Launched in 1908, General Motors was once the paragon of American corporate might. Its brands are household names (Chevrolet, Cadillac, Buick, and more) that belong in any litany of U.S. icons. In the 1970’s, the gas crisis and the incursion of foreign brands like Toyota and Honda broke the hold GM, Ford, and Chrysler had on domestic car buyers. GM failed to heed the wake-up call. Arrogant leadership emphasized branding and marketing over automotive quality. They failed to address GM’s bloated bureaucracy. Innovation dwindled. Finally, in 2008 GM was forced into bankruptcy, and the U.S. federal government had to bail out the company. Another massive crisis arrived in early 2014, its new CEO, Mary Barra, announced that GM would recall hundreds of thousands of Chevy Cobalts, because of a faulty ignition switch. It would eventually recall 2.6 million vehicles. The switch has now been implicated in 139 fatalities, and GM has agreed to pay out nearly $1 billion to settle claims.
Despite the crises, General Motors has been clawing its way back to relevance. It has restructured, and is a somewhat leaner company than before bankruptcy (it still has 220,000 employees.) The quality of its cars is high once again, and the culture is changing. Barra uses the ignition switch crisis as constant reminder of what happens when safety is not prioritized. She has also acknowledged that the car business is about to change completely. Instead of buying a car, people (especially in cities) are likely to hail a car from an autonomous fleet of electric cars. Under Barra, GM has built, partnered, and acquired everything it needs to be a significant player in such a vision of the future of transportation. It’s a huge opportunity for GM, which gets its profits from the sales of trucks and SUVs to rural and suburban buyers.
The question for 2017 is simple: As it rolls out electric cars, car- and ride-sharing services, and autonomous vehicles, will GM secure its place as one of the most important companies in the new era of personal transportation? And can it do so while growing profits from its traditional business?