GM CEO Address Chicago Economic Club
Thank you for that kind and generous introduction. And thank you for the opportunity to speak with you tonight.
An exciting new era of change is sweeping the global automotive industry. In fact, I believe the industry will experience more change in the next 5 years than it has in the last 50 years.
I don't make this claim lightly. I believe we are on the verge of a revolution in personal transportation.
And the impact on every company in the industry, every urban center and hundreds of millions of consumers will be profound.
There are roughly 30,000 parts in the typical automobile and virtually all of them are being reconsidered and reimagined. Every assumption and industry norm are being challenged. Different fuel sources; new propulsion systems; lighter, stronger materials; reduced environmental impact; connectivity preferences; ownership options; even the right to drive in congested urban areas are just a few examples of the reinvention process that's underway.
It is impossible to overstate the magnitude of change I'm talking about. Some of the examples that I will reference tonight may sound like long-term science projects. They aren't. They are real...and imminent. They are also daunting, challenging...and incredibly exciting.
The auto industry is exploding with creativity, innovation and competition. I have been in the industry for more than 30 years and this is by far the most exciting time. Looking across the business landscape, there isn't any place I would rather be right now. I love the opportunities this era of change presents.
It motivates the GM team every day… because we know we have a chance to make an important difference in the lives of millions of people.
Just a few years ago, if I had polled this audience, and asked you to pick an industry that best represented the 20th century, many of you likely would have selected the automotive sector. And GM probably would have been the example a lot of you would have identified.
Conversely, if I had asked you to pick the model industry of the early 21st century, you undoubtedly would have chosen the technology sector. Apple, Google, Samsung and Amazon would be likely examples.
As I stand here tonight, however, perceptions are beginning to shift. Interest in the auto sector is growing in many quarters. The technology industry, in particular, is becoming more engaged because they realize that cars are the ultimate mobile app. I am glad our industry is attracting so much attention and I am excited about the coming advancements in cars.
At GM, we have made it clear to our shareholders, our dealers and our employees that we want to build the most valued automotive company. Second place is not our aspirational goal. We want to win. We want to lead.
A key element of driving that value, and the basis for our future growth, includes investment in technologies -- technologies that provide direct benefits to customers and solid returns for our shareholders.
GM’s investment in the technologies of tomorrow is consistent with the announcements we made earlier this week on a comprehensive capital allocation strategy, focused on solid business performance, rigorous capital discipline and increased returns to shareholders.
In our announcement, we committed to a share buyback program totaling \\$5 billion before the end of 2016. Combined with our \\$9 billion per year investment in new products and advanced technologies, we are delivering on our plan to win - for our customers, our shareholders, our partners and our employees.
We are making these investments because we believe strongly in the future of the industry and the future of GM. The fact is this is a growth industry.
Given the traffic that we all deal with on a daily basis, it may seem hard to believe, but the vast majority of the world does not own a car. And demand for automobiles is exploding across Asia, Africa and South America. The market will also continue to be strong here in the U.S.
Our job at GM is to make sure we are properly positioned to take advantage of the surging demand for personal transportation. So before I talk further about the technology revolution, I want to briefly highlight three critical strengths of the company.
First, we have scale and resources.
If you don't currently own a GM vehicle and haven't bought one in years, you may have an outdated image of our company. In 2015, we expect to sell nearly 10 million vehicles around the world. This would be the most in our 110-year history. That's more than 1,000 new vehicles sold every hour, 24 hours a day.
To produce that volume, we have more than 170 manufacturing plants in 31 countries. And, we purchase more than \\$400 million of goods and services... every day.
Second, with 216,000 employees we have a tremendous base of talent. As an engineer, I am biased, but I think the technology race will be led by STEM professionals. At GM, we have nearly 37,000 engineers and other technical resources who are working every day to invent transportation solutions for tomorrow.
My primary focus at GM is to build an environment where employees feel motivated and empowered to be creative. As a long time GM employee, I know both our strengths and our weaknesses. I'm determined to see the full potential of our talent and resources unleashed.
A stronger, more dynamic and more creative GM will deliver great value for customers, shareholders and for hundreds of thousands of villages, towns and cities around the world.
As an engineer, I am trained to focus on facts and data. In the world of science and math, ambiguity is the enemy. I always want to know the facts and I believe in measuring outcomes. To that end, we know that our processes and systems have to produce superior results. And our technology solutions have to meet and exceed consumer expectations. We get this at GM and we are determined to deliver.
A third strength of GM is our long record of innovation. From the first electric starter to the first crash dummy. To the EV1 to the Volt. To the most fuel cell powered miles driven in the industry. To OnStar and 4G LTE, and countless more examples, GM has always played a leading role in revolutionizing the automobile.
Consider 4G LTE. It's a powerful proof point of our commitment to put the customer at the center of everything we do. We are installing 4G LTE on 30 vehicles, the broadest deployment in the industry. The service will include a built in Wi-Fi hot spot capable of pairing up to seven devices.
Most significantly, it enhances the connection to OnStar, making it the best in-vehicle safety system available from any manufacturer.
But the competition in this industry is fierce and getting stronger every day. In fact, this is one of the rare times in the history of the industry when virtually every auto company is profitable. As you would expect, confidence is running high among all of our competitors.
Success for GM or any auto company is far from certain. But I am certain we have what we need to become the most valued auto company in the world. The history of our industry shows that consumers will spend their money with the companies that design, engineer and manufacture vehicles that give them the best possible value, safety and reliability.
Our mission at GM is to earn customers for life. We want to give every customer a great experience not just the day they buy a car, but in the process leading up to the purchase, and for as long as they own their vehicle.
If we deliver this level of ultra-attentive customer service, along with the kind of technology breakthroughs we know are coming, we will be recognized and rewarded in the marketplace.
Some of the transformative changes I’m talking about include: electric powered vehicles, autonomous vehicles and enhanced connectivity.
Think about your own driving experience. It wasn't long ago that we all thought 30 miles per gallon was a great milestone. And for certain types of vehicles it is. But consider the Chevrolet Volt.
We have sold approximately 75,000 Volts and we know from vehicle data that the typical Volt owner goes 900 miles between fill ups at the gas station. Remarkable, yes, but it is the norm for the Volt. We expect the next generation Volt to go more than 1,000 miles between fill ups.
At GM, we continue to believe strongly in the future of electric vehicles. In fact, in January I revealed a concept car at the Detroit auto show, the Chevrolet Bolt.
It is an all-electric, family vehicle that will go 200 miles on a charge and cost roughly \\$30,000. We think it's going to be a game changer. Last month at the Chicago Auto Show, we announced that – in cooperation with our UAW partner – we will build the Chevy Bolt at our Orion Township plant in Michigan.
But electric is only part of the answer. It's likely that numerous propulsion systems, from any number of companies, will continue to advance - hybrids, fuel cells, diesels, to name a few. And the internal combustion engine is far from dead.
Looking forward, there is a lot we don't know, but we do know this - we will continue to increase the fuel efficiency and reduce the environmental impact of vehicles beyond anything anyone imagined even a few years ago.
I suspect many of you are wondering about the buzz about autonomous vehicles. Are we really going to have driverless cars? Some would say a lot of consumers believe we are already there. Just think how many people you have seen texting and driving. Or reading and driving. Or applying make-up and driving. Or eating meals and driving.
This is not the recommended type of autonomous driving I'm talking about. The technology I envision, that we and other companies are working on now, will be a lot more advanced, and a lot safer.
The most important point you should remember about autonomous vehicles is that they are coming - and fast. The technological foundation for autonomous vehicles can be seen in cars today - adaptive cruise control, lane changing warnings, front and rear cameras, to name just a few.
In less than two years we are going to start connecting cars to each other, and the world around them, using wireless technology called V2X.
V2X encompasses both vehicle-to-vehicle and vehicle-to-infrastructure technology. It's a game changer for safety, because when enough cars share information about such factors as speed, direction, and braking, crashes will be substantially reduced. This is reality. It is not science fiction. It is not a pipe dream. It is here. We know how to do it. And it will transform the industry in the coming years.
The investment will be substantial for governments at every level, the automotive industry and endless related businesses. That’s why a comprehensive capital allocation strategy is critical. And building this infrastructure will certainly take time. But the savings in accidents, economic loss, congestion, environmental impact...and, most significantly, in injuries and fatalities…will be extraordinary.
Cadillac is taking the lead for the company with this technology. The 2017 Cadillac CTS will be the first GM vehicle with V2X technology. I believe it will also be a first for the industry.
We are currently working with the State of Michigan and the University of Michigan to create more than 100 miles of V2X-enabled corridors in the Detroit area. This test program is the largest of its kind in the world.
Over the past year, my work has taken me to many of the world's great cities - New York, Berlin, Beijing, New Delhi, S?o Paulo. The differences culturally, economically and politically are significant. But so are the similarities. All great cities, like Chicago, are striving to be more livable. To be more secure. To be more prosperous. To be more welcoming.
You are lucky to live in one of the greatest cities in the world. Chicago is an American treasure. But everyone in this room wants more for Chicago. For your children and for future generations...you want to build a better city.
At GM, building better cities and a better world through improved transportation options, is part of our core.
Personal transportation means freedom. It means economic advancement. And it means connected families and communities.
But think what we can do with a world of safer vehicles. Vehicles that use less fuel. That have less environmental impact. That are programmed to prevent accidents and reduce congestion.
The goal at GM is to be the clear leader in this era of transformational change. I believe in our team and I believe in our technology. And I am committed to results…results that serve our customers across the globe. Results that change how the automobile is used. Results that deliver to our shareholders.
I know I speak for every GM employee when I say it is an honor to be in this business at this time. We are excited about the future. More than excited, we are inspired.
It was a privilege to be here tonight. Thank you for sharing your evening with me.
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