david: general motors, navigating change. the healed carmaker is trying to become the new technology company. mary barra: this is a transformational time in the transportation industry. david: g.m. leadership wants to change the company from the bottom up and from the top down. >> resistance will pull it down pretty quickly. >> they want to be held accountable. mary: if you see me something that is doing a consistent focus talked about,. call me out david: g.m. is trying to change his mission, its product, even change the

nature of what it needs to be in the transportation business. the question is, where is g.m. driving? ♪ david: hello. for more than a century it was the heart of american business. it was a dominant force, the number one car company in the world, the largest u.s. employer. number one in the s&p 500. but then came a host of problems. foreign competition, inferior products, all leading to g.m. going bankrupt in 2009. it emerged a much different, leaner company. we traveled to detroit to see for cells where g.m. is now and where it's going tomorrow. we wanted to learn from ceo mary barra about the changes they are making and whether they are the right changes. mary: one of the things we are most proud of is the crossovers we are putting on the roads.

they are the best we've ever produced. and we continue to build brands. both chevrolet and cadillac and g.m.c, and then our brands in china as well. every segment we compete again, we want to win that segment. i would also say we are looking at ways to continue to grow the core business. with g.m. financial, after sales, that is two ways to grow

the business. is is a transformational time in the transportation industry, in the auto industry. we all know that people, whether five years from now or 50, left figure out how to get from point a to point b. you can see general motors taking measures to make sure we are in that space. whether it's connectivity, autonomous, products like the tv for the bolt. we are not only making sure the core business is doing exceptionally well but we are branching into areas because we want to find the future of transportation. david: where will the growth for g.m.? mary: with the foundational element we have with onstar, we are at the infancy of putting on technology and applications and services into the vehicle. it will improve customers lives. that is a huge area to grow. china is another huge area. it's more volatile that we see german's growth between now and 2020. we have over 60 new models coming between now and then. we think in a typical emerging market it's going to be a little bit more volatile but we still see tremendous growth opportunity. david: it must frustrate you that as successful as general motors has been in the bottom line, the stock price has not kept up. why is that?

perception because we are really disciplined. we've been talking to investors to make sure they understand we are well prepared. is a different general motors and the fundamentals are strong with the company where we understand we are a cyclical business and we are prepared for it. get rid of the bottom of the cycle by having businesses like g.m. an onstar that have a

different revenue and profit generation model. it's not necessarily the core business that fluctuates with the industry. david: is a difficult being at the top of business and not having the stock price where you would like it to be? when it comes down it will put more pressure on the stock price. mary: we are focused on what we can control. if we are running the fundamentals and making it better, we have committed to take out $5.5 billion in cost between 2014 and 2018. we've seen dramatic improvements in our material cost performance and getting that strong material cost performance while making sure that we are improving our relationship with the suppliers. david: why do investors like tesla so much? mary: it's one of the reasons we are working to lead an autonomous and make sure people understand conductivity. it's about the future. it's where you are going and how you are going to create value. we are working hard to make sure we are going to create substantial shareholder value. i spent an incredible amount of time on how we deploy capital, making sure we do it in the best interest of our investors. we have a core business that

allows us to fund that. people see general motors as a tech company that is leading with a multitude of technologies. i think the story will change. i look at it as what we need to do to prove the value we are treating. that is where i stay focused. david: is a realistic for general motors to increase your multiple as people become used to the idea that you are a tech company, autonomous driving. mary: we think we are undervalued right now. we are going to continue to work to keep making sure people understand exactly the mission of general motors and what we are working towards. and the capabilities and the strengths we have. i believe i come to work every day that as we continue to do that, that is something that will take care of itself. david: next, the new world of electric vehicles, ridesharing and self driving cars. >> we believe we will see more change in our business in the next five years and we have seen

in the last 50. ♪

mary: and is affordable and that is what distinguishes it. inside, it's a big car. it's a really a b-car segment a c-car interior. david: transportation is changing. like the new bolt ev, they post great risk for automobile manufacturers. that fantasy great opportunities. one of the big questions is housing these radical changes are coming to a street or a highway near you. looking forward, let's assume lyft is wildly successful and we have lyft car sharing across the country. who will own the cars? mary: that has not been defined yet. it's very exciting.

i believe they will be owned that are participating in sharing. but individuals may of their own autonomous vehicles. there is a lot to be defined. and to be a part of the definition and that is what we are working on. david: it is exciting, but in a world where there is a lot of sharing going on a car could become more of a service you rent rather than a product you own. what might that mean for the overall level of purchasing for automobiles in the future? mary: there has been so much work going on. is the car going to get your or smaller? many reports say it will get smaller. i can show you want is going to say bigger. we don't know. for general motors, one of the areas where he know sharing will happen first is an urban areas. and the 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. for example, trucks and suvs, and for many people that is part of

their work, we can strengthen our position in the urban areas while maintaining the core strength of our business, which is trucks and suvs across middle america and across the globe. david: the theory of investing in technology for general motors? >> we believe we will see more change in our business in the next five years than in the last 50 years. what i mean is that we cannot receive customer preferences are changing in urban environments where customers want the convenience of availability from getting from a to b, but they are saying they don't all the hassles that come with ownership and the costs of ownership in an urban environment. we see transportation as a

service emerging quite quickly. you see that through ridesharing, lyft is growing rapidly as an example. we fundamentally believe the changes now selling that is going to happen, it is something that's already happening. we want to participate in that change and we want to do more than that. we want to be at the forefront of that change. we need to have a presence in certain types of business. when you to add some technical capabilities that we don't have today. we are looking to build the complete vehicle capability we need to lead and transportation as a service in the longer term. david: would you be making the big push you are making an autonomous vehicles that there was not ridesharing? >> right here in autonomous on the other, beaches interesting. it only gets interesting when you put those two things together. we believe that driverless technology, autonomous

technology will fundamentally transform lowly article the traditional ridesharing business. david: that move to autonomous and sharing, is that a defense of our offense and move? >> we see it as an opportunity for us. we still make a significant majority of our profits outside of urban centers. we make a lot of money selling pickup trucks and selling suvs. of those parts of the business that generate most of our profits today we think will be some of the last places we see this kind of disruption. where the disruption begins and the opportunity is therefore the early stages will certainly be much more in the urban environment. therefore, for general motors it's a good opportunity.

david: a substantial number of people were sharing cars instead of owning. that would reduce the total demand by cars, wouldn't it? dan: it may reduce the total number of vehicles sold. it will increase the number of miles traveled. if you think about the business on the scale of the business, of miles traveled the business grows. if you think about how many units of volume, it might go down or stay flat. we don't know. that's why we think it's important to put ourselves in a position where we are focused on the number of miles traveled. david: this is fascinating. in that world where we now have more miles how this g.m. make sure it participates in the more miles traveled? it may not be selling as many cars, that is subscription service? dan: you see ride sharing and businesses like lyft our growing. that is a mile traveled kind of business. we thought it was important for us to make an investment so we

can begin to understand that kind of business since it's a different model from our traditional model. david: the bottom line, whatever the future holds, how can general motors make sure it's business is a viable and profitable right now? chuck: we will manage supply and demand to ensure we don't create the same issues that we saw leading to the restructuring. ♪

david: the year before the financial crisis struck, general motors sold more than 9 million cars but it lost $38.7 billion. last year, g.m. also sold 9 million cars but it made $9.7 billion in profit. this is g.m. driving the future. general motors is making and selling more cars and spending less money. share price is down to the 30% from its high in 2013. one of the biggest questions from wall street is how g.m. executives can manage the business to make sure it doesn't end up right where it started. have you anticipated the possibility of a downturn and what are you doing to make sure g.m. can weather the storm? mary: we have made sure we are

maintaining breaking heating and unit market. when you look at what is happened in the last recession, making sure we have a breakeven point at that level i think is very important. david: you're prepared to break even at 10 million or 11 million vehicles a year north america. what would you do? that's a 30%-40% reduction. chuck: in 2010, only did our initial public offering we made a commitment that we were going to maintain our breaking point in the u.s. at an industry level of 10 million or 11 million units. we were going to manage supply and demand to ensure we did not create the same issues that we saw leading to the restructuring. we've been very focused on that over the last number of years. focused on continuing

efficiency. focus on ensuring we spend an industry levels and we have done that. ensuring that we can continue to launch in investing great products. we want the business model not only in north america but globally what we can ensure we perform well in a downturn, investor the cycle so you don't the ups and downs of investment through the cycle. and so we have an investment-grade balance sheet. restructure the business and run it accordingly to ensure that. it is doing collective downturn planning. its actions like reducing dealer

inventories, and as you have seen over the last year, or focusing on retail sales. it is having a game plan on what costs you can take out in the event of a downturn. where you have the opportunity to pull the lever. we have a very well formulated plan. david: how quickly can you cut back on production? chuck: very quickly. david: that would be closing plants, presumably. chuck: it depends on the downturn. the first thing you want to do is supply and demand. we would slow down the plants. maybe take some shifts off. we have not added any fixed capacity since the last restructuring. we added shifts. we would slow the line rates. those of the kind of adjustments you can make. today, 25% of our workforce is truly variable. they are really short-term workers. that will increase over the next number of years where in the event of a downturn we would be able to reduce the workforce relatively quickly. david: let's dig into the general motors stories with jamie butters in detroit it was

covering the auto industry for nearly two decades. as wall street believe the story g.m. is telling? jamie: there is a fair amount of skepticism about g.m. a lot of investors are not convinced they can bring the cost down as quickly as chuck stevens says they could. even if they can, there is a sense this is as good as a gift and will just get tougher from here. david: have important is the autonomous vehicles in the ridesharing and electric vehicles? how important are they to the valuation at general motors? jamie: they have to invest all this money that doesn't have returns and lowers her profits. and ear competing with tech startups for capital. these companies that lose money but are richly valued. it's tough but it's what they have to do for the long run. david: mary barra's secret formula for delivering with you promised. mary: if you see me doing something inconsistent with what we talked about, call me out. ♪

david: since the beginning of the industry, have an enormous changes to the cars we drive. electric starters to self driving cars. g.m. says one of the biggest innovations is brand-new and you can see it. it's called platform engineering, building the basic architecture of a car for the global market, not just one part of it. i took a ride with mark royce, global head of product developer. he calls one of the most profound differences between the g.m. up-to-date and when his father in nearly 30 years ago. one of the things that is changed about general motors is the platform engineering. how many other vehicles around the world will be built off of the platform similar to this? >> that's a great question.

it will be sold all over the world. if you chemical card you are driving today. when you look at deltas and things like crossovers in suv's. we are never able to do that before. we do it in every market in the world. we have really brought our global scale to bare. this is one of our biggest global architectures. david: will that be to cost savings? >> it is, but it is shared by the supplier and general motors because what our suppliers to be successful. what they make with our money and a quality standpoint. david: had he still have the variation market to market and consumer to consumer? >> great question. we went to a really interesting time here in the 2000s of people talked about global engineering. we didn't internally and publicly. the problem is you have different architectures and the variation is almost guaranteed because you don't of central control over it.

the core architecture is architected and our engineering activity, we have now consolidated that of the less couple of years into one. of these global architectures after this scale. david: from the day he stepped into the job of ceo you sent money your goals was to change the culture at general motors. what part of the culture did you need to leave behind and which ones did you want to hold onto? mary: i talk about it as behaviors. i can't come in today and say i will work on this part of the culture. what i can do right now is change the way i behave. one of the things we did is we had a top 300 meters around the globe together and said one of the most important behaviors we have to happen this company to move forward? it's about transparency and being candid and owning each other's problems and really

creating a relentless desire to win. if you see me doing something that is inconsistent with what we had just talked about, call me out. that the way we have been moving forward. as we change those i say it's permeated the organization very quickly. all those things are starting to change the dialogue about general motors. yes, we we understand we are a cyclical businesses and prepared for and taking steps and being disciplined about it. we are at the same time investing in the future. this is a company that is going to be around not for five years but for the next 50 and 100. david: the general motors we found in detroit was determined to deliver value, to its

shareholders, employees and most important to its customers. much more, is determined to drive major change in the future of transportation. it's a tall order of many hurdles. but maybe, just maybe, general motors can reclaim its place of the top of american business. for bloomberg in new york, i'm david westin. ♪

♪ john: 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. the attack has sparked discussions on how to combat terror. it has renewed the debate over guns in america. we begin with how both as a presumptive nominees reacted to the tragedy. hillary clinton: the orlando terrorist may be dead, but the virus that poisoned his mind remains very much alive.