're not done yet, that's a significant job creation.

ANDY SERWER: And these manufacturing facilities, it's probably more expensive to have them in the United States, but you'd have the trade-off with the safety of supply chain?

MARY BARRA: Well, safety of have supply chain but also logistics. And so when you think about the logistics piece of it, having it close to where we're actually building the vehicle or assembling the battery pack is an advantage.

ANDY SERWER: And so these batteries, they're basically-- with your partner, LG, they're specific-- they're going to be used specifically in GM vehicles? They're different from other manufacturers? I mean, are they ever going to be compatible? Is it ever going to be the case that batteries would be compatible across different manufacturers?

MARY BARRA: Sure. Well, when we look at the way we designed the Ultium platform for our electric vehicles, we one, wanted it to be chemistry agnostic because we knew there was going to be advancements in chemistry that would improve energy density, range, et cetera of the battery performance, but we also recognize there'd be different cells. So whether it's prismatic, pouch, or cylindrical cells, the Ultium platform can accommodate all of that.

So we are working with not only LG, but many other partners and doing our work internally on battery cell chemistry. But we also recognize the breakthrough technology could come from anywhere, and that's why we spent the time to put the flexibility into our Ultium platform. We're really focused on doing it right for the long term.

ANDY SERWER: Listening to you, I'm reminded that you studied as an electrical engineer, got some good background there from an education standpoint. And so some of the components of the elements though come from-- nickel comes from Russia. And you have to source still from overseas. What are some of the challenges there when it comes to batteries?

MARY BARRA: Well, in the short term, we feel that we've got the supply arrangements in place, so we're going to be able to meet our ramp. But going forward, we're also looking to make sure more of this supply chain is in North America or in-- or with strong trading partners, like Australia. So we've been announcing several arrangements with suppliers, not only to have the capacity between now and 2025, but 25 and beyond. And I'm very pleased with where we're at. We have a few more materials to secure, but we're on it.

ANDY SERWER: Let's talk about some of the vehicles now. I mean, and we're talking about America. We're talking about pickup trucks. It's going to be a dogfight. Silverado is going to be ready to go, though, right? Talk to us about Silverado.

MARY BARRA: Absolutely. Well, the Silverado will be rolling off assembly lines in less than 11 months. And this is a truck with no compromises, from 400 miles of range, faster fast charging, the flexibility of the bed with a multipronged tailgate, as well as the ability to reconfigure the cab. It's got more storage.

And so it's a truck with no compromises. And as we share the details with our dealers and with customers, they are-- it's a truck worth the wait. And not to mention, we already have the GMC Hummer out right now, and it is a true supertruck, turning radius, the power of the vehicle. And so when we look at all the best features of the Hummer, many of those are going to be on the Silverado as well.

And then, not too long after the Silverado launches, we'll also have the GMC, so we're going to have a portfolio of trucks. Because what we've seen in the market is truck buyers-- there's a lot of people who are now truck buyers, from those who need it for their livelihood to people who just want to drive a truck because it's cool.

ANDY SERWER: And you do have the Tesla and the Ford coming out and Rivian as well. How do you anticipate that competitive landscape?

MARY BARRA: Well, you know, General Motors has sold more trucks collectively than anyone for several years now. And so with our strong performance and our knowledge of truck customers, we feel very well-positioned to offer choices in the truck market to meet the customer what they want.

ANDY SERWER: Psychologically, I mean, there is an element that's very macho for trucks, right. You'd talked about a lot of different buyers of trucks, of course, but there is this the American frontier-- I mean, you see the commercials, right? I mean, is it really going to be the case that these guys are going to be comfortable driving electric pickup trucks?

MARY BARRA: You know, I'm driving a Hummer EV right now and-- as well as I'm driving a Volt. One of the best parts of my jobs is I get to drive a lot of vehicles. But the Hummer EV, it is just-- the turning radius, the instant acceleration, the capability, whether you need towing or payload, it's going to be there. So yes, they are going to be buying electric trucks.

ANDY SERWER: And so the Hummer is available right now?

MARY BARRA: Yes, yes.

ANDY SERWER: OK, and these, by the way, are all electric. They're not hybrids.

MARY BARRA: All electric. We strategically made the decision of why go halfway to the solution with a hybrid, but go all the way and get to the end game. And that's one of the reasons we're going to be able to have a full portfolio out faster than most of our competitors, because of that investment, because we didn't do hybrids. Customers kind of said, I'm not interested in a hybrid because I don't want to pay for two propulsion systems on the vehicle.

ANDY SERWER: This is a thing for all auto manufacturers. When are you going to be all electric or mostly electric? What is GM's benchmark there?

MARY BARRA: So in the United States, GM has said, and our plan is, that we will be all electric with our light duty vehicles by 2035. We're the only one with a full portfolio who's made that commitment. And then we think the solution for heavy duty vehicles is fuel cells, and we have the Hyrdotec technology that will be implemented there. So we're moving aggressively to move to that all-EV future.

ANDY SERWER: And is that hydrogen? I'm sorry.

MARY BARRA: Well, for our light duty vehicles, that will be battery electric. We believe the solution for heavy duty vehicles and beyond and other applications for stationary power is fuel cells.

ANDY SERWER: How do you even have a strategic plan in your mind and with the board and with senior management with this amazing revolution going on in your business?

MARY BARRA: Well, you know, I have a phenomenal board, and they have been very, very involved in setting out the strategic course and encouraging us to go fast and get to the end game technology and make sure we do it in a way that we're going to grow share. So what it represents for General Motors is tremendous growth potential, not only in electric vehicles, also in autonomous vehicles and then the services that sit on top of the vehicle. Because the vehicle really is now a software-defined platform.

ANDY SERWER: And when is the-- when are the lines going to cross, Mary, for the overall auto market in the US between electric and internal combustion engines?

MARY BARRA: Well, for General Motors, we're targeting by 2030, so five years before our goal to be 100% that we're going to be approaching 50% of our vehicles. I think we're going to be on the leading end there. But I would say around the end of the decade, you're going to start to see it become a race to what's going to be greater than 50%.

ANDY SERWER: Mary, with what's going on at GM, would you characterize it as a revolution or evolution?

MARY BARRA: I think it's both. I mean, there's certainly some areas we're moving at the speed of a revolution, with the development of Ultium, with putting in battery plants, with the portfolio of vehicles. But also an evolution, because our ICE products are important too, and making them better, more fuel efficient is very important. And then, making sure we have a plan for everyone at General Motors, whether they're in the technical team or they're working in one of our assembly plants or other plants, we're working a transition plan, so we bring everyone along.

ANDY SERWER: Well, let me ask you about the workforce, because I want to know whether it's right size, number one, and number two, I want to know whether you have the right kinds of employees with the right skills because of this mess of transition you're doing.

MARY BARRA: Well, you know, I think we do. First of all, let me talk about from a manufacturing perspective. because manufacturing is hard. And so when you look at the talented people we have in this country alone, about 45,000 people who work in our assembly plants or our manufacturing plants, and they understand how to safely build high quality vehicles or components very efficiently. And so that is an asset that General Motors brings to this transformation.

When you look at the technical talent, whether it's software engineering or battery electric, we started on this journey back at the end of 2018, actually, in some cases, a little before that, and took advantage of natural attrition to bring in the right skills that we needed. We built a software engineering organization in 2019. We've had a dedicated team doing our Ultium platform for some time. So I believe that we have the right resources now. We're hiring more because there's so much work to be done from a software perspective. But I really feel the team we have now, if they're-- even if they're working on something related to an internal combustion engine, those skills will be transferable into our future electric world.

ANDY SERWER: And how does it work with the assembly plants? Do you wind them down or convert them to operations where you're putting batteries in? Or is it really just a matter of, well, we used to put internal combustion engines, and now we're putting batteries in? How does that transition work?

MARY BARRA: Well, we're in the process now. We've already converted Detroit-Hamtramck now. That plant went down for a while, and then we totally redid much of the system.

But Spring Hill in Tennessee is a great example. That's the plant that's building the Cadillac LYRIQ. That's rolling off the lines right now. They're still building their internal combustion engine products as well. And so they can do both, and that gives us great flexibility, depending on how fast the demand moves.

And so in many cases, the existing plants we have, with some major modifications-- because an electric vehicle is heavier, so we need to change much of the conveyance. But then, to your point, once we do those changes and put the whole battery module activity into the plant or close by, then much of the rest of the vehicle builds very similarly to the way a nice vehicle is built.

ANDY SERWER: And just a follow-up question on the personnel issue, do you feel like you're able to hire the best and the brightest? Because you're competing with the Tesla's and Silicon Valley in terms of battery technology, just that part of it, right?

MARY BARRA: Absolutely. And people-- what we've seen-- at General Motors, we're approaching 50% of our technical talent has been with the company for less than five years. And so when you look at that, why do they choose General Motors? Because they want to be part of something that's going to change the world.

And when we put out our goal that we-- and really our plan to be all-electric for our light duty by 2035, we actually saw applications go up. And so we are competing with the tech companies or FAANG or whatever the definition is right now. We're definitely competing, and we're winning because we are doing something that's really important about for climate, for the environment, and for future generations. And we also have changed much of our hiring policies, and even some cases, our compensation to be spot-on competitive.

ANDY SERWER: I want to ask you a few more car questions.

MARY BARRA: Sure.

ANDY SERWER: What about the Cadillac LYRIQ-- you've talked about it. I think there's one outside. I can't quite see it.

MARY BARRA: It is there.

ANDY SERWER: But there is one out there. How's that going in terms of consumer demand? Do you have to have a whole new marketing plan there and you've got a very sort of dedicated consumer group when it comes to Cadillac? And how do you change their mindset in terms of, OK, it's now electric?

MARY BARRA: Well, one of the things we're super excited about with the Cadillac LYRIQ is with most of our new vehicles, we do customer clinics, so we actually get their input. The Cadillac LYRIQ was the highest clinicing vehicle we've had in probably my career at General Motors. So that gives us a lot of great promise.

And right now, with the initial amount of vehicles that we took reservations for, 70% of them were new to General Motors. And in just a couple of weeks, we're going to be taking-- opening the full portfolio of LYRIQs out for customers to actually do orders. This isn't reservation. This is a real order. And we're really excited to see the response based on how strong. I think the original set of LYRIQs sold out in about less than or around 10 minutes, and, again, 70% new to GM.

The same is true with the Silverado. We're seeing not only people new to General Motors, over 60%. We're also seeing really strong interest from the coast, where, traditionally, be it West Coast or East Coast, generally General Motors hasn't had as strong a share. So that's why we're convinced that this move to EVs will be growth as well.

ANDY SERWER: Another signature vehicle, the Corvette, and that's going electric but electrified. So that's a little different. Explain how it's different and why it's different in terms of it going to an electric basis.

MARY BARRA: Well, we've been working for quite a while on the electrified version because a Corvette customer has a lot of expectations of what the Corvette is going to deliver. And when you look at our last model, the C8, we raised those in order of magnitude. And so we're going to stay true to that, but you'll see the electrified next year and then more details to follow on that. But then, we also have announced we will have an all-electric Corvette as well.

ANDY SERWER: Do you have any just brand-new electric car on the roadmap in terms of just a totally new brand in the future as well?

MARY BARRA: Not necessarily a new brand, but we have, I'll say-- well, we are, in some cases, going to be creating new segments that don't exist. And we haven't shown those yet, but I'm really excited about our future portfolio of these. We've shared the Hummer, the Hummer truck, an SUT, the Volt EV, EUV, the Silverado, the Equinox, the Blazer, but there's other vehicles coming that I think really will give customers new choice.

ANDY SERWER: Mary, I have to ask you about competing against Tesla and Elon Musk. And I guess there's two things there, number one, such a huge market capitalization, and number two, just his persona. And so I want to ask you, number one, do you think you can get the respect from Wall Street that maybe Tesla has? And number two, what's it like competing against someone who takes all the air out of the room like that?

MARY BARRA: Well, I think, first off, you know, what we've seen and what that represents is that people do believe in EVs, and there's a huge opportunity there. So at General Motors, we're just focused on executing well. We've really worked to listen and understand what the customer is looking for.

And remember, we're not necessarily just selling at the premium end. We're going to have electric vehicles affordable at $30,000. And then, our joint venture or joint partnership with Honda, we're going to be doing something even more affordable than that with our affordable electric vehicle.

And so, you know, I think it's a little bit longer game. We're taking all the steps to do it right to make sure we're positioned to have a full portfolio of vehicles and win. And we have said that by mid-decade, we will be selling more EVs in this country than anyone else.

ANDY SERWER: Including Tesla?

MARY BARRA: Including Tesla.

ANDY SERWER: What about going carbon neutral? That's a big goal of yours. Where do you stand on that? And what's the roadmap there?

MARY BARRA: So we've committed to be carbon neutral in our operations by 2040, and we are well on our way. We have a very detailed plan that we're executing. I will tell you, as part of the leadership team, we monitor that on a frequent basis, and we even give our board regular updates. So that's a commitment.

We also have science-based based targets. And we are working-- and just last week released our sustainability report that really outlines our goals and what we're working on now to make sure we're addressing and taking the right steps from not only a climate change perspective, but also a diversity inclusion perspective and then also from a governance perspective.

ANDY SERWER: The social issues are difficult right now in terms of taking political stance. How do you think about that? You're on the board of Disney as well. It's a fraught time right now, in a sense, for chief executives. How are you thinking about navigating that?

MARY BARRA: Well, at General Motors, we really focus on what are our values and because we know our employees joined the company because they want to join a company that has values that they share. And so when we make statements, it's usually around our values of what we believe. And General Motors stands for inclusion.

We want everyone to participate in our all-electric future, and we value all of our customers and all of our employees. So that's our focus. And when we make statements, it's associated with our values and what we believe.

ANDY SERWER: What's the most exciting thing about your job that puts a spring in your step when you come to work every day?

MARY BARRA: Oh, my gosh. You know, I've been at General Motors-- I started as a co-op student, so I've been here for 42 years. I think what's most exciting is what's happening from an EV and an AV perspective.

When I look at the portfolio of electric vehicles we have coming out-- the team gets tired of me saying, can we move it up? Can we move it up? And then, I've had the opportunity to go out to San Francisco and ride in a driverless vehicle with Cruise.

I got to ride in Tostada, because all of our vehicles are named, and then the vehicle Pride. And the ride is just incredible. The technology-- you're in the vehicle for two minutes, and you have confidence in the technology.

ANDY SERWER: So how is that going to work with driverless vehicles? I mean, is it going to be a scenario where you have both driverless and driver-driven, if you will, vehicles, like a mix, right?

MARY BARRA: Oh, absolutely. There'll be a mix for a very long, long time. And that's why it's so important in the way that Cruise, under Kyle Vogt's leadership, as our CEO and chief technology officer, have really-- the vehicle not only knows how to drive exceptionally well, but knows how to drive around human drivers. And that's key.

ANDY SERWER: So what applications would it be where you have driverless cars and where with there will still be drivers? Like, what would be the different use cases?

MARY BARRA: Sure. Well, we think, first, autonomous will make the most sense in rideshare. And so when you think about-- right now, the average cost of a rideshare is probably up since I looked at the data last, but was between $250 and $3 a mile. When you don't have a driver in the vehicle, you can make rideshare rides much more affordable, which opens up an incredible TAM.

But we also think, in many cases, it's going to be additive. We've seen through the pandemic people want their own transportation, but we also think autonomous can play a role in personally-owned vehicles. And Kyle and I have discussed that. We think we could have personal autonomous vehicles as early as mid-decade. So it's going to be an exciting world.

And autonomous is critical. Because when you think about in the US today alone, over 90% of fatalities are caused by human error. An autonomous vehicle doesn't drive impaired.

It's actually paying attention. It knows all the traffic safety and road laws. So it's a different game from a safety perspective.

ANDY SERWER: But unfortunately, if there's ever an accident with an autonomous, that's going to get headlines. So you're going to have to deal with that, like robot crashes into-- we've already seen those stories.

MARY BARRA: Right. But one of the things that you see, first of all, we're committed to safety. And when you take General Motors' experience with safety working with crews, that's going to be an advantage. And also, with all the sensors, you're going to know exactly what happened.

ANDY SERWER: And final question, Mary, you mentioned you've worked at GM all those years, and you could look at that as an advantage or disadvantage. How is it that you're able to sort of transform the company being such an insider? What are the advantages and disadvantages of that?

MARY BARRA: Well, I think one of the clear advantages is I understand the company. I know the power of the team at General Motors and how committed they are, and I think we have the best team on the field. And then, we've brought in a lot of people from other industries. And so our leadership team has people from other industries.

You know, I think-- less than five years seniority as well, so they bring in other experiences. And we have a very-- I like to have constructive tension in the leadership team, where we're challenging each other and making sure we're getting everyone's perspective to make the best decisions. So I think it's an-- that can be an advantage as well.

ANDY SERWER: Mary Barra, CEO of GM, thank you so much for your time.

MARY BARRA: Thank you, appreciate it.

ANDY SERWER: You've been watching Influencers. I'm Andy Serwer. We'll see you next time.