DETROIT - Whether General Motors or Toyota or, before too long, Volkswagen is the world's biggest automaker is a subject of debate. What's not in dispute is that GM, with 176 plants in 31 countries, 20 engineering centers and more than 200,000 employees worldwide, is a complex, multifaceted global corporation that commands a top position in many of the world's major auto markets.
The US based carmaker has had a rough ride in the last few years. After failing to stem a torrent of losses, GM filed for Chapter 11 bankruptcy in June, 2009, only to emerge one month later under the control of a new majority owner, the US government.
With the help of a government cash injection, GM then embarked on a recovery that involved top management changes, the shedding of brands and closing of plants, and a corporate-wide streamlining of operations.
The new GM returned to the stock market in November, 2010, and has been reporting profits and higher sales in the most recent quarters.
In November 2009, GM appointed Terry Kline to the position of vice president, information technology, and CIO. His brief: to make GM's IT operations a strong contributor to the group's recovery.
Kline, an engineer with a business degree, joined GM in 2000, held several product development positions and spent three years in Asia as the CIO for GM's regional operations before returning to the US.
GM's information technology is playing an important role in the effort to restore the company to profitable growth. IT helps GM become more efficient, boosts innovation in the company's electric-car efforts and makes sure the group's computer operations are protected from cyber attacks.
Kline, 49, spoke with automotiveIT about his challenges and successes, the turnaround in the company, and his priorities for the future.
automotiveIT: Where does IT fit into GM?
Terry Kline: The first dimension for IT at GM is the desktop, the back office, e-mail systems and Web sites. Then there is Onstar, which is the IT business that GM runs. It creates IT services that we sell. And the third dimension is the business itself, where we help to drive innovation. Crash testing is an example, mobile apps is another area where we're pushing innovation. That's all new. Just 18 months ago, we didn't have any mobile applicationstalking to the vehicle. We've come from nothing to the present, where you can remote-start your new car from your smartphone or check basic capabilities.
automotiveIT: And what are some of your top priorities?
Kline: My number 1 priority is protecting General Motors electronically and that's more difficult when you're a global company. As a global company you're a bigger target. You've got more geography to be attacked at. Either someone is trying to steal your data or somebody is trying to shut your Web site down. Data, intellectual property, the next design of a vehicle, it's all information that needs to be protected. So clearly that's a challenge when you're a global company.
automotiveIT: And what do you do specifically to protect the company electronically?
Kline: That's definitely an area we don't scrimp on. We make the right investments. Some things such as hard drive encryption are very simple. We use Wave software, an off the shelf product. We made a decision that every drive needs to be encrypted, even in the back office and the data centers. You can't leave that to the users. We're also encrypting removable media. If you write to a memory stick, it will ask for a password. In addition, we don't really want people emailing CAD files outside of GM, so we put tools in place that watch who's trying to do that. We're doing a lot of data loss prevention.
automotiveIT: How do you deal with the security issues involved with 100s of thousands of employees using different end-user devices to access your systems?
Kline: We have hundreds of employees who have their own smartphones and they have loaded our tools so they can get their e-mails on them. They have to sign a piece of paper that they will tell us when their phone is stolen and will allow us to remote-wipe it. Each device also has to support encryption, which is why we won't load our applications on some of the older iPods (which don't allow encryption).
automotiveIT: And where is this trend heading?
Kline: I think the mobilization of IT is only just starting. Whether it's with an iPad, a smartphone or a computer, people will be able to work from any device they have. My peers may call me crazy but I predict computers will be like calculators. Most employees can have whatever device they want to do their job. Maybe five years from now, we'll move the standard desktop to the other side of the firewalls that surround the data centers. Employees will be considered hostile until they prove they're not.
Kline: Smartphones are definitely a challenge and as long as you have everybody writing their own operating systems, that challenge is going to be there. But we throw a lot of stuff out to our own IT people for testing. That's one of the biggest changes in the new GM: We're a lot more open to run tests. It's OK to try something and fail. One test is worth a million expert opinions. And if we fail, let's fall forward and get an extra half a step, stumble and keep going. I'd rather do that than study it.
automotiveIT: Do you see other major trends beside the mobilization of IT?
Kline: The second thing I see is the consumerization of IT and it's related to the mobility trend. Everyone's getting a smartphone and if they don't have one they want one. So we've created games for smartphones and pushed a lot of functionality of the vehicle to the phone. You also see the mobility trend in our push to let people use any kind of device anywhere. When I leave GM for the day, I don't take my GM PC with me. I can do everything from my MacBook Air and the system puts nothing on my machine. I don't have to carry a machine all the time and it's not a big concern if a laptop gets stolen as it has no data on it. Most of the data are in our private Cloud.
automotiveIT: You sound like you're a fan of Apple products.
Kline: We have a number of Macs in our environment. We've always had them in our design centers. We've added them in the fleet for our executives and have put our standard desktop build on our MacBook Airs specifically. The attractiveness is that they don't weigh anything, have instant on and no boot time. Those are all things the Windows environment still has to catch up with.
automotiveIT: So do you also allow iPhones on your networks?
Kline:As I mentioned, I think the computer or the Google Chrome device etc will eventually become like a calculator. We don't buy your calculator today and we're not going tobuy your computer. You'll probably have three or four of them and will be able to use whichever one you want. We'll design the apps to get there. We'll support your iPhone if you own one, but we won't buy you an iPhone because of the cost differential. With Androids or Blackberry models, we just get better deals.
automotiveIT: GM has gone through a very difficult phase financially and it’s still not out of the woods. How does that affect IT operations?
It's been quite a roller coaster from the time when we tried to get rid of everything and shed costs to the present, when we're turning plants back on and are running full shifts. When we went through bankruptcy, we couldn't shed structural costs fast enough. So we tried to react and follow the company's footprint optimization around the world from closing plants in the US to selling parts of things around the world. This year it's switched back the other way. For example, we restarted the Lordstown plant, where we build the Chevrolet Cruze, with three shifts. So we go from not running the plant at all to three shifts and that's a challenge. You try to figure out how to do this. When to do maintenance becomes an issue. And our data volumes and other parts of IT were sized for a certain dimension. We're now trying to get as much out of our IT as possible without raising structural costs again.
automotiveIT: What kind of role does IT play in restoring GM to profitability and growth?
We have different goals and targets. A target may be to execute a particular project that will allow me to get into the aftermarket business and generate 100 million dlrs of EBIT. Another target is tohelp me turn more leads into sales on our websites. Or to get more efficiency out of the average employee across this enterprise. Most use standard desktop tools. If I can make them 5 minutes faster, we get time back and employees can become more productive.
automotiveIT: Do you have the budget to do what you need to do?
Based on our benchmarking we're in the middle of the pack and there's no reason why we shouldn't be as good as anyone from the point of view of structural costs. One thing we're benefiting from is a clear decline in hardware costs. Software costs are not being lowered as much, but we're keeping an eye on open-source software, which could provide a competitive offering in some areas.
automotiveIT: How do you measure return on IT investment?
Kline: On Knowledge-based engineering (KBE) modules it's just math. If we're going to do something four times faster, then we get four times more efficiency. In other areas it can be more complex. For example, if we can get better car traceability of cars to their VIN (vehicle identification) number, that will help us limit the number of vehicles we have to look for when there is a recall. And that saves money or avoids costs. In the case of Onstar, we measure on the basis of revenue. We're getting ready to announce a Family Link application for Onstar, which allows you to track your car, for example if you want to know where your teenager is driving. We're going to sell this product when we're done.
automotiveIT: Your IT operation supports various groups of internal customers within GM. Which is the biggest and the most demanding?
Kline: Probably the biggest customer is Onstar because it's really an IT business. The most demanding customer is probably the product development guys, who live in a world that's so rich in opportunity. Every 18 months our high-performance computing capacity doubles in terms of pure horsepower. It's been like that for the past 10 years. It's a huge investment, though, interestingly, we spend the same amount of money each time we double.
automotiveIT: Why do you need all that computing power?
Kline: As we get more power we can now solve more problems. In other words, more problems come within the realm of the computer being able to solve them as the horspower gets bigger. For example, rendering in 3-D; we can now do drawingsand animation that we wouldn't have thought possible only six or seven years ago, when we just didn't have the graphics capability.
automotiveIT: And why are costs not rising?
Kline: A work station 12 years ago would have cost 30,000 dlrs. Now you have a device on the desktop that costs 2,000-to-3,000 dlrs and it's one of the most powerful CAD seats you can buy. We have to thank all those young gamers and the movie guys for this. We wouldn't have had this software if it were just the car guys using it.
automotiveIT: With regard to PLM software, you are sticking with Siemens' NX and Teamcenter when many of your competitors are either switching or contemplating a change?
Kline: Â We first went to Teamcenter in the 1980's and sort of grew up with them. In the early years, we were ”“ and still are - one of their big customers and drove a lot of the requirements. PLM used to help manage mechanical parts. And as the car has morphed from mechanical to a car with more electrical components to a car that has software in the vehicle, PLM has chased this morphing of the vehicle. Now you want to manage and watch the lifecycle of software versions in the vehicle. And you want to watch whether the recyclability of pieces of the vehicle is line with the laws in different countries. Just when you think you've got it figured out, it changes again.
automotiveIT: Where do you see the trend toward ever more virtualization going?
Kline: In 3D, you still put on goggles today, but there will be a time when you don't have to do that. Holographics willbe on bigger screens and in production systems. As computers get bigger, we'll be able to solve problems we consider impossible to solve today. We'll keep pushing the envelope and, as computers get bigger, we'll be able to do more on the fly. For example, we'll be able to know exactly what the car weighs right away.
automotiveIT: How much Cloud computing do you do within GM and how much will you be doing?
Kline: We do a lot of stuff in the private cloud, but not so much in the public cloud. There we have limited our activities to some preproduction development environments that we can take up and down based on the need. The other thing we've done there is buy some capacity for a couple of weeks if we think we'll get huge web hits and need a lot of capacity for our Web sites.
Kline: We're cautiously optimistic about running a lot of stuff in the public cloud. The biggest concern is security. If you're a small company it would be a different converstation, but we are bigger and we can use a whole server. We don't have to share a server. But I would be really surprised if, in a couple of years, a lot of corporations wouldn't be in the cloud for for basic things like email, document management and that kind of stuff.
automotiveIT: We've talked about Apple, but another giant in the Web 3.0 space is clearly Google. How do you rate that company as a business partner?
Kline: The pace at which Google has closed the gap with their application suites to the competitive packages is amazing. We've been really closely involved with this. From a personal perspective, why wouldn't you put all your photos and anything you want to share with your family on Google. In the corporate area, Google has spent a lot of time understanding enteriprise requirements. They're taking it very seriously and they can close these gaps very rapidly. The pace of improvement in their tools is amazing.
automotiveIT: Do you work directly with Google?
Kline: Our experience with Google has been very good. Over 50 pc of our employees have a gmail account. We do some things in the Onstar area, where we use some of their voice recognition tools and we use Google maps. We're always looking to do other things with them.
automotiveIT: How much of your time is spent on car IT?
I would say one day out of five I'm discussing capabilities into the vehicle, the actual product. That's a significant amount of time. When I was CIO in Asia I didn't spend so much time talking about the vehicle. One of the things the bankruptcy did at GM was that it really knocked down silos and let the organization work seamlessly across silos. When you go into bankruptcy you don't have any turf to protect. Everybody suddenly has a common focus.
Interview by Arjen Bongard, editor, automotiveIT.com