GM Pushes Hard with OnStar

When General Motors (GM) launched its OnStar telecommunications business in 1996, management planned to put the safety, navigation, and communication service in all GM cars, enabling motorists to plan travel, make phone calls, or even track stocks from behind the wheel. GM figured subscription and fee revenue from electronic services could get so big that OnStar's profits might surpass those of its car business. That proved true: OnStar was modestly profitable while GM's car business lost $101 billion from 2005 until the company's 2009 bankruptcy.

Now, with former telecom executive Daniel F. Akerson in the chief executive officer's seat at GM, the automaker once again has big ambitions for OnStar. Akerson hopes to expand the communications service by both increasing the number of GM car owners who continue to subscribe after their six months of free service ends, and by selling the system to owners of rival auto brands. He named former Revol Wireless executive Linda Marshall in January to run the unit, which has set out to transform cars into 2-ton smartphones. GM will also rollout this year a separate in-car entertainment system called Chevrolet MyLink for its biggest brand. "What's happening is a crashing of technologies between consumer electronics and the automobile," says Micky Bly, GM's executive director of global electrical systems. "Our research says that infotainment is one of the top five reasons to buy a car."