Retired GM chief Dan Akerson likens rumored Apple car program to 'trying to cough up a hairball'

Posted:
in Future Apple Hardware edited February 2015
Following a five-year run in Detroit that saw him inexplicably chosen to oversee General Motors, longtime telecom executive Dan Akerson has elected to weigh on in Apple's possible entry into the carmaking arena, saying that Cupertino has "no idea what they're getting into."




"I think somebody is kind of trying to cough up a hairball here," Akerson told Bloomberg. "If I were an Apple shareholder, I wouldn't be very happy. I would be highly suspect of the long-term prospect of getting into a low-margin, heavy-manufacturing business."

GM's gross margin for the fourth quarter of 2014 was just over 11 percent -- compared to nearly 40 percent for Apple - but Akerson was even more harsh in his assessment of Apple's manufacturing expertise.

"[Apple] better think carefully if they want to get into the hard-core manufacturing," he added. "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's comments are somewhat bizarre, given Apple's reputation for diving deeply into the development of materials and processes used to manufacture its devices. The forthcoming Apple Watch Sport, for example, uses ion-strengthened glass thought to have been developed in-house.

GM is no longer a vertically-integrated company, either. Much of the "raw steel" the automaker turns "into car" is supplied by European materials giant ArcelorMittal.

The auto industry has been aflutter since rumors of an "iCar" began to gather steam earlier this month. Apple was outed as the operator of a fleet of sensor-laden minivans that have been crisscrossing the country in recent months, a finding which sparked two separate reports of an early-stage Apple vehicle development program.

Apple spun up a "top secret research lab" for the project last year, the Financial Times said, kicking off the free-for-all. Design czar Jony Ive is believed to have personally recruited automotive executives, and the company is known to have offered massive bonuses and substantial pay raises to employees of electric carmaker Tesla.

The Wall Street Journal weighed in later, claiming that Apple CEO Tim Cook gave the go-ahead for iPod and iPhone designer Steve Zadesky to assemble as many as 1,000 workers to make an electric car. Zadesky's group is though to be researching "robotics, metals and materials consistent with automobile manufacturing."
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Comments

  • Reply 1 of 143
    Yeah, I'm sure the telecom industry said the same thing when Apple decided to make a phone in-house.
  • Reply 2 of 143
    A couple points to comment on...first, are we 100% sure Apple is getting into this full tilt? Second has this guy seen what Apple has done with every segment they go into? They turn low margin, average industries into high margin lucrative ones...when you see a guy like this make comments that are so off mark it boggles my mind that they make it into upper management of large corporations...
  • Reply 3 of 143
    I suspect this is a dashboard play and/or a foray into self driving vehicles. For some strange reason I feel a Mobileye acquisition in the wings. I note in the previous AI story Tim Cook is headed to Israel. Hmm, how convenient!
  • Reply 4 of 143
    He looks a little bit, and sounds a little bit, like Ballmer mocking the iPhone way back...
  • Reply 5 of 143
    sflocalsflocal Posts: 4,492member

    I still don't think Apple is building a car.  Maybe some systems for one but not an iAuto.



    That being said, this guy comes across like that idiot CEO at Blackberry when the iPhone was introduced.  Whatever Apple does, I'm sure it will be pie in this guy's face.



     

  • Reply 6 of 143

    I think he's attacking a straw man. 

     

    If an Apple-designed car ends up being manufactured, it is a safe bet that it will be produced, marketed, and monetized in a very different way than how GM operates. 

     

    My pet theory is that Apple won't sell cars at all. Instead, I speculate that they will provide transportation as a service/accessory to iPhone users. In other words, Apple will provide a car service for iPhone users that uses cars designed by Apple (but manufactured by a contract manufacturer). There will be no Apple analog of a Chevy dealership. 

  • Reply 7 of 143
    rob53rob53 Posts: 2,007member
    Comments coming from a company bailed out by taxpayers producing cars that were recalled. Who cares what he says. GM stinks.
  • Reply 8 of 143
    Quote:


     Following a five-year run in Detroit that saw him inexplicably chosen to oversee General Motors,


    He was a government appointee to a formerly private business, of course it didn't make sense.

     

    That being said, I'm not sure GM knows how to make cars either, so what's he going on about?

  • Reply 9 of 143
    Isn't this what all the telecom companies said about apple entering a phone business?
  • Reply 10 of 143
    Looks like I can be a CEO as well one day. I mean, look around, how good do you need to be¿
  • Reply 11 of 143

    I'm thinking a company that has revolutionized several devices in the last few decades can probably do most things it sets out to do successfully. I wouldn't underestimate a company with ambition, clout and $700 billion dollars of cash in the bank. Just saying.

  • Reply 12 of 143
    GM's gross margins are 11%. GM's product mix is heavy on low margin mid-price and economy cars. Probably not the market Apple would target, if they did target the auto industry.
  • Reply 13 of 143

    looks and sounds a lot like Steve Ballmer

  • Reply 14 of 143

    Maybe they won't need a taxpayer bailout.

  • Reply 15 of 143
    The fact that cars are still using steel and fuel is the same reason Tesla and Apple can be very successful. I don't personally see Apple going all in with their own car but if they were to do it, with the industry being what it is, right now is as good a time as any.
  • Reply 16 of 143
    Quote:

    Originally Posted by jkichline View Post

     

    I'm thinking a company that has revolutionized several devices in the last few decades can probably do most things it sets out to do successfully. I wouldn't underestimate a company with ambition, clout and $700 billion dollars of cash in the bank. Just saying.




    They don't have 700B.  170 more like it.  It's still a lot.  About 10 Ford class supercarriers.

  • Reply 17 of 143
    calicali Posts: 3,495member
    None of the rumors are confirmed.

    It's stories like these(trash talk) that make me believe Apple is building a car.

    Fear comes before the storm.

    iPhone, iPad, ?Watch
    thrang wrote: »
    He looks a little bit, and sounds a little bit, like Ballmer mocking the iPhone way back...

    I thought it was Ballmer!!

    But my point exactly.
  • Reply 18 of 143
    jd_in_sbjd_in_sb Posts: 1,483member

    It's amazing how much rumor and speculation has been generated from a single photo of a van with gadgets on the top. I wouldn't be surprised if Samsung preemptively launches a Samsung Galaxy SmartVan before the year is out.

  • Reply 19 of 143
    slurpyslurpy Posts: 5,115member
    Quote:

    Apple] better think carefully if they want to get into the hard-core manufacturing," he added. "We take steel, raw steel, and turn it into car. They have no idea what they're getting into if they get into that.


     

    It's so cute that this guy is so concerned about protecting Apple from entering their doomed business. Nice to know he's looking out for their best interests. If he ACTUALLY believed they would fail and did not see them as a threat, he would welcome their entry, not give a million reasons why it's such a horrible, horrible idea. 

     

    Or, he can just keep his fucking mouth shut and not sound like a moron, as noone has a clue if Apple is even considering entering that business. And IF they do, they don't need this tool to advise them to "think carefully" about it, or inform them that *OMG* metal is used to make cars. I'm sure after hearing this new information, Apple have changed all their plans and went back to the drawing board. The guy sounds hysterical. 

  • Reply 20 of 143
    Can Apple turn the 21st century horse into a car?

    I don't know.

    We've seen Apple's bicycle for the mind. I'd love to see one for the body.
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