General Motors takes a look under Tesla's hood

Wed Oct 2, 2013 5:47pm EDT
 
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By Ben Klayman, Rory Carroll and Paul Lienert

(Reuters) - In Wall Street's retelling of the biblical Book of Samuel, General Motors Co (GM.N: Quote) is Goliath and electric car maker Tesla Motors Inc (TSLA.O: Quote) is David, the would-be giant slayer.

Tesla's market value has soared 470 percent this year to $23 billion, while GM has risen a relatively modest 25 percent to $50 billion. At this pace, if the bubble doesn't burst, 10-year-old Tesla could eclipse 105-year-old GM next year.

Faced with this prospect, GM Chief Executive Dan Akerson and Vice Chairman Steve Girsky assembled an internal task force to study Tesla's playbook, test-drive its best-selling Model S and figure out what lessons might be applied. Dubbed "Team Tesla," the group included members from product planning, engineering, manufacturing and sales.

"History is littered with companies that knew what was coming and couldn't do anything about it," Girsky, 51, said in an interview in New York last week. "We can ignore it and cover it up, or we can figure out what we're going to do about it."

Girsky, who like Akerson was an outsider with Wall Street experience, is intrigued by Tesla's potential to disrupt the auto industry's time-honored business practices.

In unusually frank praise for a competitor, Girsky said Tesla was "revolutionizing the business model ... not just how you put an EV (electric vehicle) together (but) how you go to market with something like this."

GM is not likely to copy Tesla's innovative retail system, which relies more on shopping malls and social media than on traditional dealerships that are protected by state franchise laws.

And it's too soon to say what other Tesla tactics the GM team will emulate. So far, GM has focused on such technical aspects as Tesla's low-cost battery pack, the exceptional 200-mile-plus range of the Model S, and the company's out-of-the-box plan to provide free electricity to owners at an extensive network of EV charging stations.   Continued...

 
General Motors Vice Chairman, interim President of GM Europe and Chairman of the Opel Supervisory Board Steve Girsky smiles during the start of the Opel Adam car production in Eisenach in this January 10, 2013 file photo. REUTERS/Lisi Niesner/Files