Steve Carlisle Speaks at JD Power TalkAUTO Conference


Steve Carlisle Speaks at JD Power TalkAUTO Conference

2016-11-09

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TORONTO – Today, General Motors of Canada president and managing director, Steve Carlisle, talked about an auto future that is electric, connected, autonomous and part of the sharing economy at the JD Power TalkAUTO conference in Toronto. Read more about some of the implications for Canada’s economy and our industry in his prepared remarks below.

  1. I’d like to thank JD Power for sponsoring TalkAUTO and inviting me to speak with you today.
  2. I am coming up on two years being back in Canada where I started my GM career, after graduating from The University of Waterloo, near where I grew up in Woodstock, Ontario.
  3. I have had the privilege of working internationally and in a number of roles at GM. I have seen a great deal of change in that time
  4. But I think you would have to go back to the days of Colonel Sam McLaughlin to see the kind of significant change happening in the auto sector today.
  5. Earlier this year I wrote a piece in the Globe Mail noting that we had actually reached the “most horses” on our roads in 1920 – a full 12 years after Colonel Sam motorized his horseless carriage with a Buick engine in Oshawa in 1908.
  6. Like today, that was a very disruptive period of change.
  7. Environmental, safety and technological factors were all at work as we started to embrace the automobile.
  8. It was noted in New York City at the turn of the century that without a more rapid shift to internal combustion engines, horse droppings on New York roads would quickly rise to the third story level of Manhattan buildings.
  9. My plan today is to share some thoughts on the disruptive trends and technologies that are transforming our industry today.
  10. And in doing that, I will reflect on some of the implications and opportunities for:
    1. Our environment
    2. For the consumer, and
    3. For our industry here in Canada.
  11. New players are rapidly moving into our space. Companies like Google, Apple, Tesla and Uber are, I believe, just the early winds of change.
  12. Some have called this the “Fourth Industrial Revolution” – and others the “internet of everything”.
  13. Our challenge is to understand the change, respond and thrive in a period of transformation.
  14. Companies that don’t do that will be road kill.
  15. Mary Barra, our Chair and CEO has set out a clear direction for GM stating that “Our goal is to disrupt ourselves, and own the customer relationship beyond the car.”
  16. At GM, we see an auto sector that is electric, connected, autonomous and part of the sharing economy.
  17. These four major trends are now mashing together and quickly redefining the future of mobility.
  18. At GM, we are embracing this change as an opportunity to increase the value we provide to our customers and redefine our business.
  19. If we get these changes right, we will be rewarded with the loyalty of many new customers.
  20. I also believe that if Canada can get its role right, it will be rewarded as well.
  21. So let’s first take these key trends on one at a time.
  22. First, we see a future that will be increasingly electric.
  23. For too many years the automobile has been portrayed by some as an enemy of the environment. A convenient target perhaps.
  24. What other industry in North America is currently spending over $200 billion on innovation, to deliver a 50% reduction in GHG emissions between 2012 and 2025?
  25. This past week, the US EPA reported that the fuel economy of new vehicles has improved by 2.4 miles per gallon, between the 2012 and 2015 model years.
  26. At the same time, GHG emissions per mile travelled have decreased by 10 per cent. That improvement has happened despite low gasoline prices that have encouraged many consumers to shift toward larger vehicles.
  27. At GM, as we look to the future, we believe that ultimately electrification, in all its forms, will be a critical pathway of change.
  28. The Chevrolet Volt plug in electric car – now in its second generation – has been Canada’s best-selling EV for four years running – receiving the Green Car of the Year award from both AJAC and Motoring TV.
  29. Building on that, we are very excited to soon be launching the Chevrolet Bolt EV, with a US EPA-estimated 383 km of range and a Canadian MSRP starting at $42,795, before government incentives, which can be as generous as $14,000 here in Ontario.
  30. We are already seeing significant excitement over the Bolt EV and are committed to the growing Electric Vehicle market for the long term.
  31. And we think this gives us an obligation to engage in a realistic conversation with our partners about the pace of EV change and how we manage it.
  32. There is one key to the EV market – and that is the consumer.
  33. And they still have questions.
  34. Consumers are very interested in Electric Vehicles – but – at purchase time they ask about battery range, recharging times, vehicle costs and the availability of charging stations along the highway, at work, or in their condo.
  35. These are challenges we can and will solve.
  36. Adoption will accelerate – but only when we figure out how to align technology, infrastructure, governments and consumers.
  37. Another inconvenient truth is that change takes time.
  38. Let’s do the math.
  39. We know that today, Canada’s on road, Light Duty vehicle fleet – the products we produce – are responsible for 12% of Canada’s total GHG emissions. That’s a sizable source and we need to reduce it.
  40. But what’s the best way?
  41. Each year, Canadian consumers replace about 8% of the total, on road fleet by buying new vehicles that produce less greenhouse gas.  That’s an 8% turnover impact on 12% of Canada’s annual GHGs.
  42. In other words, we improve upon about 1% of Canada’s GHG inventory each year.
  43. Some believe passionately that EVs are the “silver bullet”. But EVs today only make up about 1% of new vehicles sales – so that 1% of the 1%.
  44. When we only focus on EVs, we punch below our weight.
  45. I don’t mean that to sound discouraging.
  46. Quite the opposite. I think we can do better.
  47. We should be encouraging EV sales but we should also be taking action to retire a greater portion of the 33% of Canadian vehicles that are now 12 years or older.
  48. That’s 9 million older vehicles with higher emissions.
  49. It’s like having 1/3 of the population walking around with analogue phones.
  50. In Japan, Vehicle Type Regulations covering large cities force ten-year-old vehicles off the road.  Accelerated turnover of vehicle technology improves the environment and it’s a strong boost for the local economy.   
  51. Now imagine if Canada could upgrade the 33% of its fleet that’s over twelve years old with current technology – every replacement vehicle would be producing up to 20-30% fewer GHG emissions.
  52. That seems to be a realistic, faster and more consumer friendly way to use green tech to help fight climate change.
  53. The second trend rocking our world is the “connected car.” 
  54. What smartphones have done to connect us in the last decade, cars are doing today. 
  55. And once again, the customer is driving change.
  56. Connectivity is now one of the highest priorities on the buyer’s list.
  57. Today, more than 70 percent of the world’s population owns a mobile device, and 87 percent of millennials say their smartphone never leaves their side.
  58. Today, new car buyers expect their car to be a mobile device. 
  59. With widely available 4G LTE connectivity across North America, GM now delivers in-car WiFi in all our new models enabling customers to stream on up to 7 devices at a time.
  60. But more importantly – that connectivity is a lifeline.
  61. Connectivity is all about entertainment, fun and taking the Internet with you wherever you go.
  62. But connectivity is also about safety.
  63. For example, we are now seeing widespread availability of Apple CarPlay and Android Auto.
  64. This is significant because these mobile solutions enable safe, voice or steering wheel-activated commands. They integrate our customers’ mobile devices with their vehicles – eyes on the road and hands on the wheel.
  65. And for those of us who are parents of young drivers, there is no more important aspect of vehicle safety than protecting them.
  66. Teenagers are three times more likely to be in fatal crashes than drivers over 20.
  67. So, at GM we have enabled something for parents to help their teenagers learn safe driving skills.  We call it Teen Driver.
  68. It’s is a safety feature initiated and operated by the parent,
  69. It tracks:
    1. distance driven,
    2. maximum speed travelled,
    3. over speed warnings
    4. anti-lock brake events and more.
  70. And when activated Teen Driver automatically mutes the radio until seat belts are fastened.
  71. If you have a teenager, you will appreciate why that works.
  72. Today, automobiles are integrating far greater amounts of data from a much wider range of inputs, including new vehicle sensors and remote data links.
  73. Here’s an innovation we helped develop right here in Canada – our award winning rear camera mirror.
  74. This high-resolution streaming video function removes visual obstructions – the driver does not see passengers, headrests and the roof and rear pillars.
  75. It improves vision by an estimated 300 percent – roughly four times greater than a standard rearview mirror.
  76. Again, this is about safety.
  77. Now, there are a million things on everyone’s mind, and sometimes even the most organized need a little help remembering.
  78. The new GMC Acadia helps address this issue with a Rear Seat Reminder – an innovation designed to remind drivers to check the back seat as they exit their vehicle under certain circumstances.
  79. It protects valuables, pets and yes children.
  80. Our vehicles are now mobile devices – and our customers expect to carry on their mobile life beyond the car.
  81. They expect their smartphone to be their key fob, their diagnostic centre and data account manager.
  82. Yes, even on a Caribbean vacation, some of our customers want to lock their car doors and get updates on oil life remaining, tire pressure – and even book their next dealer visit for service.
  83. So we are getting safer and smarter.
  84. And now we are in the era of artificial intelligence and big data.
  85. Last month GM announced an opt-in service for our customers, delivered through our partnership with IBM and its Jeopardy-winning super, data analytic processor, “Watson”.
  86. Combining OnStar connectivity with Watson will enable the vehicle to anticipate your needs.
  87. It will order up your morning cup of coffee on the go, anticipate the need to refuel or recharge and tailor your in-vehicle entertainment.
  88. This is cognitive computing as a mobility service.
  89. The third major trend changing our industry is the arrival of “autonomous driving”.
  90. Most people are fascinated by the notion of a self-driving car.  Others ask, “Why do we need that?”
  91. Well, again, this is all about safety.
  92. I’d recommend to you an interview this month with US Transportation Secretary Anthony Foxx in the current edition of Verge. Foxx talks about the opportunity to, “drive forward a global transformation of the relationship between human beings and machines.”
  93. He foresees plenty of autonomous vehicles on our roads by 2021.
  94. Quoting Secretary Foxx:
  95. “The advantages of safety, being able to avert some percentage of the 94 percent of crashes that are attributable to human factors, allow the elderly and people who have disabilities to have more freedom to move about, being able to help families that spend their second highest amount of money on transportation to capture some of those dollars back.”
  96. Each year, more than 35,000 people in the US and Canada die in car accidents due to driver error. The promise of autonomous technology is to help save lives. 
  97. The implications here are profound – so much so, that some analysts now predict that the arrival of autonomous driving technology will shift our regulators’ attention towards removing older, less safe technology.
  98. So, are we ready for all this change?
  99. Today, GM is testing autonomous vehicles on roads in California and Nevada and we are benefiting greatly from our purchase of Cruise automation.
  100. Autonomous testing and development will require considerable coordination across various levels of government.
  101. GM made another significant investment recently in the ride sharing company Lyft – because we believe that one of the safest and most effective ways to gather data, experience and expertise will be in controlled autonomous fleets.
  102. We recognize as well that governments are intensely interested in being part of this new technology as they look to grow their economies through innovation.
  103. That’s understandable when you consider that some have projected that autonomous vehicles will be an $87 billion industry by 2030.
  104. Now, game changing technologies don’t just appear out of pixie dust.
  105. Autonomous vehicles are being born out of the accumulation, integration and then further innovation of numerous new technologies.
  106. Several pre-autonomous features are available in new vehicles today – from lane keeping, automated braking, and automated distance control.
  107. A next step on the road to autonomous will come next year for Cadillac customers with what we are calling “Super Cruise.”
  108. This is adaptive cruise control at highway speeds, using cameras and sensors to automatically steer and break on divided highway driving.
  109. The option to let your car do the driving for you, hands free and safely, is very appealing.
  110. It’s another step toward safe, autonomous vehicles.
  111. Self-driving vehicles will revolutionize delivery services, the need for parking and urban design.
  112. Autonomous vehicles travelling at higher speeds will test the bandwidth and computing powers available today and that may require data boosters and super cloud processing planning as well.
  113. So change is being paced by critical progress in mobile computing, artificial intelligence and big data analysis.
  114. Our governments are already planning for it with reserved spectrum for Vehicle to Vehicle communications.
  115. When an autonomous vehicle detects sudden braking from the vehicle in front of them, it will be able to communicate that to vehicles around it and to those maintaining the infrastructure.
  116. So, while we are planning the largest infrastructure spending in Canadian history, we would be wise to think carefully about the type of technology that will be rolling on that infrastructure – and in communication with it.
  117. The fourth and possibly most profound trend is the rise of the sharing economy and mobility as a shared service.  
  118. For hotels, finance, media and others the sharing economy is challenging traditional business models
  119. For our industry, it’s changing traditional notions of personal mobility and car ownership.
  120. Today, an estimated 15 million people around the world use ridesharing and car sharing.
  121. By 2020, this number is projected to be more than 50 million, and GM plans to be a big part of it.
  122. There is no question that traffic congestion, insufficient public transit and the pain of daily commuting are all changing attitudes among consumers in profound ways.
  123. A millennial today will tell you that mobility is found on their smartphone.
  124. Integrated, multi-modal mobility systems will become essential for city dwellers. Smartphones will help us navigate the best routes.   Including solutions for the first and last mile.
  125. That’s why, for example, this past year our GM Canada engineering team has developed a new electric-assist bike we call e-bike.
  126. Your trip to downtown Toronto may include an Uber ride to a train, a subway or even a portable e-bike to cover the last kilometer.
  127. Part of our answer is a new mobility services division of GM we call “MAVEN” – now operating in the US, China, Germany and Brazil
  128. MAVEN’s services come in several forms.
  129. One service is Residential Vehicle Sharing which provides condo members special access to a pool of GM vehicles through a MAVEN membership.
  130. Condo members can use the MAVEN app to select and reserve a vehicle and the app enables them to unlock and start their vehicle located right in their own building.
  131. Through City Vehicle Sharing, MAVEN also now provides its members with access to a local network of GM vehicles placed across the city.
  132. Again, the membership app makes it easy.
  133. And through Vehicle Ride Sharing programs, we are working with a growing range of companies and drivers with convenient access to insured vehicles.
  134. Our MAVEN Express Drive program is now working extremely well to support Lyft drivers across the US.
  135. But our plan with Lyft is to also create an integrated network of on-demand autonomous vehicles – including electric vehicles.
  136. Then, last week MAVEN announced a partnership with Uber to conduct a 90-day express pilot.
  137. Men and women who want to drive and earn money on the Uber platform will now also be able to lease GM vehicles by the week, or longer, at discounted rates with no mileage limits.
  138. Whether working with Lyft or Uber, MAVEN gives us a great opportunity to deliver services the way our customers want to move.
  139. It also sets up a virtuous cycle where we can manufacture and sell vehicles and support the growing ride sharing marketplace.
  140. We look forward to adding Canada to the MAVEN list in the weeks ahead.
  141. To the dealers in the room, you might be asking: what’s the dealer’s role in the shared economy?
  142. Conventional car ownership is expected to remain the primary model for some time.
  143. And many users of car-sharing services are car owners themselves, using these services as a supplement to ownership.
  144. A dealer’s role in the sharing economy can take many forms.
  145. Customers need to be able to access shared vehicles and dealers are located in prime locations. 
  146. Shared vehicles need to be managed as any other fleet and serviced like any other vehicle.
  147. A shared vehicle experience could be an excellent test drive opportunity.
  148. We’re working with our national dealer council to develop solutions.
  149. Let me sum up.
  150. I believe the move to electric, connected, autonomous and shared vehicles will have profound implications.
  151. For the environment – technology is going to reduce greenhouse gases from our vehicles – but there will be work to do to build out charging networks and get consumers comfortable with the change. It will take time. But it’s coming.  
  152. Connectivity and autonomous technology will bring many safety improvements – to the point where some believe older vehicles will start to be our concern for the environment and for road safety.
  153. Shared vehicles will start to dominate city mobility while multimodal solutions will become commonplace for commuters.
  154. Increasingly, shared vehicles will be autonomous – and autonomous vehicles will be electric.
  155. For our industry, manufacturing and sales and service will still be our core business, but mobility services will be the new business focus of the next 50 years.
  156. We will need to think in terms of not just selling vehicles- but selling kilometers and gigabytes too.
  157. So one final question. What does this mean for Canada? 
  158. The answer is opportunity.  
  159. A few weeks ago we were very pleased to confirm that GM will invest $554 million in our facilities in Oshawa, St. Catharines and Woodstock. 
  160. I want to commend our Unifor partners for their professional and constructive approach during this set of negotiations.
  161. We all know that we need to take a long term view and continue to work together along with our governments to make Canada a very competitive location for advanced manufacturing.
  162. But that future needs to include advanced engineering, innovation and RD in Canada too.
  163. The winning jurisdictions will be those with welcoming policy and regulation, world leading universities and top talent and research capabilities in areas like mobile communications, artificial intelligence and cyber security.
  164. More specifically, our industry will be drawn to jurisdictions with leading talent and capabilities in these areas of needs and opportunities, such as:
    1. Lightweight materials
    2. Mobile Connectivity
    3. Data Analytics
    4. Advanced Battery Technology
    5. Cyber Security
    6. Software Development
    7. Sensors
    8. And, Artificial Intelligence
  165. After visiting many of our top Canadian Universities, I can tell you that we have these strengths right in our backyard.
  166. In fact, Ontario produces more qualified Science Technology Engineering and Math, or STEM grads than the state of California.
  167. At GM, we believe that Canada has the right stuff for this future – on par with places like Silicon Valley and Israel.
  168. In June, I was joined by Prime Minister Justin Trudeau and Ontario Premier Kathleen Wynne to announce a major expansion of our engineering and software work in Canada.
  169. Together with Mark Reuss, our global head of Product Development, we set some important new directions.
  170. This also gave us an opportunity to fully describe our future auto ecosystem for the first time, spanning our manufacturing plants, university partnerships, and our growing engineering footprint.
  171. Let me share that with you in this short video.
  172. So – we’re hiring.
  173. In our Oshawa and St Catharines plants we’re bringing on 680 new full time hourly workers.
  174. And we received over 2,000 applicants in October alone, interested in joining us to work on our new engineering mandate.
  175. So I have one ask of you today.
  176. If you know of qualified grads interested in being part of this technology revolution, please send them to gm.ca/careers or to me.
  177. Let me leave you with this final thought.
  178. We are in a disruptive period of transformation.
  179. The implications are profound for our consumers, for the environment and for Canada.
  180. This can and should be Canada’s moment.
  181. We have everything it takes to be a leader in this transformation.
  182. But like Colonel Sam did 100 years ago, we will also need to think differently.
  183. We need to think about mobility as a service and we need to “invent products to manufacture – not just manufacture products others have invented.”
  184. Let’s do that. 
  185. Because if we do, it’s going to be a very exciting place indeed.