GM's Finances and Future
GM's stock was down last month [March], and estimates were not good for the rest of this year, even for 2009. Is there something you can do in IT to help? We already are. This business is running much more efficiently. Every year, this business is reducing cost. Billions of dollars have come out of the cost structure because of the process changes.
One issue is, is the United States going into a severe recession, and will it affect the rest of the world? Or does that not happen anymore? The other question is oil prices and how high they will go.Right now, we don't see the rest of the world affected by the U.S. problem. Most companies are looking for an improvement in the second half of the year. If that doesn't happen, then people will be really concerned. Some people are saying it's starting to look like it might not happen. That's the issue. What are we doing? Every part of our company has the ability to cut costs, thanks to globalization. So GM will continue to cut costs this year. We have the flexibility throughout the world to do that. Let's say you do have a recession in the United States and it doesn't affect the rest of the world. Maybe you then worry about getting vehicles to the other parts of the world. GM has the opportunity to do that. That's the benefit that IT has given the company. How do you sponsor new technologies such as social networks and blogging within GM? I have a chief systems and technology officer whose job it is to drive the next generation of technology development within the company. He has about 400 architects throughout the world. On Thursdays, they all link together. I have all the world's IT leaders bringing in new technology every day. If they have new technology, I know about it before anybody. I know all about AT&T's technology because I have their R&D people sitting here. I don't have to beg anybody to come there. They're already here. The trouble is I might get too much of that crap. We use wikis and blogs up the kazoo here. It's our 100th anniversary, and it's all being done electronically on blogs and whatever. I had a thing last year, where every company had to come in and give their vision for 2012. We have a portfolio of investment for information technology. The chief systems and technology officer has money to invest in small companies to bring in new technology. He is involved with venture capital companies like Kleiner Perkins [Caufield & Byers]. I have to be honest with you. It's been disappointing for those smaller companies until about a year ago. Because everyone was working on infrastructure integration, there weren't very many new transformational things coming out. Also, venture capitalists were moving away from IT innovation to other areas like alternative energy. Now, I'm starting to see it come back. Where would you place GM with regard to its competitors in terms of IT performance? Our IT costs as a percentage of revenue are one of the lowest by far. Ten years ago, we were the highest. In this model, I have 1,500 people that are top-notch business and IT experts. None of them code; they are IT brokers. They don't worry about having more computing centers-they have a different mentality just because of the model. If they had 1,000 programmers they would want to build new systems whether they changed the business or not. I've been around 40 years. I did the same thing. We're very, very low, and we need to be. At the same time, are we spending enough for innovation to change the business? Yes.
One issue is, is the United States going into a severe recession, and will it affect the rest of the world? Or does that not happen anymore? The other question is oil prices and how high they will go.