Former GM CEO, Daniel Akerson, has spoken on the record about Apple’s rumoured plans to build an electric car.
In the wake of news that Apple has reportedly setup a top secret car development project, Akerson told Bloomberg Business: “I think somebody is kind of trying to cough up a hairball here. 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].”
He then elaborated on the fact that the auto industry is much tougher to get a handle on than outsiders expect thanks to regulatory factors, safety requirements and a long supply chain that starts from raw steel. Prior to becoming GM CEO in 2010, Akerson was CEO at a number of telecommunications firms and the head of a private equity fund.
Another key cause for concern, in Akerson’s opinion, is that the margins for car makers are a lot slimmer than what Apple is currently used to.
In the last quarter of 2014, Apple made a net profit of US$18 billion ($23.1 billion) on US$74.6 billion ($95.8 billion) worth of revenue. During the same timeframe, GM turned a profit of US$1.1 billion ($1.4 billion) from a revenue stream of $155.9 billion ($202.2 billion).
On the other hand, GM’s former CEO sees a huge opportunity for Apple in the field of in-car electronics, operating systems and entertainment. In reflecting on his time as head of GM, Akerson said, “I’d have turned over the infotainment and interconnectivity of every GM car” to Apple.