01/11/2019 | Press release | Distributed by Public on 01/11/2019 15:07
WHEN: Today, Friday, January 11, 2019
WHERE: CNBC's 'Squawk on the Street '
The following is the unofficial transcript of a CNBC interview with General Motors CEO Mary Barra and CNBC's Phil Lebeau on CNBC's 'Squawk on the Street' (M-F 9AM - 11AM) today, Friday, January 11th. The following is a link to video of the interview on CNBC.com: https://www.cnbc.com/video/2019/01/11/general-motors-mary-barra-cars-autos.html.
All references must be sourced to CNBC.
PHIL LEBEAU: Mary, let's begin first off. Your guidance - I think some people are going to be surprised that your -- in terms of your raising it, in terms of what you expected to exceed for 2018. That goes counter to what some people are expecting. Why? Why is that, that you guys exceeded what you originally gave as guidance?
MARY BARRA: Well, I think I'm really proud of the team. Because we really - and it's across the board, the team executed, we really worked. And this is a team that really strives to meet their commitments. And I also think that the foundation that we relayed in 2015, of continuing to strengthen the business, sometimes making the very tough decisions to make changes to make sure the core business is strong, as well as making those investments, from an EV, AV and connectivity perspective. I think we're seeing that strength. And I think to a certain extent, General Motors is uniquely position.
PHIL LEBEAU: You've strengthened the company overall, but in terms of the market out there, what are you seeing? Is it the strong demand for trucks, SUVs? What's driving that better than expected performance certainly in the second half of this year and as you head into '19?
MARY BARRA: Well, from an '18 perspective, again, it was not only a focus on really, you know, capitalizing on the new trucks that we have out there, the light duty trucks but also on cost reduction. So it was it was across the board. Every element of the company -- you know one of our philosophies is everything can be made better. And I think what we've been able to communicate related to '18 demonstrates that. And then in '19, we're really, really excited. Because we now we have a full year of light duty trucks. We'll be launching the heavy duties that we'll hit in the second half of the year. We've got a full year of the Chevrolet Blazer, a full year of the XT4 and then another very exciting Cadillac SUV that we'll be launching on Sunday. So we have a very strong product portfolio in the US market. We have a strong product portfolio coming in China. So when we look at that, that is going to help fuel our 2019 and supports our guidance.
PHIL LEBEAU: Are you worried about China overall as a market?
MARY BARRA: Well, you know, I think when you step back and look at China, we've been there for 20 years. We've had tremendous success. We have very strong brands. We think the trade talks that are going on now are very, very constructive. The fact that they even extended this first round to have more discussion, the next is already scheduled. We know there's discussion about durable goods stimulus in in-country that we think will, you know -- apply to autos. And then the fact that we've got 20 new either new or refreshed products coming out. We are positioned well. And, we're really taking a long-term view when we look at China. Because we think over next the few years that's a market that has the opportunity to grow to over 30 million units.
PHIL LEBEAU: But in the near-term, the consumer is clearly slowing down in some capacity in China. We heard about it from Apple, we've heard it from some other companies as well. Are you seeing that on the ground in China, that the consumer is slowing down?
MARY BARRA: Well clearly we saw that toward the latter half of 2018 and that's why we think 2019 will be about the same as 2018. And I think the factors that I just mentioned are positive and support that. And then again when you look at GM specifics, that's what gives us confidence. And our overall view of China has been incorporated into the guidance that we've provided.
PHIL LEBEAU: The plant closures, and capacity cuts. Do you expect any more, let's say over the next couple of years? Or do you believe that you've right sized it for where GM needs to be in the United States.
MARY BARRA: We believe that, you know, the difficult announcements that we made at the end of last year, as we look forward, we think those are the right decisions, and we think those are what we need to do. So I don't see additional changes needed to be made. So right now our focus is on the GMT members that have been impacted, and also the communities that have been impacted.
PHIL LEBEAU: You've got pushback, obviously, whether it's from Senators in Ohio, Congressmen in Ohio or elsewhere in Washington. Is there any chance that any of these proposed or planned closures or idlings, that it changes?
MARY BARRA: You know, these are things we need to do to strengthen the company. And when you look at General Motors overall, we need to make sure for the 100,000 employees we employ in this country alone, that General Motors is an entity that has not just a three or four or five year future, but has a three or four or five decade future, and beyond. And those are why we're making the tough decisions. But we're making it when the economy is strong, which gives, you know, people opportunities. And then even within our company, you know, we have because of the shift in customer preferences, we've had reductions in some of the passenger car market, but we're able to provide opportunities for these people in our crossover and our trucks plants. And that's why we really believe we're going to be able to place most of those. You know, with the announcement we made later in the year last year, of the 2800 employees impacted, we have 27 openings. So right now we're working through a plan for every person. We have 1500 of those employees who have already volunteered. We have 700 that are already in route. And so our focus right now is on each of those people. I think as we do that and then we work with the impacted communities, I think we can address the concerns, the appropriate concerns that were raised by Congress. And the administration.
PHIL LEBEAU: Let's talk about Cadillac, and your plans there with electric vehicles. Cadillac will get the first all-electric BEV when you guys finally roll that out. Can you give us any sense of what it will be, when we'll see this, and how do you feel about how Cadillac is going to be basically your lead when it comes to electric vehicles?
MARY BARRA: Well, we're very excited about that. And you'll hear a little bit more about that later today and get a glimpse of how we see the future. So I don't want to steal that away from Mark Reuss but I'm very excited about it. But we are committed to Cadillac. I think the electric vehicle portfolio is going to be very important to Cadillac, along with the very important SUVS that we are in the midst of launching right now. And when you look at Cadillac, it is our technology brand so I think it's appropriate as we really continue to advance and enhance our battery electronic technology, that Cadillac is the first brand - that it represents that.
PHIL LEBEAU: I know you're going to say that the Bolt in your opinion is a successful vehicle. But relative to the competition, people look at the Bolt and say it hasn't really lived up to expectations. Is the change with Cadillac being the lead with electric vehicles - is this your guys' way of saying we need to be more competitive on the premium side when it comes to electric vehicles?
MARY BARRA: I think from a Chevrolet Bolt EV building on the Chevrolet Bolt success that we have, those are some of the most satisfied customers. We are, you know, increasing production for that vehicle, and I think we have really learned a lot about what customers want, and really have addressed the range anxiety. And now are working on making sure we have the right charging infrastructure. So I think providing EVs for everyone, the Chevrolet Bolt has and will continue to accomplish that. But I think because of the advanced technology, that's why we want to start with Cadillac, our technology brand, and then you'll see us spread that across. So Chevrolet will continue to be strong in EVs.
PHIL LEBEAU: Couple last questions here. First one being, we're coming up on the five-year anniversary of you being the CEO of General Motors. When you took over, obviously you had some challenging times, but five years later, are you satisfied with your performance over the last five years?
MARY BARRA: We have much more work to do. Clearly, you know, we come in and work and focus every day on creating shareholder value and making sure that we're providing a sustainable General Motors for the long-term. We have much more work to do. So we've made progress but my focus is on the work we still have in front of us.
PHIL LEBEAU: But are you satisfied with your performance?
MARY BARRA: I'm never satisfied.
PHIL LEBEAU: And if you look back - if somebody said, 'Look the stock hasn't done anything over last years,' what do you say to that investor?
MARY BARRA: I share that frustration. And that's why we're working so hard to distinguish ourselves in the industry. And again, with the outlook we're able to provide because of the decisions and the actions that we have taken over the last few years, our investment in the future of technology. We're focused every day on providing shareholder value. And as I said, we have more work to do.
PHIL LEBEAU: And when do you think the shareholder finally gives you credit for the progress that you've made? Because not only you guys but the rest of the auto stocks, they've gone nowhere.
MARY BARRA: We're gonna work and continue to demonstrate that we're investing in the future. I mean, I think when you look at our EV technology which we've talked about, but our AV technology and what we've accomplished in Cruise, and you know, the unique way that we're going about autonomous vehicles -- that we have everything integrated and we're you know focused on safety, the speed of iteration. I mean I think there's a lot to be excited about it General Motors. We're gonna keep doing that. Focusing on the future. Focusing on the right things. And I think it will be recognized.
PHIL LEBEAU: And with regard to Cruise, I know you're going to talk more about that in a little bit. When do we see Cruise, first of all these vehicles out on the road and second of all, perhaps Cruise being spun off in some fashion?
MARY BARRA: Well what we've always said, and we are still focused based on our iteration and we will be gated by safety but we're moving as fast as we can to be able to really deploy driverless AVs in a ride-sharing environment. That is our continued focus. And as we do that, we will we will focus on what maximizes creating shareholder value. So I'm not going to give a definitive answer because we're in a, you know, a segment or an industry, a technology, that has much to still evolve. But we will do what maximizes shareholder value.
PHIL LEBEAU: But we do probably see it in some fashion this year - a launch of an autonomous ride-share?
MARY BARRA: Gated by safety, that's what we're working towards.
PHIL LEBEAU: And the last question is regarding the American consumer right now. What are you seeing out there, and what are you hearing back from your dealers in terms of the strength of the consumer, given the fact that we've seen slightly higher interest rates over the last year?
MARY BARRA: Overall, we're still seeing a very engaged consumer when we look at - you know, we look at a number of fundamentals, and we - those are still strong. And that's why we think we're going to have, in the United States this year, a market still in the low 17s which is a very strong market.
PHIL LEBEAU: Wonderful. Thank you, Mary.
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