Former General Motors CEO Cautions Apple on Car Making Business

Former CEO of General Motors Dan Akerson has said in an interview with Bloomberg that Apple should stay away from the business of making cars, and instead put its efforts into developing automobile electronics, amid numerous reports of Apple working on a secret car project. “I think somebody is kind of trying to cough up a hairball here,” Akerson said, adding that if he were an Apple shareholder, he wouldn’t be very happy.

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Akerson explained that the automotive industry with its regulatory and safety requirements, is way harder than people realize. “I would be highly suspect of the long-term prospect of getting into a low-margin, heavy-manufacturing business”, he said. For Apple, there’s more potential in teaming up with automakers to produce the electronic operating systems and entertainment equipment for vehicles. “I would’ve signed it over” to Apple, he said of his days as GM’s CEO. “I’d have turned over the infotainment and interconnectivity of every GM car”.

“Look at the margins of an iPhone versus a car,” he said. “I’d rather have the margins associated with the phone and produce” 74.5 million of the devices, as Apple did last quarter, he said.

“They’d better think carefully if they want to get into the hard-core manufacturing,” he said of Apple. “We take steel, raw steel, and turn it into car. They have no idea what they’re getting into if they get into that.”

Akerson led GM from 2010 until last year, when he stepped down to care for his wife. As CEO, he pushed the company to implement new technologies in its vehicles, including 4G broadband cellular service.

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  • Al

    I already said those things in a couple of earlier posts. Why didn’t they quote ME?

  • redrabbit333

    I kinda doubt Apple is going to end up selling a car but these comments from this guy are kind of stupid. Look at Tesla, brand new car company, growing much faster than expected and managing to do just fine. With all the money Apple has in the bank, they could easily bring in the right people to build car manufacturing facilities and people to run that arm of the business. It’s not like they’d just flip iPhone developers into car designers overnight!

  • I know right? Ridiculous!

  • Jake

    “is way harder than people realize”. STOP APPLE!!!! IT’S HARD! Please only do easy things. I also doubt we’ll see an Apple car anytime soon, but it definitely seems like an industry that needs sometime to innovate within it. Currently Tesla seems to be taking the lead, so why not apple if they think they can do something different and improve things overall.

  • Al

    Everything this guy says is bang on. The only odd thing is that he is actually entertaining the rumour that Apple may get into the car business.

    Tesla has been at it for over a dozen years, but have only just recently gotten to the point where their cars are consumer-ready. So it’s not exactly a brand new company. And they haven’t even put a tiny ding in the car industry, let alone a small dent.

    Yes, Apple could buy a small country and hire the population to build cars, but it would take them an extremely long time to recoup what they spent… unlike the sale of much more profitable devices.

  • Al

    Tesla has, by far, the most fascinating electric vehicles. But they are far from taking any sort of lead. Having said that, I think they are doing things right and headed in the right direction and, unless other car manufacturers smarten up, Tesla may eventually become a major player.

  • john

    So full of yourself eh 🙂

  • ShaBi

    Tesla was founded in 2003, that’s 12 years ago, not really new, and still not a big player yet either. They’ve only been doing better since Model S which went on sale only since 2012. They seem to be growing fast mostly because price of oil was raising fast in the past few years. Their value is not really the company as a whole, but their technology in electric motors and batteries. Tesla would have shut down many times, if Elon Musk didn’t completely devoted himself to the company and spending millions of his own money, and if there wasn’t a suddenly raised awareness of needing a solution to gasoline.