GM plans $5.5B in cost cuts to help finance new mobility

MILFORD TOWNSHIP, Mich. (AP)

General Motors plans to cut $5.5 billion in manufacturing, purchasing and administrative costs during the next three years, helping to finance a big push into autonomous cars and car- and ride-sharing services.

The company told investors Thursday that the savings in logistics, manufacturing, information technology and other costs will more than offset increased investments in brand development and new technology. Autonomous cars are also referred to as driverless cars. The robotic car is designed to travel between destinations without a human operator.

GM says it will start testing a fleet of self-driving Chevrolet Volt plug-in hybrid cars late next year at its giant technical center campus north of Detroit. It also announced two car- and ride-sharing services that it expects to generate added profits. The test Volts will be summoned by employees with a smartphone app.

CEO Mary Barra said the tests will allow GM to form a relationship with customers “for a whole variety of ways people can get from point A to point B.” She said GM plans to disrupt the auto industry in new forms of mobility.

Product Development chief Mark Reuss said the autonomous car tests aren’t being announced just to get media attention.

“We’re not doing this as a publicity stunt. This is real,” he said. He wouldn’t predict when the public will be able to use autonomous cars on real roads but hinted that a forecast would come during a presentation for analysts.