General Motors is insulated from the auto industry’s traditional cyclical volatility, its chief financial officer told investors Wednesday — and that includes changes that could come from the Trump administration.

Chief Financial Officer Paul Jacobson said the automaker has learned to stop reacting knee-jerk to market changes and instead take a conservative, consistent approach to ups and downs. This means sticking to a long-term strategy, regardless of any short-term challenges that might arise.

Jacobson, speaking Wednesday at the Barclays Global Automotive and Mobility Tech Conference in New York, said he was often frustrated to hear the word “standardization” joked about when discussing how to run GM’s operations .

“We banned the word ‘normalization’ within the company because what is normal? Isn’t it possible that we have established a new normal?” asked Jacobson. “We learned a lot about the value of our products to consumers: how to price them, how to not react knee-jerk to what’s happening around us, and how to focus on our inventory, demand, and execution. “

A guarantee of “performing better in times of recession”

GM had a history of overproducing vehicles during good times, he said, only to have to scale back and drastically reduce them during bad times, creating wild swings in the company’s books. Today, it has “reset” its new normal behavior of exercising restraint in production and controlling incentives to maintain strong prices and consistent production volumes.

“It doesn’t make us immune to an economic downturn, but I guarantee you that with this level of consistency and these fundamentals, we will perform better in an economic downturn than ever before,” Jacobson said.

That can mean leaving “money on the table in good times,” he acknowledged.

“Could we make more money by producing more and generating more volume at lower prices? Yes, with the margin, maybe we could do that,” Jacobson said. “It’s not going to be worth the capital, the fixed costs, et cetera, to increase that and then have to destroy it if the market goes back down.”

This strategy is critical when it comes to GM’s goal of moving to all electric vehicles by 2035. The big problem is that the new Trump administration could derail that goal. Many experts predict that President-elect Donald Trump will repeal the $7,500 federal consumer tax credit, which would slow the adoption of electric vehicles.

Trump also pledged to increase tariffs – taxes imposed on goods as they cross borders – on vehicles made in Mexico and sold in the United States. The Detroit Three all build vehicles in Mexico for sale in the United States.

More: Trump’s economic agenda includes tariffs, tax cuts and more

Jacobson said GM would not change its business strategy, emphasizing that whatever Trump decides remains speculation.

“We’ve been pretty consistent in saying we’re not looking to next quarter, next year, etc. We’re thinking about this on a much longer horizon,” Jacobson said. “I think many of the things we do today will continue regardless of regulatory developments.”

Where GM’s goals and Trump’s goals match

GM will continue to emphasize cost reductions, he said. He did not say where the company would find savings. Last week, the Free Press reported that GM cut 1,000 jobs worldwide, mostly salaried but some hourly, as part of the “normal course of business” to gain operational efficiencies. GM will stop using its Yuma Desert Proving Ground for hot-weather vehicle testing. Additionally, GM is permanently closing its durability, corrosion and disassembly departments at its Milford proving grounds. In August, GM eliminated nearly 1,500 of its software division on a global scale.

GM will continue to prioritize its software development and expand its electric vehicle lineup on its Ultium propulsion system to meet demand because, Jacobson said, “we believe electric vehicle penetration is a long-term goal.” term “.

As for higher tariffs on vehicles that GM builds in Mexico, such as the Chevrolet Blazer and Blazer EV and the Equinox and Equinox EV, to name a few, Jacobson defends GM’s manufacturing portfolio, pointing to a strong presence in the United States.

“We are the largest battery cell producer in the United States with our partner LG (Energy Solution),” Jacobson said. “We could have opted for cheaper alternatives and purchased imported technology, but we didn’t.”

GM and LG jointly run Ultium Cells LLC, which has factories in Ohio and Tennessee that produce battery cells for GM’s electric vehicles. Ultium Cells will soon begin operating its new facility in Lansing and its website said it will employ 1,700 people there by the end of next year.

Jacobson said GM is willing to work with the Trump administration.

“I think our goal is very consistent with the administration’s goal in terms of American jobs and what that could mean,” Jacobson said. “We have to have the balance and the flexibility to be competitive, because we are competitive in a global environment. But when you look at our track record, you look at the offshoring of our supply base, it’s in the spirit of that what we are trying to do and what the country wants us to do.

Contact Jamie L. LaReau: [email protected]. Follow her on Twitter @jlareauan. Learn more about General engines and sign up for our automotive newsletter. Become a subscriber.

This article was originally published on Detroit Free Press: Paul Jacobson, GM CFO: “standardization” is prohibited at the automaker