UP.
WE KICK IT OFF WITH THIS STORY
RIGHT NOW, THAT IS GENERAL
MOTORS.
IT HAS AD PLANS TO CLOSE PLANTS
IN OHIO, MICHIGAN AND MARYLAND.
IT WILL LEAD TO THOUSANDS OF
LAYOFFS.
PRESIDENT TRUMP SPOKE OUT ABOUT
THE NEWS WITH TOUGH TALK FOR
GM'S CEO, MARY BARRA.
>> I SPOKE WITH HER WHEN I HEARD
THEY WERE CLOSING AND I SAID YOU
KNOW, THIS COUNTRY'S DOUBLE A
LOT FOR GENERAL MOTORS.
YOU BETTER GET BACK IN THERE
SOON.
THEY SAY THE CHEVY CRUZ IS NOT
SELLING WELL.
I SAY WELL, THEN GET A CAR THAT
IS SELLING WELL AND PUT IT BACK
IN.
SO I THINK YOU'RE GOING TO SEE
SOMETHING ELSE HAPPEN THERE.
BUT I'M NOT HAPPY ABOUT IT.
MARIA: JOINING US RIGHT NOW IS
KELLY BLUE BOOK EXECUTIVE
ANALYST, REBECCA LINDLEN.
GIVE US THE IMPACT FROM YOUR
STANDPOINT ON THESE LAYOFFS AND
PLANT CLOSINGS AT GM.
>> WELL, THANKS FOR HAVING ME
ON.
IT'S REALLY UNFORTUNATE AND MY
HEART GOES OUT TO THOSE PEOPLE
THAT ARE LOSING THEIR JOBS AND
THAT ARE BEING LAID OFF
ESPECIALLY AT THIS DIFFICULT
TIME.
I THINK THAT IT'S IMPORTANT TO
REMEMBER, THOUGH, FROM AN
INVESTMENT STANDPOINT THAT WHAT
GENERAL MOTORS IS REALLY DOING
IS SHIFTING EXPERTISE.
THEY ARE MOVING PEOPLE TO PLANTS
THAT ARE PRODUCING VERY WELL
SELLING VEHICLES.
THEY HAVE THE NEW CHEVY BLAZE
RER COMING OUT
RER COMING -UT
RER COMING --T
RER COMING -- BLAZER COMING OUT.
THEY'RE FILLING IN THE PORTFOLIO
TO REFLECT CONSUMER DEMAND.
THEY'RE ALSO HIRING A LOT OF
TECHNOLOGY PEOPLE.
SO IT'S PEOPLE WITH DIFFERENT
LEVELS OF EXPERTISE AND
DIFFERENT SKILL SETS, AS MARY
GETS PREPARED TO EVOLVE THIS
COMPANY.
YOU KNOW, SHE'S BEEN WITH GM FOR
30 SOMETHING YEARS AND SHE HAS
BEEN THROUGH THE REALLY BAD
TIMES THIS COMPANY WENT THROUGH
AND SHE'S DETERMINED TO NOT MAKE
MISS A TAKES FROM THE PAST AND
TO SET THE COMPANY UP FOR
SUCCESS.
>> REBECCA, TALK ABOUT THE
TRANSITION YOU'RE SEEING.
YOU'RE SEEING A LOT OF
AUTOMAKERS RESPOND TO
COMPETITION FROM GOOGLE, TESLA,
YOU KNOW, GOOGLE'S WAYMO
DIVISION ABOUT ELECTRIC CARS AND
SELF-DRIVING CARS.
TALK ABOUT HOW THAT'S EVOLVING
IN THE INDUSTRY, HOW QUICKLY
IT'S MOVING AND IF THAT'S THE
RIGHT DIRECTION TO GO.
WE WERE DISCUSSING EARLIER ON
THE PANEL HOW ELECTRIC CARS
REALLY FELL FLAT EARLIER IN THE
DECADE.
>> WELL, WE'VE SEEN TREMENDOUS
CHANGES IN ELECTRIC VEHICLES,
EVEN FROM GENERAL MOTORS.
I WAS DISAPPOINTED THE VOLT WAS
PART OF THE CANCELLATION BECAUSE
I DO LOVE THAT COMBINATION OF
ENGINE PLUS BATTERY.
BUT THE REALITY IS THAT THE NEW
VEHICLES, LIKE THE CHEVY BOLT,
THAT IS A TREMENDOUS VEHICLE
THAT HAS OVER 230 MILES OF
RANGE.
SO YOU DON'T REALLY NEED THE GAS
ENGINE OF THE VOLT.
SO I THINK THAT WHEN WE THINK
ABOUT WHERE BATTERY TECHNOLOGY
IS GOING, IT MAKES SENSE THAT
YOU DON'T NEED THE
HYBRIDIZATION.
IN TERMS AUTONOMOUS OR
SELF-DRIVING CARS, I THINK WE'RE
A LITTLE AHEAD OF THE GAME IN
TERMS OF DEMAND BUT THAT'S ONLY
BECAUSE WE NEED FIVE TO SEVEN
YEARS TO REALLY BRING OUT THE
TECHNOLOGY THAT WE NEED FOR TRUE
SELF-DRIVING OR LEVEL FIVE
VEHICLES THAT CAN JUST DRIVE
THEMSELVES, VEHICLES THAT GOOGLE
IS WORKING ON.
SO WE WILL START TO SEE
INCREASING DEMAND FOR ELECTRIC
VEHICLES, FOR ELECTRIFI
DEPARTMENT VEHICLES BECAUSE OF
CONSUMER DEMAND.
THOSE PEOPLE THAT EXPECT THEIR
VEHICLES TO BE ENVIRONMENTALLY
FRIENDLY AREN'T IN THE
MARKETPLACE YET.
THEY WILL BE VERY SOON AND
GENERAL MOTORS HAS TO BE
PREPARED.
SO THEY'VE DONE THINGS LIKE
SPEND $1 BILLION ACQUIRING
CRUISE AUTOMATION AND WE'VE SEEN
SIMILAR INVESTMENTS FROM
COMPANIES LIKE FORD MOTOR.
SO IT'S JUST AN EVOLVING -- IT'S
AN EVOLVING MOBILITY AS A
SERVICE AND THAT'S WHAT MARY'S
REALLY TRYING TO SET THE COMPANY
UP IN ORDER TO LEAD IN THAT
SPACE.
>> REBECCA, DAGEN AND LINDSEY
WERE TALKING EARLIER ABOUT
INTEREST SENSITIVE SECTORS.
WE'VE SEEN A SLOWDOWN IN THE
HOUSING SECTOR.
AUTOS ARE AN INTEREST SENSITIVE
SECTOR.
HOW DO YOU SIZE UP CONSUMER
DEMAND FOR CARS RIGHT NOW?
ARE RISING INTEREST RATES HAVING
ANY IMPACT ON DEMAND AND DOES
THAT PLAY ANY ROLE IN WHAT
YOU'RE SEEING AND WHAT YOU SAW
GM DO YESTERDAY?
>> YOU KNOW, JOHN, I DON'T THINK
THAT WE'RE REALLY SEEING A
PULLBACK IN CONSUMER DEMAND.
THE AUTOMOTIVE FORECAST IS FOR
OVER 17 MILLION UNITS IN 2018
WHICH IS REALLY AT THE TOP RANGE
OF WHAT WE HAD ESTIMATED.
SO WE'RE STILL SEEING CONSUMER
DEMAND.
WHAT WE'RE SEEING IS A
LENGTHENING OF LOAN TERMS WHICH
HAS ME A LITTLE BIT CONCERNED AS
CONSUMERS MOVE TOWARDS A 65, 72
MONTH LOAN TERM.
THEY'RE GOING TO OWE MORE ON
THEIR VEHICLE THAN IT'S WORTH
FOR A LONGER PERIOD OF TIME.
BUT WHAT WE'RE REALLY SEEING AND
WHAT'S REALLY DRIVING MARY'S
DECISIONS ABOUT SPECIFIC PLANTS
IS THAT WE ARE NOW AT 70% CAR
AND TRUCK SPLIT.
SO WHEN WE TALK ABOUT TRUCKS,
WE'RE TALKING ABOUT SUVS,
CROSSOVERS, PICKUP TRUCKS,
MINIVAN, ALL OF THAT IS 70% OF
THE MARKET WHEREAS JUST A FEW
YEARS AGO IN 2013 THAT WAS 50%
OF THE MARKET.
SO WE'RE JUST SEEING CONSUMERS
SAYING I WANT A UTILITY VEHICLE,
I WANT SOMETHING THAT MEETS A
VARIETY OF NEEDS AND THEY'RE
GETTING THAT IN THEIR SUVS AND
CROSSOVERS AND THEY'RE NOT
FINDING THAT IN CARS.
DAGEN: SOME OF THE CROSSOVERS
ARE LIKE CARS, QUITE FRANKLY.
THEY'RE SMALLER IN SIZE.
I THINK IF IT'S A DIFFERENCE
BETWEEN AN IMPALA AND LIKE A
SMALLER SUV, THEN THAT'S REALLY
NOT A BIG LEAP.
I WANT TO ASK YOU, DO YOU THINK
-- DID THE TARIFFS ON STEEL AND
ALUMINUM PLAY INTO THIS
COST-CUTTING MOVE BY GENERAL
MOTORS?
WILL WE SEE SIMILAR COST-CUTTING
MOVES FROM OTHER AUTOMAKERS LIKE
FORD?
>> YES, I DO THINK -- DAGEN, I
DO THINK THE TARIFFS HAVE PLAYED
INTO THIS.
THE AUTOMOTIVE INDUSTRY IS NOT
FLEXIBLE.
WE DON'T HAVE THE ABILITY TO
SIMPLY CHANGE PLANTS OR TO MOVE
A PLANT.
THESE ARE DECISIONS THAT HAVE
BEEN MADE YEARS IN AD VANS --
ADVANCE AND BILLIONS OF DOLLARS
HAVE BEEN INVESTED.
IT'S NOT EASY TO SAY WE WON'T
MAKE THIS IN MEXICO, CANADA OR
KOREA ANYMORE WHERE GM RECENTLY
CLOSED A PLAN.
THESE DECISIONS HAVE BEEN MADE
YEARS AGO AND TO SUDDENLY HAVE
SIGNIFICANT TARIFFS ON REALLY
DOES IMPACT YOUR BALANCE SHEET.
AND IT IMPACTS THE PROFITABILITY
OF THESE VEHICLES AND MARY'S
VERY SENSITIVE TO THAT.
SHE'S VERY SENSITIVE TO WHETHER
THESE VEHICLES MAKE A PROFIT OR
NOT.
MARIA: WHAT'S YOUR TAKE,
REBECCA, ON THIS NISSAN CARLOS
GOEN STORY.
THE CEO IS SAYING THE CHAIRMAN
HAD TOO MUCH POWER, A WEEK AFTER
HE WAS ARRESTED ON CHARGES FROM
ANONYMOUS SOURCE THAT'S HE
UNDERSTATED HIS PAY OVER FIVE
YEARS.
SPEAKING OF SUPPLY CHAIN, HE WAS
ABOUT TO CHANGE THE SUPPLY CHAIN
BY MERGING RENAULT AND SUNNY
BY MERGING RENAULT AND NUNNY
BY MERGING RENAULT AND NISNY
BY MERGING RENAULT AND NISSAN.
HE TOOK ON AN INCREDIBLE AMOUNT
OF EXPENSE WITH THE ALLIANCE.
WHAT'S YOUR REACTION TO WHAT
HAPPENED HERE?
>> LIKE EVERYBODY, I WAS
ABSOLUTELY SHOCKED.
I MEAN, BUT WHAT WAS INTERESTING
IN THAT INITIAL PRESS CONFERENCE
THAT THEY HAD LAST MONDAY, THE
CEO JUST -- HE VERY MUCH FOCUSED
ON THE POWER THAT MR. GOEN HAD.
THAT WAS A THEME THROUGHOUT AND
IN HIS MIND OBVIOUSLY THEY
WANTED TO DO SOMETHING DIFFERENT
AND THEY FOUND A WAY TO DO THIS.
SO I THINK IT'S SHOCKING.
I DO HOPE THE ALLIANCE CONTINUES
BECAUSE AS YOU SAID, THERE'S
SIGNIFICANT COST-CUTTING
OPPORTUNITIES HERE THAT COULD BE
REALIZED IF THEY CONTINUE THE
ALLIANCE.
MARIA: ANY THOUGHTS ON TESLA,
REAL QUICK, BEFORE YOU GO,
BURNING ALL THAT CASH.
DO YOU THINK TESLA WILL THRIVE
AT SOME POINT FINANCIALLY OR
NOT?
>> I THINK THAT TESLA WILL.
I THINK THE CONSUMER IS LOOKING
FORWARD TO NEW PRODUCTS FROM
TESLA.
MARIA: REBECCA, GOOD TO SEE
YOU.