General Motors Co. hired more software engineers during the first half of 2021 than it did during all of 2020, according to one of the company’s top executives.
GM President Mark Reuss told the annual Mackinac Policy Conference organized by the Detroit Regional Chamber of Commerce software has grown steadily more important for carmakers as both a source of revenue and as a key to product differentiation during the past two decades.
“We used to consider ourselves as a hardware company with an electrical system,” said Reuss.
But electrical systems have grown more and more complex as the years have gone by and software is one of the keys to delivering a product customers will want to buy. “We have to deliver things people don’t even know they want yet,” he said.
“Our products are a platform for the software we are putting on top of the hardware,” Reuss said, and the new employees GM is bringing on board to create the software understand and appreciate the shift taking place in the industry.
Battery manufacturing problem fixed, GM believes
Reuss also said GM believes it has succeeded in resolving the problems causing battery fires in the Chevrolet Bolt. The fires forced GM and its battery supplier, LG Chem, to set aside $1.8 billion to cover the cost recalls, involving more than 140,000 vehicles, including the latest versions of the Bolt.
A team of engineers, dubbed the Red X Team, tracked down the problems in the manufacturing systems at LG Chem and fixed the problem so the performance of the battery will meet every expectation of GM’s customers, Reuss said.
Battery production at LG Chem’s two Michigan-based plants has resumed. The focus will be on replacing the batteries in recalled vehicles, then resumption of new vehicle production at the GM’s Orion Township, Michigan plant where the Bolt is manufactured, officials told TheDetroitBureau.com earlier this week.
Shortages continue to do industry
Reuss said he is optimistic the shortages of semiconductors will stabilize in the next few months. To help address the dearth of semiconductors, GM is even trying to help get vaccines into critical plants in Southeast Asia where the vaccine rate is relatively low, he said.
However, even if production stabilizes during his predicted timeframe, the industry is still facing what Reuss described as two “inventory holes.” The first one was created in the first half of 2020 when the industry shutdown completely in the face of COVID-19 and the second was created by the chip shortage.
Filling the inventory holes will take time and keep the industry unsettled even when the chip shortage begins to ease, he said. “We’re going to see a stabilization to some extent before we see getting the volume we really need,” Reuss said.
Paul Jacobson, GM’s chief financial officer, said recently GM’s wholesale deliveries in the third quarter could be down by 200,000 vehicles due to the shortage.
Reuss said a crucial issue for the auto industry as it transitions to electric vehicles will involve the recycling of the materials used for building lithium-ion batteries used to power EVs “There’s a lot of material in a battery cell that can be reused,” added Reuss, who said GM is following the start of the fledgling battery industry with great interest.