Apple hairball? Ex-GM CEO says building cars may not be worth it

“Dan Akerson, retired chief executive officer of General Motors Co., said Apple Inc. should steer clear of the business of making cars, though a push into automobile electronics would be a better move for the iPhone maker,” Tim Higgins reports for Bloomberg.

“‘I think somebody is kind of trying to cough up a hairball here,’ Akerson said in a telephone interview. ‘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,'” Higgins reports. “The car industry, with regulatory and safety requirements, is harder than people realize, Akerson said. ‘A lot of people who don’t ever operate in it don’t understand and have a tendency to underestimate,’ he said.”

Read more in the full article here.

MacDailyNews Take:

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.Ed Colligan, Palm CEO, November 16, 2006


  1. Apple is not building cars. Rumor Mongers have Apple building cars. If he were an Apple Shareholder he would be very happy, because he’d be making a lot of money. If he were an Apple Rumor Monger he would be very sad, because he would be losing money.

    1. I think I might take the opinion of a former CEO of a large auto manufacturer a bit more seriously than any wall street do of us or random forum poster when it comes to building cars but that’s just me.

    2. I certainly can’t speak to all of General Motors, especially not the GM of today. But my 2001 Suburban is about to cross 300,000 miles on almost everything original (tranny rebuild 60K miles ago). I’ve owned Fords, Chevys, Dodges and Toyotas — no religious patronage here.

      I have never owned a Windows computer, though — that’s just to ensure this post doesn’t get moderated over to CarDailyNews.

      1. My 2002 Suburban was awesome.
        My 2008 Suburban is burning oil. It seems GM installed AFM (automatic fuel management) into the engines to meet government-mandated standards. The AFM causes premature ring failure and oil burning.
        Every time the U.S. government gets involved, the working man gets burned.
        We need less government today!

    1. To be fair, there is logical explanation have Microsoft got where it is now: through deceiving business practices, IP theft, blackmail, criminal anti-competitive practices and bribes.

      Of course, some of their products are good, so I am not saying that they totally cheated their way into power. But major part of it is still corruptive business ethics (or lack of it).

      1. Another reason that MS-DOS plus the Windows shell (it wasn’t an OS originally) took off was they were much cheaper than Macs. Then Apple lost its ability to keep up with basic OS capabilities (like true multi-tasking).

        So a combination of Microsofts scrappiness and Apple’s poor execution gave MS clear sailing.

        Another reason is that most PCs were sold to businesses back then, and MS’s roots came from bending over backwards to get every third party contract they could even with their first products such as Basic interpreters. Apple would never do that, so was limited to a much smaller mostly consumer market.

        Microsoft’s “evil” tactics happened mostly after Microsoft was already in the lead.

    2. At the same time, there are huge differences between the car market and phone/mp3 player markets before Apple launched. I would argue that there is a much more justified need for a large variety of different types of cars – irrespective of budget. As many problem with car manufacturers as there clearly are, I wouldn’t say that the car market is stagnating in quite the same way as the phone market was – except perhaps in software. This is not to say there isn’t room for someone like Apple to come in, but I don’t think the door has been left open quite like it was with other markets. As much success as Tesla has had, they’re still small in the grand scheme of things, and they’re arguably the most Apple like non-Apple company.

      1. One could argue that, in the developed world, the most common type of car is a five-passenger sedan (such as Toyota Camry, or Honda Accord). One could further argue that there are at most six distinct car categories out there, from the smallest city sub-compact (such as Fiat 500, or Ford Fiesta) to the largest SUV. If Apple were ever to enter this industry (which I still strongly doubt), they could begin with the sedan, (iPod classic), then build the other sizes (mini, nano, shuffle, touch) in order of popularity, depending on the success of the first model. Unlike some car manufacturers who maintain fifteen different models and sizes, Apple would likely do what they had been doing since Jobs’s return — simple, straightforward product line-up, covering 95% of the consumers’ needs. The remaining 5% is left to the rest of the competition.

  2. The Ex-GM CEO says building cars may not be worth it but that’s not really the point is it? The point is that jouranalists are peeing themselves and writing article after article about the  car, who is working on project Titan, what the color of the car will be, why a van will come out next, how the industry experts will weigh in and how much the stock will take a fall once it’s all found out to be conjecture. Courtesy of the manipulators of course.

    1. Sure there is! It’ll come in three colors initially: Gold, White and Space Grey.
      Later there will be Special Editions that come in Blue Tooth and Blue Ray.
      And finally, Bono will be promoting the Project RED edition.

      There will be the Apple Van mini and the Apple Van Pro.

      The convertible will be the Apple Van Air.

      All models feature audio by Beats.

      There will be a limited edition Bose model targeted at the 50 year-old crowd called the Apple Van Halen.

      The doors and ignition use TouchID, but if you have an Apple Watch the doors unlock as you approach.

      FindMyVan is built in to all models.

      That’s enough leaks for now. More later, but you can probably figure it all out.

  3. Interesting that he would have turned to Apple for all of GM’s infotainment and interconnectivity. I think that’s exactly what Apple is doing. Clearly auto makers have ‘failed’ and need help. Once even on manufacturers partners and gets it right the opportunity for Apple is much bigger than making a car.

    1. Presently ever auto if filled with electronics that service uses to check and repair your car. If Apple builds an interface to all of those systems (as well as providing infotainment and interconnectivity) with a decent interface there’s unlimited potential.

    1. look at how they build the mac pro. look at how they extrude the cover. perhaps apple wants to change manufacturing. look at Tesla. They have no legacy junk or code or bad practices, etc. that gas automobiles are strapped with. It’s a new industry with new materials and there is no reason that traditional automobile companies should have such an exaggerated competence in electric cars as compared to a Tesla.

      1. “Gas automobiles” are vastly superior to electric automobiles in the things that matter most to consumers. It is ridiculous to denigrate “gas automobiles” in the same way it would be to mock “coal powered computers” which is what Macs and iPhones and iPads are. Gasoline is the absolute most efficient power source for personal transportation by far. There are some people who think electric cars run on electricity that comes from the sky. In fact, they run on electricity from coal power plants or nuclear or hydroelectric or natural gas. That is the reality.

        1. Gasoline is probably the least efficient power source out there. A fraction of the energy available in the gasoline is actually used for propulsion in standard combustion engines; most of it ends up dissipated as heat. While the efficiency has been improved over decades, the ratio is still extremely poor. The only advantage cars with internal combustion engines have over the electrical ones is that gasoline still has advantage in storage, in that amount of energy per unit of volume and weight is higher than what current batteries offer. In other words, the amount of gasoline needed to, say, drive 600 km weights less than the amount of batteries needed to store electricity to drive 600 km (all else, such as engine power output, car weight and size, etc. being equal, of course). But make no mistake, induction electric motors are significantly more efficient at converting electric energy into power, and have been ever since Nikola Tesla invented them (over 120 years ago!).

          Even in America, where coal-fired power plants represent a rather high percentage of electrical energy sources (as opposed to the renewable sources, such as hydro, nuclear, wind and solar), when compared to the other developed nations around the world (with stronger hydro and nuclear share), it is still more energy-efficient (and less CO2-emitting) to charge an electric car from the public power grid then to burn gasoline.

          I think the only superiority of gasoline-powered cars to the electric cars today are the convenience of the gas station network (vs. the charging process of electric vehicles). This isn’t such a major problem, though. Despite this lack of convenience, today’s interest in electric cars, especially in the developed countries (other than America) vastly outstrips current availability of electric cars. In other words, there are many people out there who would gladly buy an electric car (with all the charging inconveniences of today), but the few models that are currently available (Nissan Leaf, Chevrolet Volt, Tesla…) don’t meet their needs. It is the auto and oil industry’s persistent sabotaging of any development of electric vehicle technology that is preventing more rapid growth of electric vehicles.

  4. “highly suspect of the long-term prospect of getting into a low-margin, heavy-manufacturing business”

    I’m getting tired of hearing people say this. Any market Apple decided to enter, we can all be sure, it will not be a low-margin business. Furthermore, it’s only low-margin because that’s where these companies decided to shift towards – quantity over quality. I have a feeling Apple would sell their car in a price region that would ensure a higher than industry average margin.

    Second, everyone points out industry-redefining products when the talking heads start to poo-poo any of Apple’s ambitions, but there’s a move they made over a decade ago that is even more applicable to entering wholly different markets that they have no experience in; their retail stores. Apple opened these during a time when retail was in a downward spiral. Everyone thought Apple was crazy to even attempt it and many predicted Apple would shut the doors after only a couple of years.

    Furthermore, Apple has many, many years of manufacturing expertise. They used to build all their own computers until the mid-90’s. They currently tool their contractor’s factories to ensure they get the output they need. They built a state of the art assembly facility in Texas for the MacPro. They manufacture the modular concrete slabs that make up the floor and ceilings of the Campus 2 building in their own factory.

    Are they making a car? Who the hell really knows? Is it a ridiculous notion that they may eventually do so? Absolutely not. Same with a full blown TV. There’s technically or financially no reason why Apple couldn’t or wouldn’t. They only thing that’s stop them from doing anything is their ability to say, “Not good enough!”

    1. The thing is, a company might be able to make a more efficient car, but if you’re having to pay for it, then that’s in many ways what a Tesla is. If it has better software, again (to a much lesser extent) that’s what a Tesla is. The primary function of a car is to get you A to B, you can have the most amazing car in the world, but you’re still stuck on the same roads along with everyone else, there’s not exactly the same stop to add functionality to the simple premise of driving somewhere – beyond what they might be able to do with CarPlay.

      If they went the niche route, yeah they might be able to make some highly profitable car, but they’d be unlikely to sell millions of them, so the profit is not going to be huge in comparison to existing markets. This is not to say that every product Apple launches has to be bigger than the last, but to me, making the entire car is kind of like making a full Apple TV wherein they’re essentially just adding a monitor to whatever they could still put in a standalone Apple TV box. I see the most value being in the services and integration of CarPlay – which can work in essentially any car on a pretty much one size fits all basis. Why faff around with the wheels?

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