September 9, 2009 by admin

OnStar Execs Chat about the Business

I’d like to thank all of you who were able to join Chet and I for our live chat on Tuesday morning. I realize that the morning after a long holiday weekend can be a tough time to participate in something like this, but I was impressed by the number of participants and the number of thoughtful questions that were submitted.

Because we only had an hour to chat, we weren’t able to give as much information as we would have liked. So I’d like to take a quick moment to expand on some of the points we mentioned in the chat.

Many questions revolved around how OnStar is positioning itself for the future and how we plan to address an evolving market. As Chet and I emphasized during the chat, we’re constantly developing new technologies and evaluating our current services to make sure that we’re doing everything we can to remain competitive. We recognize the automotive telematics industry is growing and changing. The needs and desires of our customers are changing. And we know if we are to remain the leader in this industry, we are going to have to grow and change with it.

For us, one key to staying ahead of the curve is fostering a close relationship with our subscribers and taking their feedback seriously. Before launching any new services or making changes to any of our existing services, we turn to our dedicated research team to help us reach out to our subscribers for their input to make sure we’re on the right track. We also lean heavily on our partners in the first responder, medical and law enforcement communities to help us develop and improve our services, making sure we’re doing everything we can to improve the driving experience for our subscribers.

While the core of our business has always been safety and security, we of course pay close attention to everything that’s new and hot in the tech world as well as keep a close eye on what our competitors are up to. While unfortunately I can’t share any specific details about all of the exciting things we’re working on, I can say that you should stay tuned for some interesting announcements from us in the not so distant future.

Check back to onstarconnections.com in the days and weeks ahead; we’ll be posting some of the questions we weren’t able to get to during the chat, along with our answers. I look forward to your feedback and to scheduling another chat with you again soon.

- Walt

Read on for the chat transcript and to learn how Walt Dorfstatter, OnStar’s newly appointed general manager, and Chet Huber, who has led the company since 1995, answered questions from subscribers, news reporters, OnStar employees and a police lieutenant.

9:56 
Jocelyn Allen: Welcome. Chet and Walt will be here in a few minutes. Start sending your questions.

10:00
 Chet Huber: Hello. This is Chet and I look foward to your questions.
10:00
Walt Dorfstatter: Hi, this is Walt. Looking forward to taking OnStar to the next level. Really interested in hearing your questions.

10:01
[Comment From Manny Lopez, Detroit News ] How is OnStar going to remain price competitive in regard to its directions and connections package especially since GPS devices are cheaper and you can download a turn-by-turn voice activated system to your iPhone for $100 or less?
10:04
Walt Dorfstatter: There are plenty of ways to get directions out there. We believe we have a responsible way to deliver directions to our customers that is completely integrated into the vehicle environment. With our system there is no underlying data plan needed. We also have the backup of a live advisor to help you find the correct destination.

10:04
[Comment From Guest ] Can Onstar listen in on your conversations if wanted?
10:06 
Chet Huber: No. We don’t listen in on calls. And are only on the line if you request a service like Turn-by-Turn Navigation in the case of a crash. We take subscriber privacy seriously.

10:06
[Comment From Ed Vossen ] Noticed that Saturn is decontenting and removing OnStar from vehicles for 2010. It is now an option. Is this a sign of what coming elsewhere?
10:07
Walt Dorfstatter: Any decisions about the content on Saturn vehicles will be made by the new owners. Their decision has no reflection on GM’s committment to OnStar.

10:08
[Comment From Niall ] When is Sync going to be available on OnStar?
10:09
Chet Huber: sync is sync, and OnStar is OnStar. GM does have an integrated Bluetooth capabiliity on some vehicles, and MP3 player connections on many vehicles, but Sync is fundamentally not the same in terms of providing OnStar’s industry leading peace of mind services like crash response, diagnostics, stolen vehicle recovery and slowdown, etc….

10:10
[Comment From phonebook ] for onstar/bluetooth handsfree calls, you can store a number using a voicetag. can you change the software so it lets you store a text-based nametag that will display in the dash, so you can scroll through a list of names instead of having to say the name you want to call?
10:13
Walt Dorfstatter: We’ve designed our Bluetooth interface to be a responsible use for the technology in vehicles. We will continue to look at alternatives including text based storage with appropriate in-vehicle use.

10:13
[Comment From Tom ] Has OnStar given any additional thought to pay-per-use for door unlocks or directions and making emergency only service cheaper?
10:13
Chet Huber: we actually already have pay per use type service in the form of OnStar hands free calling. We continue to test different service package configurations, including pay per use routes, and will likely offer additional ala carte type services in the future. stay tuned.

10:13
[Comment From Julie ] There are ‘rumors’ of OnStar being sold or for sale. To me, this seems one of GM’s core competencies. Any insight on this?
10:16
Chet Huber: Over the course of the last year, GM looked across all of its assets and tried to determine the external value of many of them, including OnStar. At this point, OnStar is firmly a part of the new GM and is an integral part of GM’s future strategy

10:16
[Comment From John Jefferson ] Is there any discount dor bundling services such as Turn by Turn, Phone minutes, Traffic, and emergency services? What is the maximum charge for complete services?
10:20
Walt Dorfstatter: We do have a annual payment discount and have bundled the services in simple to understand packages which match broad interest segments, Safe and Sound and Directions and Connections. Since phone minutes are charged on a by-use basis, the price for purchase depends on the user. D&C includes all services, unlimited use of Turn-byTurn for $299. We are evaluating alternatives in pricing and packaging.

10:20
[Comment From non subscribers ] is ti possible for onstar to help non subscribing customers by sending a GPS location to the 911 emergency network in case of a crash?
10:20
Chet Huber: No. an inactive OnStar system is not capable of operating on the network or delivering any service.

10:21
[Comment From Brian Drury ] What is OnStar?
10:23
Walt Dorfstatter: OnStar is a comprehensive saftey, security and communications service that currently serves 5.5 million subscribers. We offer services including Automatic Crash Response, Door Unlocks, Hands-Free Calling, Stolen Vehicle Assistance, Navigation and OnStar Vehicle Diagnostics. Learn more at www.onstar.com.

10:23
[Comment From Larry Greenfield ] TomTom has gone with an iPhone app, breaking out of it’s device-based mold. What options is OnStar considering for moving beyond the GM silo to provide services to vehicle owners on a broader scale?
10:26
Chet Huber: OnStar has had relationships with other car manufacturers in the past, and are open to future connections to their vehicles and customers, but that’s their decision to make. In addition, OnStar is now available on a number of used GM vehicles,and we’re looking at other options for other vehicle types but we have nothing to announce at this point. Since our experience and capabilities are mainly in the area of services for driveres, we really don’t see an opportunity to be really helpful in purely portable devices.

10:26
[Comment From Guest ] What would you say the number one reason why people buy your services?
10:27
Walt Dorfstatter: Peace of mind with our anchor service of Automatic Crash Response. Knowing when you are in a crash that our trained advisors are there to help. Our embedded GPS can help guide responders to you. On most vehicles today we have the angle and force of the incident and are working with the response community to ensure the most appropriate response.

10:27
[Comment From Kevin (Florida) ] I use my on star phone all the time in the car, but people on the other end of the conversation say the reception is terrible. It has been in my last 3 Corvettes.You should be able to roll over your minutes from year to year, they are EXPENSIVE, consider a contract with Sprint, dump current provider?
10:31
Walt Dorfstatter: The vehicle is a difficult accoustic enviroment for hands-free performance. We work closely with GM engineers to get optimal performance. Not sure wether or not you have a convertible but those can be particularly challenging. You can roll over your minutes with the purchase of a new bundle.

10:31
[Comment From Shiva ] Can we expect OnStar servcies on non-GM vehicles
10:31
Chet Huber: we already are delivering services on non-GM vehicles, and in all liklihood we will be bringing OnStar to other vehicles in the future, but not for the next couple of years at the earliest due to their engineering validation timing.

10:32
[Comment From Guest ] I just wanted to say good morning to Mr. Huber. I work for Onstar and think it’s great.
10:33
Chet Huber: Good morning to you, too! I’m very glad you feel good about working at OnStar, I certainly have for the 14 years that I’ve been here.

10:33
[Comment From John Jefferson ] What level of service is necessary to be able to download MapQuest directions to the hard drive of a CTS?
10:34
Walt Dorfstatter: I think what you are asking about is a service we call OnStar Destination Download. Unlimited use, both advisor based or through MapQuest (we call it eNav), is available with the Directions and Connections package.

10:34
[Comment From Tom ] What do you think of products like GuidePoint connect that claim they are the ‘OnStar for everyone else’? Do you see them as a threat?
10:37
Chet Huber: Guide-Pointe, and others like them, represent a reaction to the understandable desire for OnStar like services across all vehicles. This is a very difficult capability to develop and do well, especially the critical safety and security aspects of OnStar. We always expect there to be competitors, and know we have to work hard to maintain our leadership position in this market, and fully intend to do just that. I really hope that all of the competitors attracted to this market put the effort and rigor into doing it well, as peoples’ lives are at stake.

10:37
[Comment From William ] how about live traffic reports .. example . if you notice that there is a traffic jam, how about alerting on star customers about the jam an an alternative route before they hit the jam?
10:39
Walt Dorfstatter: There is real-time traffic data that is availble and in use in GM vehicles with navigation systems and XM Real Time Traffic. All of these rely on the quality of traffic data which varies based on the metropolitan region. We continue to monitor traffic as an addition to current OnStar services.

10:39
[Comment From Capri_boy ] will Onstar be available in Europe now that Opel will be sold?
10:41
Chet Huber: OnStar will be available in China in December, and we continue to study other parts of the world, like Europe, for future service launches. Whatever the outcome of the vehicle situation in Europe we would still see our capabilities and technology as potentially useful to customers and other automotive manufacturers.

10:41
[Comment From Bill ] Would you ever consider providing an OnStar branded nav screen for people who upgrade to Turn-by-Turn navigation, similar to a portable GPS? Some people prefer to glance at a screen and hear the voice-guided prompts, rather than just to the voice alone.
10:43
Walt Dorfstatter: We have a service called OnStar Destination Download which allows D&C subscribers to call an advisor for a destination, and have it sent to their vehicle’s navigation screen. OnStar Turn-by-Turn, in many instances, has visual icons on the driver information center or radio.

10:43
[Comment From Guest ] OnStar appears to have stood still while other companies are branching out to offer more services or integrating with other devices (some already mentioned in this chat). What plans does OnStar have to continue innovating with their services in this space?
10:46
Chet Huber: If standing still feels like this, I’d hate to be on a roller-coaster. Over the past two years alone, we have further enhanced our leading capabilities in crash response with the funding and participation in the CDC’s advanced crash response study – which we pioneered. We scaled our Turn by Turn platform to include an internet connectivity with Mapquest, invented off-board telemetry connections into screen based systems, inveneted stolen vehicle slowdown and remote ignition block, added emissions and stability contol to our vehicle diagnostics capability, and announced the filing of our 500th patent, still filing at the rate of once every 6 days. And by the way, we’ll be launching in China in less than 90 days. Innovation is at the core of OnStar, just not the dancing hologram type of innovation that some companies try to use as eye candy instead of substance.

10:46
[Comment From Shiva ] Is OnStar profitability contingent on offering services to non-GM vehicles
10:47
Walt Dorfstatter: OnStar is currently profitable and has been for some time.

10:48
[Comment From Doug ] BTW – I should say that I like having Onstar in my vehicle. I have used it twice to report accidents that I had seen happen in front of me, and once when I was involved in an accident. The advisors were very thorough and responsive.
10:49
Walt Dorfstatter: Great to hear and thank you for being a Good Samaritan. We get 7,000 calls on behalf of others from our subscribers each month.

10:49
[Comment From Rachel ] I’m a team leader of Shanghai OnStar Call Center. It is the very first time OnStar Service to be launched outside the United States and Canada in this year. And some one in our advisor team is suppose to be answering the first subscriber’s call in China. The inaugural advisor team is currently being trained to handle subscribers’ emergency situations as well as day-to-day requests for directions and vehicle diagnostic checks. So we’d like to listen to your advice to our first class advisor, like the most important personality for a good advisor and greatest difference for OnStar Advisor Service compared to other customer service.
10:51
Chet Huber: Rachel,
thanks for your note, and for being part of the exciting launch of service in China. By now you already know that your work will be very special, as you represent the guardian angel for our subscribers, helping them when they’re lost, or when they’ve been in a life threatening crash. I know you’ll be compassionate, helpful, sincere and very calm and professional as you deal with our new subscribers. I wish you all the best as the service launches, and hope you will come to be as proud of being a part of OnStar as I have been over the last 14 years.

10:51
[Comment From William ] I am a police lieutenant, I want you to know that our department has responded to many onstar airbag deployment calls, several of which onstar was either the only call or the first to call. Congratulations. I can’t wait until we get our first stolen vehicle slowdown, unfortunately no one steals onstar vehicles. Congratulations Onstar for the good work you do!
10:51
Walt Dorfstatter: Thanks William. We really appreciate our partnership with Law Enforcement and the entire response community. We couldn’t do our job without you.

10:52
[Comment From Sheila ] Hi – I have heard wonderful things about OnStar from my friend. Her only complaint is that when she runs out of minutes, the system ends the call. Will this change in the future – like charge as you go rather than just disconnect?
10:54
Walt Dorfstatter: Please thank your friend for the nice things she has to say about our service. The OnStar system does gives warnings when there are 10 minutes or less left in the vehicle. Also, some vehicles give a countdown of how many minutes are left.

10:54
[Comment From Doug ] Why are the phone minutes so expensive? It works out to about $.35/minute. Is there a plan to have a monthly / yearly number of minutes that could drive the per minute cost down?
10:56
Chet Huber: with so many people having their own portable phones, we have learned that we can be the most useful to our subscribers by positioning OnStar hands free calling as a “just in case” capability for them in the vehicle. As such, our typical subscriber buys 100 minutes, good for a year, and essentially has back-up dial tone connection to their vehicle for about $3.00 per month. Since we buy our minutes from the cellular industry, we can’t compete directly on price per minute, so we think our value really plays out the best as back up connectivity. Right now, GM is building a larger percentage of vehicles with the best Bluetooth capability in the industry, which allows for an in vehicle experience much like OnStar’s while using your existing large minute plan.

10:56
[Comment From Srini Rajagopalan ] How is OnStar going to be integrated with the evolving Infotainment system available in a GM vehicle – especially the new Cadillacs. It seems to be a strategy of going with two different hardware systems instead of one integrated system.
10:58
Walt Dorfstatter: In the future you will see better and better integration between OnStar and the infotainment systems. One recent example is OnStar Destination Download which allows an OnStar advisor to send a destination directly to the screen-based navigation system.

10:58
[Comment From Guest] Can you provide any insight on features or applications that OnStar plans to introduce during the next two years? Will SMS messaging from a cellphone to control certain aspects of a car ever be realized, i.e. door unlocks?
10:58
Chet Huber: on the SMS front, yes stay tuned. Same thing for the new services, there will be more (like last month’s announced remote ignition block), but stay tuned.

10:59
Chet Huber: thanks for your interest in OnStar and for your time with us today.

10:59
Walt Dorfstatter: This has been a wonderful experience. We appreciate everyone’s time and interest in OnStar. Stay tuned for more exciting news from us!

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