Commentary
The heading refers to Mary Barra, in her tenth year as the CEO of General Motors, now facing another challenge, which I believe is of her making.
“Mary, Mary, quite contrary,
How does your industry grow,
With Silverado trucks, And Equinox EVs,
And Buick Enclaves all in a row.”
While Barra faces a serious business challenge, I chose the old English nursery rhyme, “Mary, Mary, Quite Contrary,” to add a bit of levity to the fix she and the other auto industry CEOs find themselves for caving to the Biden administration’s all-electric fantasy.
This week, the first female leader of a major automaker, who went out on a limb to make GM the leading producer of electric vehicles, has turned to its white-collar employees for help.
“We need your help!” she e-mailed thousands of employees, encouraging them to use scripted talking points to lobby senators, many of whom were behind the Biden all-electric goal.
The goal is to nullify a 2022 California measure that would ban the sale of new gasoline-powered cars and trucks by 2035, a mandate that has since been adopted by 11 other states.
EV sales are sputtering as discounts are drying up. EV sales fell five percent in April while the wider car market grew by 10 percent.
It was in May of 2021 that Barra bet $27 billion on making GM an electric-only vehicle company, announcing that the company was going to reinvent the carmaker, and throw everything it had into the effort, saying, “We’re bringing the might of GM to bear.” It included an investment in the launch of 30 new EVs by 2025.
It was a big decision for Barra, who saw record profits under her 10-year stewardship. Wall Street viewed her as a dynamic executive, describing her as a “visionary.”
Of course, she had government involvement in the go-electric business, and she was expecting regulations that would outlaw combustion engines by the middle of the century. She wanted in on the $174 billion the Biden administration was touting with its mandate of 40 percent of all sales be electric by 2030.
At a meeting with shareholders in February of 2022, she spoke of increased investment even though profits declined in the fourth quarter with sales dropping off significantly.
By the end of that year, she told automotive reporters she wasn’t buying the premise that some drivers would forever resist giving up the gas pump for a battery recharging station.
In the third quarter of 2023, investor Warren Buffett, with a major stake in GM, sold all of his shares without explanation. Shares were down 10.5 percent under Barra’s tenure and off by nearly 50 percent from a high in January 2022.
With no consumer demand for electric vehicles, Barra began cutting back on EV spending. And in December 2023 she was touting GM’s hybrid technology, believing there would be a market for them, but failed to give a timeline.
In February 2024, during an appearance at an investor conference, Barra described 2024 as GM’s “year of execution,” describing plans for both EVs and internal combustion vehicles. Many investors saw it as a softening of GM’s all-in on electric vehicle stance, while she insisted she would reach a goal of basic profitability on EV’s by the second half of 2024.
So far, so good? As GM reported a 37 percent gain in adjusted pretax income for the second quarter, with strong sales of gasoline-powered pickups and SUVs and improving sales of EVs, it gave guidance for full-year earnings, but with no mention of profitability on EVs.
Meanwhile, over at Ford, where CEO Jim Farley was behind his company’s pursuit of EV success, after folding to the Biden fantasy. In its first quarter of 2024 statement, he reported EVs continued to be a drain on company funds, losing $1.3 billion for the quarter, twice that of the same period in 2023.
It reported a loss of $130,000 per EV on just 10,000 EVs moved in the first quarter.
President Trump is not totally opposed to EVs, suggesting consumers should be able to buy the type of car they choose, but will cut the incentives to purchase an EV. Biden’s far-fetched effort to build charging stations across the country will be addressed. His EPA administrator Lee Zeldin is taking a realistic look at Café standards.
Mary, Mary … Barra that is … had a vision that was certainly quite contrary to mine, but it’s difficult for me to question one of the most powerful business leaders in the world, who has a record of sustained success at GM. But I still believe the automakers went weak-kneed on Biden’s overly ambitious all-electric fantasy.
May God continue to bless the United States of America.
