{"id":12400,"date":"2016-11-04T17:35:04","date_gmt":"2016-11-04T21:35:04","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/general-motors-navigating-the-road-to-a-sustainable-future\/"},"modified":"2016-11-04T17:35:04","modified_gmt":"2016-11-04T21:35:04","slug":"general-motors-navigating-the-road-to-a-sustainable-future","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/general-motors-navigating-the-road-to-a-sustainable-future\/","title":{"rendered":"General Motors: Navigating the Road to a Sustainable Future"},"content":{"rendered":"

After 100 years of innovation and growth, the horseless carriage is on the precipice of disruption from somewhere that Henry Ford could never have predicted: Mother Nature.<\/span><\/em><\/h2>\n

Global warming represents $70 trillion+ in potential global economic cost<\/b><\/h3>\n

Each year the physical effects of climate change hit us\u00a0with increasing severity. The frequency\u00a0of extreme weather events, rising sea levels, and glacier recession have grown to alarming levels. Governments are grappling with the effect of climate change on human life, but there are significant economic costs to also consider. Citi estimates that the future cost (NPV) of inaction on the world economy is\u00a0as high as $70 trillion [1]<\/a>. For context, today\u2019s global GDP is estimated to be $80 trillion[1]<\/a>. In the face of these new challenges today\u2019s corporations have three options: inaction, mitigation or adaptation\u00a0[1]<\/a>.<\/span><\/p>\n

Governments and consumers are putting pressure on the auto industry\u00a0of greenhouse gas pollution to adapt and build a cleaner, more sustainable future. This pressure has created two\u00a0principal threats: regulatory and competitive. For companies who are agile enough to respond, this seismic shift represents great opportunity.<\/span><\/p>\n

\"Mary<\/a><\/strong><\/p>\n

 <\/p>\n

“<\/strong>I believe the auto industry will change more in the next five years than it has in the last 50, as we develop new options and modes of transportation for moving us from point A to B. This gives us an unprecedented opportunity to develop cleaner, safer, smarter and more environmentally friendly vehicles for our customers.“<\/strong>\u00a0<\/em>– Mary Barra, CEO of General Motors<\/em>\u00a0<\/strong><\/p>\n

 <\/p>\n

GM faces real\u00a0regulatory and competitive risk<\/b><\/h3>\n

Enter General Motors (\u201cGM”). Can the company that introduced the world to the \u201cH2\u201d Hummer really transform it’s business and product line to be sustainable? Mary Barra, GM’s CEO, has made it clear that she believes the company can\u00a0adapt their\u00a0business to directly confront climate change.\u00a0<\/span><\/p>\n

GM faces intense regulatory pressure on both their manufacturing process and their products. The numerous regulations that govern GM are\u00a0determined by a web of state, federal and international agencies that regulate pollution\u00a0[2]<\/a>.\u00a0<\/span>These agencies regulate both GM\u2019s supply chain and their product lines. GM’s is held financially accountable for pollution or other environmental damage\u00a0originating from its manufacturing operations regardless of cause. Meanwhile, other regulations require that GM’s vehicles meet annually increasing standards for car emissions, fuel economy and sales of zero emission vehicles (\u201cZEVs\u201d)[2]<\/a>. President Obama reiterated\u00a0this point, proclaiming in his 2011 State of the Union that the United States would have 1 million electric vehicles on the road by 2015\u00a0[3]<\/a>.\u00a0<\/span>Obama\u2019s speech set off a race to create the next generation of vehicles, an electric car that would resonate with consumers pull the world into a more sustainable future.\u00a0<\/span><\/p>\n

Finding success with transparency and sustained innovation<\/b><\/h3>\n

General Motors believes that fostering conversation and investing in technology are the keys to navigating this new world of growing regulatory and competitive risk. To that end GM has made a commitment to provide full transparency for climate related data to start a dialogue and identify areas for improvement. This year, CDP, the world\u2019s only global environmental disclosure system, awarded GM perfect scores on climate change data disclosure\u00a0[6]<\/a>. <\/span><\/p>\n

At it\u2019s core, GM has always been an engineering company. They invest in\u00a0a high-level of R&D\u00a0($7.5 billion in 2015) to deliver technologies that position GM to comply with regulation and compete more effectively\u00a0[2]<\/a>. These technologies include eco-friendly propulsion (Hybrid, Plug-In, Alternative Fuel Vehicles, Hydrogen Fuel Cell, etc.) and process innovations within GM\u2019s manufacturing operations\u00a0[2]<\/a>. As of 2015, approximately 50% of GM\u2019s manufacturing operations were landfill free\u00a0[2]<\/a>. Through these innovations, GM estimates that in 2015 alone, they recycled 2 million metric tons of waste and avoided ~9 million metric tons of greenhouse gas emissions\u00a0[2]<\/a>. These incredible results have earned GM praise and in 2015 GM was the only automaker to be named to the 2015 Dow Jones Sustainability Index for North America, the leading global benchmark for corporate sustainability\u00a0[7]<\/a>.<\/span><\/p>\n

The ZEV\u00a0Opportunity: Converting\u00a0world class technology into a world class product<\/h3>\n

In 2010, GM was first to market with their Chevrolet Volt, however the Volt did not connect with consumers and in its first year only managed to sell 7,671 units [4]<\/a>. Subsequent year sales were no better, and unfortunately the Volt has never managed to exceed 24,000 annual units\u00a0[4]<\/a>. Tesla has\u00a0emerged as a strong up-market competitor\u00a0and validated the market with\u00a0sales of 50,000 Model S units in 2015 [5]<\/a>.\u00a0If\u00a0GM is to succeed in their strategy of sustainability they must convert their world-class IP library, global supply chain and portfolio of brands to compete and win in this high growth space. (780 words).<\/p>\n

Sources:<\/em><\/p>\n

[1]<\/a>: Citi GPS Report: Energy Darwinism II, 08\/15, Citi.com. Accessed 11\/03\/16.<\/span><\/em><\/p>\n

[2]<\/a>: General Motors 2015 Annual Report (form 10-k), Edgar (sec.com).\u00a0Accessed 11\/03\/16.<\/span><\/em><\/p>\n

[3]<\/a>: 2011 State of the Union Speech by Barack Obama, 01\/25\/11, The White House.\u00a0Accessed 11\/03\/16.<\/span><\/em><\/p>\n

[4]<\/a>: Chevy Volt Sales Estimates, 06\/09\/16, hybridcars.com.\u00a0Accessed 11\/03\/16.<\/span><\/em><\/p>\n

[5]<\/a>: Tesla Model S Sales Estimates, 01\/03\/16, BGR.com.\u00a0Accessed 11\/03\/16.<\/span><\/em><\/p>\n

[6]<\/a>: GM 2015 Corporate Sustainability Report, GMSustainabilityReport.com.\u00a0Accessed 11\/03\/16.<\/span><\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

After 100 years of innovation and sustained growth, the horseless carriage is on the precipice of disruption from somewhere that Henry Ford could never have predicted: Mother Nature<\/p>\n","protected":false},"author":2038,"featured_media":13129,"comment_status":"open","ping_status":"closed","template":"","categories":[1306,1093,1303,1556],"class_list":["post-12400","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry","category-alternative-fuel","category-cars","category-electric-cars","category-general-motors"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-rctom\/assignment\/climate-change-challenge-2016\/","yoast_head":"\nGeneral Motors: Navigating the Road to a Sustainable Future - Technology and Operations Management<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/general-motors-navigating-the-road-to-a-sustainable-future\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"General Motors: Navigating the Road to a Sustainable Future - 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