Apple should stay away from car-making, says former GM CEO Dan Akerson

Article by Andrew Christian, on February 24, 2015

Retired General Motors chief executive Dan Akerson believes that Apple Inc. should not venture into car-making and instead get more involved in auto electronics. “I think somebody is kind of trying to cough up a hairball here,” Akerson told Bloomberg in a phone interview. He said that if he was an Apple shareholder, he would be highly suspect of the long-term prospect of “getting into a low-margin, heavy-manufacturing” business.

He remarked that the auto industry is harder than people realize because of the regulatory and safety requirements. He said those who were not operating in the auto industry have a tendency to underestimate.

He said that Apple could find more potential in working with carmakers in areas of electronic operating systems and entertainment equipment. He even remarked that he would have turned over the infotainment and interconnectivity of every GM car to Apple when was still GM’s CEO. Akerson was GM’s top honcho from 2010 to 2014, when he stepped down to care for his wife.

During his term, he was the main switch for GM’s faster implementation of new technologies in its vehicles, like 4G broadband cellular service and for the expansion of its electric-car offerings. He also remarked said that the margins associated with the iPhone should make Apple rethink plans to enter the auto industry with a car offering of its own.

Apple posted $18 billion for the fourth quarter of 2014 and a gross margin of 40 percent. On the other hand, GM posted $1.99 billion in profit before cash preferred dividends and a gross margin of 14 percent, according to data compiled by Bloomberg.

Topics: apple, gm, ceo, dan akerson

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