"History is littered with big companies that ignored innovation that was coming their way because you didn’t know where you could be disrupted."
General Motors will be hoping those words, from vice chairman Steve Girksy as the automaker begins to study electric upstart Tesla Motors [NSDQ:TSLA], don't become too prophetic.
They're a clear indication that major automakers are starting to worry about the startup electric automaker, as GM CEO Dan Akerson looks into how Tesla may affect the 104-year old GM's business.
According to Bloomberg, studying Tesla is just one way that Akerson is hoping to change GM's culture after its financial difficulties in 2009.
The world economic crisis and the big bailouts required as a result of it shook the major U.S. automakers out of a complacency that had let them fall behind rivals from overseas--and improvements from the Big Three are already apparent as quality, performance and efficiency climb inexorably upward.
Several internal processes at GM have changed since Akerson took the reins, but improving the company's future means improving its products too.
Most important from a technology perspective is continued development of the Volt--the next generation of which could arrive in 2015 or 2016, according to Akerson. Reducing cost will be a major hurdle to overcome, with engineers working to cut as much as $10,000 from the cost of each car.
While the Volt currently undercuts Tesla's Model S by quite a margin, rumblings of a more compact, more affordable Tesla sedan mean GM can't afford to sit around. Even this year, first-quarter Model S sales were higher than Volt sales.
It's a car intriguing GM, and no doubt plenty of other automakers too.
“In the old days, they would’ve said, ‘It’s a bunch of laptop batteries and don’t worry about it and blah, blah, blah,’” Girsky told Bloomberg, referring to GM's old methods.
Now though, things are different. "I don’t know if [the Model S is] going to work or not work. All I know is if we ignore it and say it’s a bunch of laptop batteries, then shame on us.”
The subtext? Modern GM probably wouldn't have crushed hundreds of examples of its most innovative vehicle. With Tesla Motors around, it simply can't afford to.