We have been following General Motors ever since it popped up on Berkshires 13-F filings. It is a Ted Weschler pick, where Berkshire bought 10 million shares in 2012 and has steadily increased the position over time to about 72 million or so. They are the fifth largest shareholder.
One of us likes what Mary Barra, GM’s CEO, has been doing over there quite a bit (though we didn’t survey anyone else around here). She has sold off the Company’s endlessly unprofitable European division, focused on core lines and cost control, while also making significant inroads into autonomous driving (GM Cruise) and EVs. She also handled the ignition switch fiasco quite effectively. This is all worth talking about in a longer post on another day, but in the meantime we wanted to highlight a talk Marry gave at Stanford in 2017. It provides good insight into how she thinks about GM but also careers and life. She’s worth listening to.
-On blending tech high return world with low return slow world of autos - what are you most worried about? I’m confident we have good answers but will we get it to market fast enough. So constantly reemphasizing the speed, but yet – sometimes in an organization, especially an engineering organization will take you so literally that you have to make sure you are talking about safety. We want results but we want them with integrity. It’s about talking about behaviors but you put the two types of people together (traditional engineering and tech) and it can be really powerful.
-Career, should you have breadth or depth? – can you comment on the increasing push at the graduate and undergraduate level to focus (your career), to add value day one, etc? - it depends on the role. If you are the chief engineer of a vehicle that’s generally 15 years (of focusing) because the cycles of learning to integrate the systems of the vehicle. Integrating the powertrain group, electrical group, body group – they’re all coming together and (the chief) has to make those trade-offs. There’s certain areas where we need tremendous depth and this is one of them. And then there are areas where we need someone to say I understand this but understand the (horizontal). You need to make the trade-offs either (vertically or horizontally) and (as a company) we need both. As a mom (one child in college and one in high school) – how could you know at 16 what you want to do for the rest of your life? I’m not sure at age 55 what I want to do for the rest of my life. So I think there’s a need even in engineering to broaden your knowledge. I think it makes you a better engineer. It’s different once in your career. One of the most valued people when I was running the manufacturing engineering group was my welding expert. He has spent his career doing this and grew into the role – which is the kind of depth I am talking about. But he probably made that decision in his 30s and 40s not in high school or as an undergraduate. Even if you are sure you know what you want to do you should broaden and if you don’t know that’s okay. I came to GM thinking I was checking a box and I didn’t know what I didn’t know.
-Discusses Lyft. No one knows where auto companies will be in ten years. She thinks fleet first adoption of autonomous vehicles is the most likely case. Given you can (as a company) own the vehicles and limit locations driven, speed, and other factors while the technology is getting up to speed.
-EV – thinks about EV and fuel cells as obvious migration. Where will volumes come from? China is first and top of mind due to their push to regulate it – 10% requirement to be fully EV or plugin . Want to be the first OEM with EVs that are profitable and affordable.