david: general motors, navigating change, the old carmaker is trying to become a new technology company. mary: this is a transformational time in the transportation all industry. david: g.m. leadership wants to change the entire company from the bottom-up and top-down. want to be part of the solution and be held accountable. mary: if you see me doing something that is inconsistent with what we just talked about, call me out. david: g.m. is trying to change its mission, product and nature of what it means to be in the transportation business. the question is, where is gm

driving? ♪ i am david westin. has been at the heart of american business. for most of the time, it was a dominant force. it was number one in the s&p 500. foreign competition, crippling pension costs, leading to gm going bankrupt in 2009. it emerged a much different, leaner company. we travel to detroit to see where it is going. we want to learn from mary barra and her lieutenants about the changes they are making and if they are the right changes. mary: we are most part of the that ared crossovers

the best we have ever produced. , gmc, ourand cadillac brands in china as well. every segment we compete in, we want to win. i would also say we're looking at ways to grow the core business. with gm financial and service parts, those are just two ways we can continue to grow the core business even in developed markets. it is a transformational time in the auto industry. we know that people are going to have to figure out how to get from point a to point b. you see general motors taking a very proactive measure to lead in that space. whether it is a less products ise the bolt -- whether it electric products like the bolt.

we want to define the future of transportation. david: where will the growth come next? mary: foundational element we have. of puttinghe infancy on technology and applications and services into the vehicle that will improve customer's lives. that is a huge area to grow. china is another huge area, even though china is volatile. we see tremendous growth between now and 2020. we have new models coming between now and then. in a typical emerging market, it is going to be a little more volatile, but we f the potential. david: it must frustrate you the stock price has not caught up. why is that? what does the street not understand about general motors? transformation,piratio

people try to say it is a cyclical business and as we come out of the cycle, what will be different? we are changing perceptions. we are really disciplined and have been talking to investors to make sure they understand that we are well prepared. generalvery different motors and the fundamentals are strong. we understand we are a cyclical business, but we are also doing things to get rid of the bottom of the cycle by having businesses like gms and onstar that have a different revenue and profit model. david: is is particularly difficult being at the top of this and not having the stock price where you would like it to be? it puts even down,

more pressure on stock prices. mary: we are focused on what we can control. if we are running the fundamentals and making it at her -- we are committed to take out $5.5 billion of costs, we are on track to do that. actually getting the strong material performance was making sure we are improving relationships with suppliers. david: why do investors like tesla? mary: it is one of the reasons we are working to make sure people understand conductivity and the volt. it is about the future and how you're going to create value. we're working hard to make sure we create a substantial shareholder values. i spend an incredible amount time on how we deployed deploy -- how we capital.

general motors is a tech company leading with a multitude of technologies. the story will change. -- with how at we need to grow. is it realistic to increase your multiples as people get used to the idea you are at tech company -- a tech company? we are undervalued and we're going to keep working to make sure people understand what we're working toward and how we are investing. again, i believe. i come to work every day, it is something that will take care of itself. david: the new world of electric vehicles and self driving cars. >> we believe we will see more change in our business in the

next five years then we have seen in the last 50 years. ♪

>> it is all electric. it is affordable. that is what distinguishes it. inside it is a big car. anhave been able to create interior that has a space people need in their everyday lives. transportation is changing with electric vehicles like the new volt ev. these innovations pose great risks, but gm executives claim to see great opportunities. one of the big questions is how soon the radical changes are coming to a street or highway near you.

looking forward, let's assume it popular. who will own the lyft cars? definedat has not been yet. it is going to be very exciting. i think there will be fleets that are owned. and vigils may own their own vehicle -- individuals may own their own vehicles. there is a lot to be defined. to be a part of the definition is what we are working on. david: it is exciting. but in a world were a lot of sharing is going on, a car could be more preservice you rent rather than a product you own. cart due to purchases? the real answer is we do not know.

for general motors, one of the areas we know sharing will happen first is in urban areas. that is an area where we are not as strong as we are in middle america. when you look at the strength of our business in the u.s. with trucks and suvs, or many people it is a very important part of their work. participate in the sharing and strengthen our position in the urban areas while maintaining the or strength of our business, trucks and suvs in middle america. david: what the theory is in investing -- explain what the theory is in investing? >> we can already see customer preferences are changing, particularly in urban environments where customers want the convenience and availability of getting from aid without theo b

costs and hassles that come with ownership. we see transportation as a service. rideshare businesses are growing very quickly. we fundamentally believe the change is not something that will happen, it is already happening. we want to participate in the change and do more than that. we want to be at the forefront of the change. -- we needusinesses to be in businesses we are not in today. we are looking to build capability we need to lead. david: would you make the big push you are making in autonomous vehicles if there was not ride sharing? >> they are each as interesting in their own right but he gets really interesting when you put those two things together.

we believe it will fundamentally transform what we already call the traditional rideshare business. move -- is that move a defensive move or offensive move? a significantke majority of our profits outside of urban centers. we make a lot of money selling pickup trucks and suvs. business that the generate most of our profit will be some of the last places we see this kind of disruption. where description begins and opportunity is best where disruption begins and disruption -- where begins and opportunity is is in urban environments. reduce thedn't it demand for cars? >> we think it will increase the total number of miles covered.

if you think about the business and scale of the business in terms of vehicle miles traveled, we think the business grows. if you think about it narrowly in units sold, it might go down. it is important to focus on a number of miles -- on number of miles traveled. fascinating.s how does gm make sure it participates in the outside of the more miles traveled? it may not be selling as many cars. is it is of subscription -- is it a subscription service? travel kind of business. it is important for us to make an investment to understand that is this, it is a different model from our traditional model.

david: how can general motors make sure it is profitable right now? >> we are going to manage supply and demand to make sure we did not create the same issues we saw leading to the restructuring. ♪

david: the year before the financial crisis, general motors sold more than 9 million cars of dollars.lions lester they sold more than 9 million cars, but it made nine $7 billion in profit. this is gm driving the future. general motors is making and selling more cars and spending less. it is down from its high in 2013. one of the big questions on wall street is how executives can manage the business forward.

david: to what extent have you anticipated a downturn? mary: one of the things we have done is to make sure we are maintaining a break even. if you look where the market is .ow and what happened you're prepared to break even at 10 million vehicles. what is that plan? 2010, we go back to made a commitment that would maintain our breaking point. we said we would be disciplined from up kissing standpoint and we have been very

focused on that over the last number of years. weare focused on ensuring maintain. ensuring we continue to launch in greatt grea products. we want a business model globally where we can ensure we can perform well in a downturn, can invest through the cycle's lead on to ups and downs in investment through the cycle, and so that we have an investment grade fortress balance sheet. we run the business accordingly to ensure that. downturnng proactive planning, reducing dealer inventories as we have seen over the last year or so, or focusing on retail sales. it is having a game plan on what costs you can take out in the

event of a downturn. we have a very well formulated plan and have reviewed it with the board of directors. david: how quickly could you cut production? that would be closing plants? , the first thing you want to do is align supply and demand and would slow down plants and takes caps off -- shifts off. we have not added brick-and-mortar, we added shifts. isay, 25% of our workforce truly variable. it is short-term workers. it will increase over the next number of years where in the event of a downturn, we could reduce the workforce relatively quickly. david: let's dig into the gm

story with jamie butters. does wall street believe the story that gm is telling us? is a fair amount of skepticism. investors are not convinced they can bring down the costs as clear as chuck stevens says they can. there is a sense that this is as good as it gets and it is going to get tougher from here. innovation tois the current valuation of general motors? jamie: it hits them coming and going. they have to invest in technology that does not yet paid for itself and lowers their profits. at the same time, they are competing with tech startups for capital. it is really tough, but it is what they have to do for the long run. 'svid: up next, mary barra

secret formula to deliver what she has promised. mary: calmly out. -- call me out.

david: since the beginning of dollar industry, there have been and norma's changes to the cars we drive, from electric starters to self driving cars. gm says one of the changes is brand-new and you cannot see it. it is platform engineering. took a ride with mark royca. he calls it one of the most profound differences. that has of the things changed is platform engineering. how many vehicles will be built on a platform similar to this? mark: that is a good question. real secret is when we

flex delta and did like crossovers and suvs. we have never been able to do that before. we do it in every market in the world. we brought our global scale to bear. this is one of the biggest global architectures. is it a big driver of cost savings? mark: we want our suppliers to be wildly successful in terms of what they make. from a money and quality standpoint. maintain the you efficiencies and still have the variation market to market, consumer to consumer? wek: what we have done is have gone through an interesting time in the 2000 where people talked about global engineering and we did not.

the problem is you have different rooms for the architecture and variation is almost guaranteed because you do not have central control over it. it is -- we have now consolidated that over the last couple of years. generally speaking, global architectures are tremendous. david: almost from the day you stepped in as ceo, you want to change the culture. i talk culture, i talk about it as behaviors. i can't come in today and say i -- this part ofs typ the culture. we have leaders from around the said, what are

the important things? it was about transparency, owning each other's problems, creating a relentless desire to win. i told everyone if you see some me doing something that is inconsistent with what i just talked about, called me out. it has permeated the organization very quickly. all of those things are starting to change the dialogue about general motors. yes, we understand we are a cyclical business and are well prepared and are taking steps and being disciplined, but we are also investing in the future. this is a company that is going to be around not for five years, but 50 years and 100 years. david: the general motors be found in detroit is determined. , it is determined to drive change in the future of

transportation. it is a tall order with many her -- hurdles. i am david westin. ♪ get ready for the rio olympic games

by switching to xfinity x1. show me gymnastics. x1 lets you search by sport, watch nbc's highlights and catch every live event on your tv with nbc sports live extra. i'm getting ready. are you? x1 will change the way you experience nbcuniversal's coverage of the rio olympic games. call or go online today to switch to x1.

♪ narrator: the challenges facing our world are growing all the time. how do we build stronger economies with equal opportunities for all? how do we build a sustainable world for generations to come? how do we protect our cities and harness the power of technology for our common benefit? in this series, using the latest bloomberg research and analysis, we will make sense of the problems of tomorrow. inequality, sustainability, artificial intelligence, the

gender gap, and the demographic time bomb. and in this film, how we manage our megacities. millions of people every year swell the planet's cities. can we harness economic potential of these hubs, or are we creating centers of poverty, inequality, and violence? ♪ narrator: this is the age of the city. for the first time in human history, more people live in urban than rural settlements. the world's urban population is growing by 70 million people each year. 301 cities account for 50% of global gdp. this will rise to 66% by 2025.

so if we don't get things right in our cities than the consequences for humanity are profound. >> cities are critically important to the global economy and to progress in the global economy. cities can be sources of chaos, as well as development. narrator: this makes them so alluring and so vital. they can be dangerous places. but cities are where fortunes can be made. >> one of the primary factors driving urbanization is opportunity. you live on a farm, and you are growing crops -- you don't have a lot of opportunity. you see a growing, bustling city, your friends are moving there, they are getting jobs in

offices, maybe jobs in a manufacturing center, there are restaurants, culture, life. this is attractive, something you want to be a part of. everything is relative. they will have greater access to schools, greater access to employment, greater access to and a less vulnerable economic life. ♪ narrator: in 1900, 12 of the world's biggest cities were in north america or europe. 100 years later, this number had fallen to just 2. most of the biggest cities in the future will be in the developing economies of asia and africa. >> most of the growth in cities will be in china, india, and nigeria. those three countries alone will account for 37% of the world's population. staggering numbers. here is an example -- lagos, the biggest city in nigeria. its population every year it is

adding the equivalent of boston. >> the urbanization rate in the u.s., japan is over 70%. in china, it is 50%. so china may have a lot megacities, they may have larger cities, but they are going to get bigger or there is going to be more of them. that is going to be a trend. a lot of emerging markets are going to experience trends like that in the next 50 years, especially with a large population. narrator: this incredible rate of growth makes the challenges of managing a large city more difficult. james hertling: the biggest risks facing cities are the same risks that challenge all of us, politically governing, climate change, economic inequality, productivity, economic growth,

employment education, , transportation. those issues that face cities are the same that face everyone , except in a much more concentrated way. narrator: one city battling with these problems is rio de janeiro in brazil. alessandra orofino is on the front lines, trying to solve them. she believes the world's biggest cities are in danger of sinking under a tide of poverty, decrepit infrastructure, and citizen apathy. and unless we do something about it, billions will suffer the consequences. alessandra orofino: the kind of urbanization we have today can only go so far. if we do not change the way we design our cities and make cities change with us, we will have serious limits to urbanization. they will become impossible to manage, impossible to live in, miserable places to be. if we change that process, those

limits could change and possibly be nonexistent. have to think about the environment and how we can better build them together. ♪

narrator: managing megacities is one of the great challenges facing the world. this is rio de janeiro, brazil. nearly 12 million people crowd into its metro area. it is beautiful and vibrant. but it also has its problems. crime, inequality, and poverty. alessandra orofino is an urban activist and thinker who has lived and worked in megacities on three different continents. she has worked with united nations on sustainable founded angoals and ngo that uses data gathered from citizens to raise campaigns and solve issues posed by the rapid growth of the cities. 170,000 activists.

alessandra hopes it can be a model for other rapidly growing cities around the globe. we build on a rich tradition of activists and try to bring it to the world that make sense to people. i was born in this city. in rio de janeiro. my family has a mixed background. my father comes from a neighborhood in rio that was quite dangerous in the 1990's, quite poor, or lower middle class. and my mom comes from a wealthy background, one of the best neighborhoods in rio. the city can be amazing, but it can be very rough and unequal. that is not just a characteristic of this city. it is something we are increasingly seeing in cities around the world. narrator: rio de janeiro is similar to many emerging megacities. some neighborhoods are as wealthy as any other on the planet.

others remain impoverished and cut off. bridging this gap will, alessandra believes, have profound benefits for us all. alessandra orofino: cities bring people closer. they have the density in them. they are the places where most innovation will naturally happen. it's hard to innovate when you are always talking to the same people and hearing the same thoughts. cities are the exact contrary of that. they are natural hubs for innovation, natural hubs for economic growth, and they tend to be the engines of growth in most countries. narrator: but when the growth is rapid and unplanned, the results are gridlocked streets, poisoned air, and an infrastructure that simply cannot cope. alessandra orofino: i come from a city that expanded too rapidly for sure. how do you create sidewalks, schools, mobility systems to cater to a growing population?

if that rapid urban expansion is happening in environments where inequality is paramount, the challenges are even bigger. narrator: in a megacity, one of the biggest challenges can be simply getting from a to b. alessandra orofino: our mobility systems, in general -- very few exceptions -- suck. when you have a poor mobility system, you preclude entire segments of the city from living the city. from actually accessing the opportunity and the beautiful miss and the amazingness that city has. because it is hard for them to get around. you also preclude the rich people in the city from getting to know other areas of the city, which can be exciting and fulfilling experience in itself. so you are creating a city in which everyone is living in their own territory, which is terrible. narrator: at the forefront of these infrastructure problems

are the city's poor. they can become physically cut off from the economic opportunities living in a city provides. alessandra orofino: it includes rapid expansion of cities. the fact that in the developing world, one third of the population is living in slums, something none of us should accept as we grow and think about a planet in which we want to live. narrator: slums are a result of rapid, unplanned expansion. today, an estimated 863 million people live in slums. if the slum dwellers in india were a separate nation, they would be the 13th most populous country in the world. but slums are not always hopeless places. alessandra orofino: the poor are not just sitting and waiting for the government to do something for them, they are creating their own environment.

in rio, most of that infrastructure was built by them. so there is a level of do-it-yourself that you see in more poor neighborhoods than neighborhoods precisely because the government wasn't there. narrator: this means slums must be handled delicately by urban planners. alessandra orofino: what do we do with areas that were developed by communities but lack infrastructure? even if we are assuming goodwill, in terms of how we handle them, if the only thing we want to do is provide those areas with quality public services there are choices that , have to be made. which pieces do we leave, which pieces do we change? if we don't handle that process in a way that is human and intelligent and is aimed at protecting the interest of the poorer communities, we can end up with massive rates of dislocation and destroying an urban fabric and social fabric

that is so important and so vital. rio, we have a neighborhood with a tram. it is beautiful. most trams in rio were destroyed earlier in the 20th century. this is something that the neighbors organize and kept their trams. it was a forgotten neighborhood for a while. poorer.e a lot in the past five to six years, it has been gentrifying. the government decided to turn the tram, one of the remaining parts of the city, into a tourist attraction. but the only reason why the tram still exists is because we organized and kept it here. they created the value. narrator: alessandra believes cities often ignore creativity.

the result is a democratic deficit, which erodes faith in the city government and alienates already vulnerable communities. alessandra believes cities must take citizens with them if they are to expand successfully. alessandra orofino: what we definitely have not got right is the process by which we involve citizens. i have not seen one case of a city that has used the collective intelligence of its citizens and distributed power to make it. when we get that right, we see a lot of other issues we see. narrator: but for us to truly harness the power of our cities, we need to heal the divisions within them first. alessandra orofino: if we keep building an equal cities, these cities are not very good to live in for most of their population, i don't think we can hope to be happy in these urban spaces.

the worst-case scenario would be cities that do not have a soul and become less and less attractive to entrepreneurs, for people who want to create new economic activity, and ultimately become less wealthy. narrator: across the ocean from rio, another giant city is growing. lagos is now the most economically important city in africa, but its growing pains that are excruciating. and threatening the features of 21 million people.

♪ narrator: more people live in cities than ever before. but many of the world's biggest cities are struggling to cope. lagos, on nigeria's atlantic coast, is the largest city in the world without a citywide rail system. meaning everyone has to travel by road.

for workers, like abraham cole his daily commute takes over his , life. >> what time did you wake up? likeis morning, i woke up 3:00 3:30. ,i usually do not do breakfast. narrator: in three years, the population of lagos has nearly doubled from 11 million to 21 million. but this staggering expansion has overwhelmed the city's impoverished infrastructure. >> how long will it take? >> it should take me for five minutes to get to the office. >> in full rush-hour, how long does it take? >> 6, 7 hours in traffic. three hours going, three hours coming back. it is much worse coming back. coming back is something else. i don't think i want to waste

seven hours of my every day time for the rest of my life. narrator: lagos is currently ranked in the top five least livable cities in the world. but although the city's economy is bigger than kenya's, simply getting to their desks is a daily ordeal for millions of workers. >> when do you see your children? >> weekends. weekends only. sometimes i see them during the week, if they really want to see me. and they came to see me. sometimes, they miss me that much. >> it must be quite difficult. >> yes, it is. but it's that we have to do. for now.

♪ narrator: like millions of lagosian workers, abraham's first act after getting to work in the morning is to take a nap. >> welcome to my office. >> what are you going to do now? -- it is 7:10. so i took a nap for 30 minutes. and get ready for work. narrator: 2000 people migrate permanently to lagos every day. straining the city's infrastructure further and expanding the city from the land to the sea. the result is slums like macoco. a floating settlement on the city's lagoon. ♪

>> infrastructure has not kept pace with the population growth. so basically of quality of life, access clean water, for example, access to electricity are limited. so before you even get to issues related to growth and developing, lagos and nigeria have to sort out more basic issues of infrastructure. narrator: macoco is the oldest slum in lagos. 80,000 people live here in buildings sitting on stilts connected by a complex system of canals. >> successful cities find ways to deliver services to even the most deprived. that is the challenge, especially in the developing world, where resources are at a premium. narrator: in macoco, residents have developed their own infrastructure, including

freshwater and electricity. and this three-story floating school, which doubles at a community center, is the latest addition to this unique environment. the school was completed in 2013. it is cheap and easy to build. its designers hope it will be a template for future buildings in macoco. >> macoco in nigeria raises interesting questions of government and control. it has been long ignored area. and the local residents took charge and tried to improve their own lot with schools and their own locally initiated development projects. but also the central government has decided it wants that area for its own development reasons. narrator: only a few kilometers away lies an alternative vision of how lagos may develop. not a grassroots community vision, but a grand project of incredible scale. echo atlantic.

>> where we are standing, we are in the alignment of the financial district. what we call "echo boulevard." this is where all the major financial institutions will establish their headquarters and offices. narrator: echo atlantic is a multibillion-dollar residential and business district built on 10 square kilometers of reclaimed land. it is, in effect, a new city -- or it will be soon. its backers hope a quarter of a million people will one day live here, with 150,000 workers commuting from the old city across the water. initially thought about building atlantis, we looked at an area in london, we

looked at dubai, and we looked at the heart of london, heart of paris, heart of new york. obviously, the vast majority are wealthy people. i could not afford to live in the heart of london. but, in creating the residence for these people, you are also creating job opportunities. and it is the norm, here in nigeria, that if you create residential apartments, you also create orders for the domestic staff working for that family. you have to take into context that this is a city development. it is not a low income settlement. it is a business sanctum. primarily. this is the future. the first commercial development of lagos. there is no doubt of that. narrator: david hopes the first residential units will be open by the end of 2016, with the infrastructure of the whole site in place by 2022.

>> projects like echo atlantic raise as many questions as they answer. especially from where local residents are aware that they may be getting the short end of the stick. on the other hand, they really do lend themselves to starting from scratch and being able to build structures where there are schools, hospitals, offices, transportation facilities. and they give gigantic cities like lagos an opportunity to create a model of what can be, presuming they are planned and executed correctly. narrator: the future paths of megacities like lagos remain uncertain. organic, citizen led growth like macoco, or large-scale planned developments like echo atlantic. what is clear is that left unchecked, growth could destroy city's immense potential.

optimist when it comes to cities. i grew up in new york in the time when we were on the edge of bankruptcy. here we are in the 21st century, and new york is booming and thriving. it is a tremendous place. you can see, with proper planning and a diverse and vibrant population, what is possible. alessandra orofino: i hope those little cities will be interconnected, in the sense they will have solidarity networks, there will be brazilian networks, and the citizens will feel like their cities -- they're cities where they want to be. a project they want to build and they can move, visit each other, learn from each other. ♪

♪ >> welcome to this new edition of the best of "with all due respect." this week, the nation was focused on the fallout from the attack in orlando. it has run new the debate over guns in america. we begin with how both as a presumptive nominees reacted to the tragedy. the orlando terrorists may be dead, but the virus that poisoned his mind remains very much alive. donald trump: it is an assault on the ability of free people to