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Former GM CEO warns Apple against making cars

Former GM CEO warns Apple against making cars


'They have no idea what they’re getting into if they get into that.'

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Dan Akerson, who ran General Motors for less than three and a half years, issued a stern warning to Apple this week against making a car. In an interview with Bloomberg, he noted that making cars was hard. "A lot of people who don’t ever operate in it don’t understand and have a tendency to underestimate," said Akerson, who has held no other executive positions in the automotive industry. "They’d better think carefully if they want to get into the hard-core manufacturing," he said of Apple. "We take steel, raw steel, and turn it into car. They have no idea what they’re getting into if they get into that."

"We take steel, raw steel, and turn it into car."

Instead, Akerson says that Apple should focus on helping incumbent automakers with in-car electronics. (That's already happening with CarPlay, of course, but it's a drop in the bucket compared to the number of control systems inside a modern car, most of which are still designed by automakers and their suppliers.) Akerson also noted that margins on cars are typically razor-thin, while the iPhone practically prints money.

I don't know whether Apple will end up building a car; no one outside Cupertino really does. And I believe Akerson wholeheartedly when he says that making cars is extraordinarily difficult — but I also know that if you are an executive or ex-executive of a company that is not Apple, explaining what Apple should, shouldn't, or can't do almost universally backfires.

Let's look at some of the more memorable quotes.

"I'd shut it down and give the money back to the shareholders." — Michael Dell

Dell made his now-infamous quip at a keynote address not long after Steve Jobs returned to Apple in 1997. At a market capitalization of $744 billion, Apple is currently the most valuable company in the world.

"PC guys are not going to just figure this out. They're not going to just walk in." — Ed Colligan

Perhaps tied for infamy with Dell's remark, Palm CEO Ed Colligan didn't see the iPhone as a serious threat when it was introduced in 2007. He sounded a little bit like Akerson, arguing that making "decent phones" is hard. Today, Palm exists only as a bittersweet memory in our hearts.

"We're selling millions and millions and millions of phones a year. Apple is selling zero phones a year." — Steve Ballmer

To be fair, Ballmer's comments about the iPhone in 2007 were correct: Microsoft was selling "millions and millions and millions" of phones, while Apple was selling none. But his belief that the lack of a keyboard would keep the iPhone locked out of the business market ultimately proved incorrect, and today, Windows Phone is a non-entity in most major markets.