Jun 17, 2019

Exclusive: GM CEO Mary Barra on the painful jobs transition

GM CEO Mary Barra says the company will need to relocate workers to keep them in the family as part of its long-term vision for an electric, self-driving future. "I want to make sure this company is not around for the next five years but the next 50 and beyond," Barra tells "Axios on HBO."

Why it matters: With contentious labor talks looming this summer, Barra's challenge is to convince longtime autoworkers that her plan to divert resources toward unproven future technologies won't put their livelihoods at risk.

The big picture: After more than 100 years, automobiles are shifting away from gasoline, steering wheels and personal ownership.

  • It's a perilous transformation for an iconic company like GM, which needs to keep pumping out profitable trucks and SUVs so it has the capital to keep pace on innovation with new competitors like Tesla and Google.

But it's a painful transition that is already affecting thousands of American jobs.

  • Last November, GM let go of 15% of its white-collar workers, about 8,000 people, even as its Cruise self-driving unit in Silicon Valley is doubling its software and engineering staff to 2,000.
  • About 6,000 factory jobs were also cut, as GM said it would halt production at three car assembly plants and two transmission factories in the U.S. and Canada.
  • The actions drew angry tweets from President Trump, who complained "The U.S. saved General Motors and this is the THANKS we get!", a reference to the $50 billion government bailout of GM in 2009 during the depths of the economic crisis.
  • The UAW filed a federal lawsuit against GM, which is pending.

Yes, but: Lost amid the headlines, Barra says, is that GM took the actions when the economy is strong and most of those factory workers have been offered jobs in other GM plants.

  • "Sometimes it's up the road or down the highway, and some are a little bit longer move. But we want every GM employee to stay with us. In some cases it's a different location."
  • GM is in talks to sell its Lordstown, Ohio, factory to Workhorse Group, a startup that makes electric trucks for customers such as UPS, DHL and, potentially, the U.S. Postal Service. The UAW worries the deal wouldn't provide the same job security to union workers.

What to watch: GM is shifting its entire vehicle lineup to electricity, which means instead of gasoline-powered engines and transmissions, it will need to produce more battery packs and electric drivetrains.

  • GM says it will introduce 20 new electric vehicles by 2023. Many of those will be built and sold in China, where GM is a major player and the government is aggressively pushing EVs.
  • "But there's a very robust plan for the United States as well. So there'll be more opportunities as we move forward," says Barra.
  • So far, GM has only announced one: a new Chevrolet EV that will be built in Michigan, attracting $300 million in investment and 400 new jobs.

The bottom line: It's a glimmer of hope for a union that has been decimated by globalization and technology transformation for decades. "We have to be prepared for the future. We can't pretend it's not coming," says Barra.

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