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Former GM CEO on Apple Car: 'They Have No Idea What They're Getting Into'

danakersonAmid rumors that Apple is developing an electric vehicle, former General Motors CEO Dan Akerson has shared his opinion on Apple's plans, suggesting the Cupertino company avoid getting into a business with such low margins.

In an interview with Bloomberg, Akerson said that Apple may be underestimating the difficulty of operating in the car business, as it's hard to navigate regulatory and safety requirements. "A lot of people who don't ever operate in it don't understand and have a tendency to underestimate," he said
"They'd better think carefully if they want to get into the hard-core manufacturing," he said of Apple. "We take steel, raw steel, and turn it into car. They have no idea what they're getting into if they get into that."
According to Akerson, Apple should stick with the iPhone, which has much higher margins than a car and none of the issues with safety. As highlighted by Bloomberg, while Apple made $18 billion in December with a gross margin of 39.9 percent, GM made just $2 billion with a gross margin of 14 percent.

Akerson doesn't believe Apple should get into the car business, but he does admire Apple's entrance into the car infotainment arena with CarPlay. Speaking on his time as CEO of General Motors, Akerson said that he absolutely would have partnered with Apple. "I'd have turned over the infotainment and interconnectivity of every car."

News of Apple's electric car plans surfaced last week after The Wall Street Journal shared details on a secret project at the company. Apple is said to have hundreds of employees working on the car in a secret research lab near its Cupertino headquarters. The car, which is electric, could potentially resemble a minivan.

Related Roundups: CarPlay, Apple Car


Top Rated Comments

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19 months ago
Apple has almost $200 billion in cash....GM had to be bailed out by the tax payers.

Apple knows precisely what it's doing.
Rating: 112 Votes
19 months ago
"We’ve learned and struggled for a few years here figuring out how to make a decent phone. PC guys are not going to just figure this out. They’re not going to just walk in."

Palm CEO Ed Colligan, November 16 2006
Rating: 71 Votes
19 months ago

[url=http://cdn.macrumors.com/im/macrumorsthreadlogo.gif]Image (http://www.macrumors.com/2015/02/18/former-gm-ceo-on-apple-car/)[/url]


Image (http://cdn.macrumors.com/article-new/2015/02/danakerson-250x188.jpg)Amid rumors that Apple is developing an electric vehicle, former General Motors CEO Dan Akerson has shared his opinion on Apple's plans, suggesting the Cupertino company avoid getting into a business with such low margins.

In an interview with Bloomberg (http://www.bloomberg.com/news/articles/2015-02-18/former-gm-ceo-akerson-cautions-apple-on-trials-of-making-cars), Akerson said that Apple may be underestimating the difficulty of operating in the car business, as it's hard to navigate regulatory and safety requirements. "A lot of people who don't ever operate in it don't understand and have a tendency to underestimate," he saidAccording to Akerson, Apple should stick with the iPhone, which has much higher margins than a car and none of the issues with safety. As highlighted by Bloomberg, while Apple made $18 billion in December with a gross margin of 39.9 percent, GM made just $2 billion with a gross margin of 14 percent.

Akerson doesn't believe Apple should get into the car business, but he does admire Apple's entrance into the car infotainment arena with CarPlay. Speaking on his time as CEO of General Motors, Akerson said that he absolutely would have partnered with Apple. "I'd have turned over the infotainment and interconnectivity of every car."

News of Apple's electric car plans surfaced last week (http://www.macrumors.com/2015/02/13/apple-working-on-electric-car/) after The Wall Street Journal shared details on a secret project at the company. Apple is said to have hundreds of employees working on the car in a secret research lab near its Cupertino headquarters. The car, which is electric, could potentially resemble a minivan.

Article Link: Former GM CEO on Apple Car: 'They Have No Idea What They're Getting Into' (http://www.macrumors.com/2015/02/18/former-gm-ceo-on-apple-car/)



Phone industry incumbents all over again - circa 2007. We'll see.
Rating: 44 Votes
19 months ago
Can someone find a quote from Nokia in 2005 or 2006 saying Apple shouldn't get into the phone business, they have no idea what they're doing?
Rating: 43 Votes
19 months ago
"We take steel, raw steel, and turn it into car, but, we also file for bankruptcy because we suck!"
Rating: 43 Votes
19 months ago
This coming from company that had to get help from the government? Yeaaaaaaaaaaaaaaaaaaaa...

a lot more quotes from top executives in the automotive industry in the coming weeks.......personally, I think they're scared out of their mind
Rating: 35 Votes
19 months ago
Is it just me, or does this guy bear an amazing resemblance to Steve Ballmer?

If I could only achieve a 14% margin, I wouldn't be lecturing others how to do things better.
Rating: 32 Votes
19 months ago

Apple has almost $200 billion in cash....GM had to be bailed out by the tax payers.

Apple knows precisely what it's doing.


I knew this would be the first post. And I am so disheartened to be proven right.

Just because Apple has billions in cash from successful products, does not have any correlation whatsoever to their ability to enter a new market (both new to them and to industry as a whole) without making mistakes. I'd like to point out that in no way do I think Apple should avoid the sector, as the GM former CEO states, because as a company devoted to quality, and who has tons of resources ($$$), they'll be hopefully able to do it justice. But just because they have the means to toy around with the idea of a car, do extensive research, etc... doesn't mean they know exactly what they're doing. Generating billions of dollars in profit on consumer electronics doesn't indicate they know how to make a car.
Rating: 29 Votes
19 months ago
Palm said the same thing...
Rating: 29 Votes
19 months ago
Really?

How about working on getting your phones and computers/OS's squared away first.
Rating: 23 Votes

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