Ex-GM CEO to Apple on Car Rumors: 'Think Carefully'

Feb 21, 2015 08:00 AM EST | Matt Mercuro

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Former General Motors CEO Dan Akerson has some advice for Apple regarding rumors the Cupertino-based company is thinking of entering the car business: think carefully.

"They'd better think carefully if they want to get into the hard-core manufacturing," Akerson said of Apple during an interview with Bloomberg. "We take steel, raw steel, and turn it into car. They have no idea what they're getting into if they get into that."

Akerson said Apple could be underestimating how hard it is to run a car business as it's hard to work around regulatory and specific safety requirements.

 "A lot of people who don't ever operate in it don't understand and have a tendency to underestimate," he said.

The former CEO thinks Apple is better off sticking with iPhones and iPads, which has higher margins than a car and none of the safety issues. Apple made $18 million in December, with a gross margin of 39.9 percent. In comparison, GM made $2 billion with a gross margin of 14 percent, according to Bloomberg.

Though he doesn't agree with Apple's supposed plans to enter the car business, he does like Apple's entrance into the auto infotainment world with "CarPlay." He said if given the chance when he was CEO of GM he definitely would have partnered with Apple.

"I'd have turned over the infotainment and interconnectivity of every car," said Akerson.

Rumors of Apple's electric car plans leaked last week after The Wall Street Journal reported plans on a secret project called "Titan." Apple supposedly has hired "hundreds" of new employees to work on the project in a secret lab near its Cupertino headquarters.

Apple has supposedly been talking with companies on auto technology and car design advice, according to The Journal. No news regarding an electric Apple car has been confirmed by the company officially yet. 

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