GM Unveils New Venture Capital Subsidiary
DETROIT — General Motors announced the creation of a venture capital subsidiary on Friday that the automaker says can help it build new automotive and transportation technologies to deliver to consumers.
General Motors Ventures, LLC — which officials contend will also help the company in its attempt to foster relationships with other venture capital companies — will be headed up by Jon Lauckner.
Lauckner, who was GM vice president of global product planning, will move to his new position of GM vice president and president of General Motors Ventures on July 1.
He will report to Stephen Girsky, the automaker's vice chairman and vice president of corporate strategy and new business development.
There is already a $100 million initial investment in the subsidiary, and officials said General Motors Ventures is looking at equity investments in various auto-related technologies and business models, officials said.
"We are constantly looking for ways to deliver the best technology for our customers," Girsky explained. "Our goal is to nurture these innovative technologies to help bring them to market, and to ensure our customers have access to the best technology available."
Good Step for GM?
Friday's news perhaps is an indication that GM recognizes it could benefit from some assistance in the technology arena, Edmunds.com senior analyst Jessica Caldwell told Auto Remarketing.
And while saying that hiring someone from within GM may be somewhat of a curious decision given the nature of the project and the automaker's penchant for leaning on outsiders in its hires over the last year, Caldwell said overall the move is positive and a step in the right direction.
Although typically, these types of moves are done in the technological field rather than the automotive segment, "Those two worlds are converging more and more, so it makes sense that they're doing this," she noted.
Offering his perspective, James Bell, executive market analyst for Kelley Blue Book's Kbb.com acknowledged that this decision may be found to be "a bit disjointed" to some, but stressed that this marks a proactive measure that can help distinguish the new GM.
"Word that GM recently set up and funded a separate venture capital subsidiary may strike many in the industry and general public as a bit disjointed for a company not yet cleared from its responsibility and reliance on the U.S. government," Bell stated.
"Common logic would suggest that taking care of core competencies, i.e., making and selling the best cars and trucks in the industry, should be top priority," he added. "But, this news also makes a positive step toward a successful long-term future and even more attractive IPO in the next year or two.
"The fact that GM is doing more than just ‘talking' technology and no longer making empty promises is a key difference between the old GM and the new GM," Bell continued. "In fact, this new venture allows GM to actually invest and integrate tomorrow's technology at a grassroots level, with an eye toward America's future driveways."