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On the Move

GM’s Dan Ammann leads automaker into new mobility era

By James Amend

Page 38

Dan Ammann is shifting General Motors into high gear with a strategy to turn the 107-year-old automaker into a global juggernaut for the new mobility era.

The multibillion-dollar plan, which started to take shape one year ago, will see GM add a suite of services focused on ride-sharing, ride-hailing and automated-driving technology to its century-old core business of designing, building and marketing cars and trucks.

“We think transportation as a service will become a significant part of our business in the future,” said Ammann, who joined GM in 2010 as a finance executive before rising to chief financial officer and, in 2014, company president. “In the urban markets in particular, people will want the convenience of having a car available, but without all the hassle of ownership.”

In the span of four months, the 44-year-old New Zealand native has tooled up three deals widely considered to be transformative for the company and seen putting it in the pole position among traditional automakers as the race to personalized transportation services and autonomous-vehicle technology intensifies.

In January, GM launched Maven, a personal-mobility brand and car-sharing service. The global team of 40 employees pulls talent from the connected-car industry and ride-hailing and car-sharing experts from the likes of Google, Zipcar and Sidecar.

Maven recently launched in Ann Arbor, and it will arrive in other U.S. cities and Europe as the year unfolds. Customers use the Maven application on their smartphones to locate and reserve a car, and the $6-an-hour fee covers fuel and insurance. Users can even activate the heat or air-conditioning in their reservation for a cozy interior at pick-up.

Also in January, GM invested $500 million in the San Francisco-based ride-hailing service Lyft. The long-term, strategic alliance includes a furthering of Lyft’s core business, as well as development of a fleet of autonomous vehicles. GM becomes the preferred provider of vehicles to Lyft, while the service’s drivers and customers gain access to the automaker’s connectivity services, such as OnStar. The sector already is booming, with companies such as Lyft booking 85 million rides annually as the mobility phenomenon spreads around the world.

GM added a third horse to its new mobility stable in March through the pending acquisition of Cruise Automation, a three-year-old San Francisco startup with particular expertise in highway modes of autonomy. Industry experts see the $1 billion addition accelerating GM’s work in the space and likely compelling rivals to make a similar move.

“We have not seen anyone else put all the necessary components together with large-scale industrial know-how of building and deploying large numbers of vehicles,” Ammann said. “We think we’re positioning ourselves quite well to have everything we need.”
But the flurry of activity sends another signal. It injects the famously staid GM culture with a dose of Silicon Valley mojo, wherein number crunchers take a back seat to innovators, and alerts rising tech talent that automotive is an emerging creative hotspot.

“It’s a platform for talent acquisition going forward,” he said. “We absolutely believe we need talent that’s different from what we’ve had historically.”

It’s an interesting time for automotive, Ammann added, because a host of other disruptive forces are reshaping the industry alongside new mobility. There remains pressure to slash emissions and improve fuel economy, heighten crashworthiness, reduce traffic congestion and mitigate the cost of ownership on an expensive asset that sits in the driveway 90 percent of the time.

“All those things are contributing to the growth, for example, of ride-sharing, which is an example of where assets are getting more utilized,” Ammann said.

Expect Michigan to play a major role in GM’s future. The automaker employs nearly 32,000 people directly in metro Detroit.

“The center of gravity of our business continues to be in Michigan,” Ammann said. “It’s the center of a lot of our technical work. I don’t see any of that fundamentally changing.”

However, Ammann, a certified racecar driver, does suggest buckling up for what will be a wild ride for the auto industry.

“We’ll see more change in the next five years than we have seen in the last 50,” he said. “No question.”

James M. Amend is a senior editor at WardsAuto.com in Southfield, MI