GM CEO Mary Barra’s ties to Obama aren’t news. But even while financial regulators are pressured into punishing companies for not complying with environmentalist agendas, it’s GM’s environmentalist obsession under Barra that is hurting the company’s shareholders. GM, in typical Obama fashion, is implementing a doomed environmentalist agenda that is failing investors, employees and consumers.
The following week, GM publicly declared its belief in an “all-electric future,” marking a pivotal moment that would start the legacy automaker on its most ambitious shift since its founding in 1908.
GM’s stock that week jumped more than 11% to about $45 a share — marking the largest weekly increase at the time under Barra’s tenure as CEO. The gains would last only a few months but deepened executives’ conviction that they had picked the right path.
Last year, GM said it planned to invest $30 billion in electric vehicles by 2025, including to revamp existing plants, build U.S. battery plants and launch 30 electric models globally, such as the GMC Hummer EV.
“No one has as many vehicles as we are going to have by 2025,” Barra said in an interview with CNBC in January. GM has repeatedly stood by the goal.
How is that working out?
It is almost five years since GM made its big declaration, yet the numbers still aren’t in GM’s favor — at least not for the moment. Tesla still has a dominant 66% of the small but rapidly growing U.S. electric vehicle market, according to LMC Automotive, while GM has just 6%, as production has been slow to ramp up. It’s also being outsold by Ford and Hyundai Motor.
Overall, only 8% of GM’s sales are estimated to be electric vehicles. That’s including vehicles produced with Chinese joint ventures such as SAIC-GM-Wuling, which produces a small car that was the best-selling electric vehicle last year in China.
As anyone could have predicted.
CNBC blathers about the “small but rapidly growing U.S. electric vehicle market”, what it neglects to mention is that the market growth is almost entirely in the high-end luxury SUV category. Normal people can’t afford and can’t use and don’t want electric cars. Barra keeps trying to beat Tesla as its own game, and is not only losing, but betraying the ordinary car buyers who have been GM’s bread and butter. Barra slashed and burned the company to push it down an environmentalist dead end.
Under her tenure, Barra would ultimately slash headcount by 27% to 157,000 employees and dramatically shrink the company’s global footprint by exiting markets including Australia, Europe and Russia. The moves, made over several years, would prove to be deeply unpopular with politicians and the United Auto Workers.
“All that was about getting the company in better financial shape, in better operational shape, to be in a position to actually start then on the next journey,” said Patricia Russo, independent lead director of GM’s board of directors. She added that the board supports the changes Barra and her team have been making.
Which is why they also need to go.
There’s no “next journey.” Competing with Tesla, as Barra keeps promising to do, is a dead end. Tesla is only profitable because it resells emissions credits to companies like… GM. If GM were selling more electric cars, neither company would be making any money.
In late 2016, GM beat Tesla to the punch with its Chevrolet Bolt, which went on sale with a price tag of $37,500. But like GM’s similarly named Volt plug-in hybrid introduced several years earlier, the Bolt didn’t have the same cachet of Tesla’s cars, and its sales remain minimal.
Sure. It costs $37K, but it’s not a luxury car. Whereas Musk has used his reality distortion field to get people to treat Teslas like luxury vehicles.
Following a runup to more than $65 a share early this year, GM’s stock has been nearly cut in half to under $35 a share. The price once again marks a 14% decline under Barra’s tenure.
Obama is long gone. Why is Barra still here? More snake oil promises of electric car sales?
The promises of scale are nonsense because there’s no mass market for expensive electric cars. Instead of building its future, Barra has cannibalized GM chasing a market that doesn’t exist.
Next year could also bring another milestone for GM. If Barra, who lives in suburban Detroit with her husband, continues to lead the automaker through next summer, she would make history again by becoming its longest-serving CEO since Alfred Sloan, GM’s first CEO, who served for 13 years.
It’s another goal Barra seems confident she’ll hit.
As long as she does the bidding of Big Green, Barra will be allowed to continue destroying GM.