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GM Canada’s Stephen Carlisle: ’Do we have the sense of urgency?’

GM Canada president Stephen Carlisle on what it takes to compete in the global economy
Cadillac CTS
File-This July 14, 2010, file photo shows Cadillac CTS vehicles being displayed outside the LaFountaine Cadillac in Highland Township, Mich. General Motors’ safety crisis worsened on Monday, June 30, 2014, when the automaker added 8.2 million vehicles to its huge list of cars recalled over faulty ignition switches. The latest recalls cover seven vehicles, including the Chevrolet Malibu from 1997 to 2005 and the Pontiac Grand Prix from 2004 to 2008. The recalls also cover a newer model, the 2003-2014 Cadillac CTS. GM said the recalls are for “unintended ignition key rotation.” (AP Photo/Carlos Osorio, File)

Like other Parliament Hill journalists who trooped over to the Public Policy Forum’s Growth Summit in Ottawa’s convention centre this week, I was mostly drawn by the big cabinet names taking part—Finance Minister Bill Morneau and Innovation Minister Navdeep Bains—plus Justin Trudeau’s designated economic deep thinker, the suave global business consultant Dominic Barton.

But I ended up being intrigued to hear the voices of a less familiar species in the Hill’s power ecosystem—the corporate heavy hitters who are trying to be heard as Justin Trudeau’s government puts policy flesh on the rhetorical bones of its “inclusive growth” promises.

Among them was Stephen Carlisle, president and managing director of GM Canada, who participated in a panel. Carlisle’s international GM resumé is impressive, including stints heading global product planning and running the auto giant’s Southeast Asia operations. Born and raised in Woodstock, Ont., and educated at the University of Waterloo, Carlisle came home in late 2014 to head GM Canada.

He caught my attention during the panel when he asked a string of rhetorical questions about this moment in the global economy. “Do we have the grit to really go after it? Do we have the sense of urgency?” Carlisle asked. “Do we feel a kind of existential threat where we really mobilize quickly enough to take advantage of the opportunity?”

I caught up with him a few minutes later outside the conference hall, and this is an edited transcript of our conversation.

Q: Before we get into the broad questions, can you give us a sense of where GM Canada stands today? We think of it in terms of manufacturing and assembly, but you’ve been stressing research, design and software development.

A: Our historical role has been more on the manufacturing side, assembling vehicles and power trains and components. That’s still critically important, our core business, and it will be for the time to come. But the huge opportunity that we see is in the emergence of these connected, electric, shared, autonomous mobility systems. And the reason we get excited is that it’s intensively software-related. You know, a computer on wheels—that’s the next big mobility device.

Q: How does Canada take advantage of that sort of change, rather than being swept aside?

A: In Canada, and in Ontario specifically, we produce more STEM [science, technology, engineering and mathematics] graduates than any other jurisdiction that we can measure, certainly more than southern California, which gets the reputation for innovation. You know, we look at cities like Markham, Ont., where we recently announced we’re building out a new software engineering centre, which has the highest concentration of [STEM grads] of any city almost anywhere in the world.

We have more Ph.D.s in artificial intelligence and machine learning in Toronto than anywhere else in the world. So we see that as a pathway to growth. We can put ourselves on a path of inventing things to manufacture, and getting into the supply chain from the very beginning, versus relying on manufacturing things that other people have invented.

Q: That sounds very upbeat. What are the challenges, the worries? I’m assuming it’s not a done deal that Canada is going to conquer the world.

A: Well, the challenges are [that] we’re competing with other jurisdictions. Maybe we had the benefit of seeing the opportunities slightly ahead of everybody else. But there are a lot of other jurisdictions in the world that see the value in stepping into this space and claiming a stake in it. So that puts that pressure on us to put our best foot forward and make the most positive case for this as the best jurisdiction in the world to do that work.

Q: We also often hear, though, that Canadian business is cautious about investing in new machinery and equipment, slow to jump into new markets. Is there something to the idea that we lack a culture of innovation and risk-taking?

A: You know, in the innovation space, we’re good at inventing—we’re less good at commercializing and scaling. We want to encourage entrepreneurs and startups to organically grow from the bottom up and scale. But I think we also need to figure out, “How do we work with multinationals to scale globally and quickly, because time is really important here?” These windows open and then they close and, you know, we need to be able to jump into them and take advantage.

Q: Sometimes politicians are hesitant to talk about big, established corporations, and prefer to talk about throwing government support behind small, entrepreneurial firms.

A: I’m not discounting that. That’s important, but, you know, we’ve got to do the math as well. The size of the contribution that the auto industry represents is very well publicized, the contribution to GDP that the auto sector makes year in and year out. We have to preserve that and to grow it, which means we need to move into these other areas. Ask yourself: How many startups do we have to do to make that big a contribution? Answer: a lot. So we can’t give up on the auto sector. We have to find new ways to continue to grow and participate in ways that we can truly compete.

Q: Innovation Minister Navdeep Bains is talking about the government throwing federal support behind what he describes as three to five industry clusters. You’ve said you like that approach. Can you elaborate on why?

A: We’re a small economy in global terms. We’re export-dependent. We can’t necessarily wait for the free market to sort out what’s important and what works. So I think there’s an opportunity where we can be more deliberate in terms of choosing where we want to win and focusing our resources.

I agree with what has been said about not picking companies. But we should be thinking about, Where can we pick clusters? Can we pick value streams? Can we pick technologies where we think we can win, and then concentrate our efforts? You know, the feeling I get a little bit is that we’re a bit diffuse today and we might not be getting maximum productivity out of all the money that we’re putting into R&D and into universities.

Q: If the government is going to focus its support on a few clusters, as Bains indicates it will, do you think they have to be ready to lose some of those bets?

A: Yeah, I think that’s inherent in innovation, right? In entrepreneurial business, you know if you’re not failing sometimes, you’re not trying hard enough. In our traditional business, not every vehicle program works right for whatever reason. Hopefully it’s because the market shifted and not because of our execution, but not everything works out all the time.

And that’s part of it. They say if you’re not living on the edge, you’re taking up too much space. You know you’ve really got to be pushing the envelope, which means we are going to fail sometimes, and we’re going to have to step back and start over so we can move ahead again.

Q: What’s it like working with governments in Canada compared to other places where you’ve held senior jobs for General Motors? Does the relationship feel close enough? Too close?

A: Singapore is an excellent example of a society that makes choices. They’re surrounded by all sorts of threats as well as opportunities, and they’ve done an awesome job. I’m not advocating their system of government or anything, but from a policy perspective, they’ve made excellent choices in terms of growing an economy from this level, to that level, to that level, and making significant right-hand turns along the way. That’s maybe an extreme example of choosing lanes. But as I sit here, I think of my days when I was living in Singapore, and I had their Economic Development Board knocking on my door every month. We could have a little bit more of that than we have today, I think.