GM's new CEO Mary Barra celebrates while watching GM sweep the 2014 North American Car and Truck of the Year awards.
General Motors moved into a new era this week as its first woman chief executive took over the reins from Dan Akerson, the gruff graduate of the U.S. Naval Academy at Annapolis, who guided GM out from under government control.
GM veteran Mary Barra will likely face a level of unprecedented scrutiny, said her mentor and predecessor, as she assumes a control of a global company with both newfound momentum and an assortment of serious challenges – among the need to continue regaining share in its home market, a European subsidiary that has been operating deep in the red for 14 years, and increasing competition in the critical Chinese market.
However, the 51-year-old Barra is no stranger to hard work. When she joined GM as an 18-year-old co-op student at GM’s new-abandoned Pontiac Motor Division, she followed her father, a die-maker and member the United Auto Workers Union, into the factories in Pontiac, Michigan.
In those days, the Pontiac Motor division employed roughly 20,000 at the sprawling manufacturing center, making not only Pontiacs but also the parts for engines needed to power them. The blocks and cylinder heads used in the motors were cast on site at a foundry that lit the night sky. And the boundaries between blue-collar workers and white-collar employees were strictly enforced by union contract and shop-floor traditions.
(GM forecasts earnings to rise in 2014 on wave of new products. Click Here for the story.)
Barra proved her mettle as global product development chief, an operation in "chaos" at the time she took over, recalled former CEO Dan Akerson.
Many of the traditional boundaries have faded in recent years as union and management struggled to turn GM around from its devastating 2009 bankruptcy. UAW President Bob King, who served on the supervisory board of GM’s German subsidiary Adam Opel AG alongside Barra over the past couple of years, thinks Barra’s blue-collar roots will serve her well in her new role as GM’s CEO. “I think she was an excellent choice,” said King.
He’s not alone.
“If Golda Meir can be the prime minister of Israel and Margaret Thatcher can arguably be England’s greatest prime minster and Angela Merkel can run Germany, why can’t a woman run a car company,” said former GM vice chairman Bob Lutz.
Moreover, Barra understands perfectly the need for GM to build great cars and trucks, asserts Lutz, who has cast accountants as the villains in his most recent book about his days in U.S. auto industry.
“She’s not a bean counter,” said Lutz, others agreeing Barra more aptly fits into the more revered caste of “car guy.”
From her very first day at GM in 1980, Barra was steeped in GM’s engineering culture, attending General Motors Institute in Flint. At the time, the auto industry had just begun to hire women for a variety of jobs, but areas such as manufacturing and engineering were overwhelmingly male dominated.
New GM CEO Mary Barra helps to introduce the GMC Canyon midsize pickup during a preview of the 2014 Detroit Auto Show.
“You had to be tough,” noted Amy Bromsen, a retired Chrysler employee now pursuing a doctorate in labor studies at Wayne State University. Bromsen began an apprenticeship as an electrician in a GM plant more than two decades ago.
“It was very macho,” said a former GM employee whose job in communications regularly took her into GM plants in Flint during the 1980s. “I can remember people hooting as I walked down the line because I was young and female. I don’t think it was any different in Pontiac.”
(GM restores dividend for first time since 2008, names new CFO. Click Here for details.)
But General Motors –like the auto industry in general — was on the cusp of a major change. By 1981, GM, then the industry’s undisputed leader, reported its first financial loss in six decades and, as the company’s management scrambled to stem the red ink, the notion of closing GMI was openly discussed. The school survived but evolved into Kettering University, which now educates co-op students from dozens of different companies, not just GM.
Julie Hamp, vice president of communication for Toyota Motors North America Inc., who spent 25 years with GM before being recruited to fill an executive post at Pepsi Co. in 2007, and who now is U.S. PR chief at Toyota, said Barra has always had a reputation inside GM as being fair minded and a good listener.
“She has great people skills,” said Hamp, who attended an executive education course at Harvard with Barra during the 1990s. At the same time, “she isn’t one for small talk,” Hamp noted, while adding Barra will ask for and listen to every opinion in the room.
That said, Barra is decisive and unafraid to act, said now-retired GM CEO Akerson, even if it means a difficult challenge like trimming 100 jobs in senior product development management. “She’s confident and decisive,” stressed the now-retired Akerson, during a discussion on the evening after handing Barra the reins.
Ron Harbour, of Oscar Wyman Consulting in Southfield, a respected and knowledgeable analyst and consultant, said the 52-year-old Barra’s diverse experience, which included stints in manufacturing, engineering, public relations, human resources and product development, provide her with an impressive background.
“Nobody gave her the job. She earned it,” said Harbour, who described Barra as “a quiet revolutionary” who knew GM inside and out and also knew the company had to change in order to survive.
GM’s management recognized Barra’s potential for promotion early on in her career. She was sent to Stanford’s prestigious MBA program at company expense not long after graduating from GMI with a degree in electrical engineering. After graduating from Stanford, she returned to Detroit, and moved to a series of jobs in engineering and manufacturing.
(New Corvette Z06 just one of many new muscle cars debuting at 2014 North American International Auto Show. Click Herefor a closer look.)
A key mentor along the way was Donald Hackworth, the blunt, tough-talking head of GM’s North American Car Group before he retired in 2001. Hackworth believed in giving women a chance and promoted several, among them Barra to key positions, noted Hamp, who served as his chief of staff.
By the middle of the last decade, change was rapidly overtaking GM, which had seen its once dominant market share shrink year by year. By then, the Pontiac Motor manufacturing complex in Pontiac was being demolished, building by building, and the division’s engineering group had been reorganized out of existence.
As GM slid towards bankruptcy in 2007, Barra, who had already been a plant manager, was promoted to vice president of manufacturing engineering, which put her in charge of finding ways to improve and streamline GM’s manufacturing operations. With the company in turmoil after GM emerged from bankruptcy in the summer of 2009, Barra was put in charge of GM’s human resources department, a tough assignment at a time when plants were closing and thousands of employees had been dismissed as the company tried to restructure.
It wasn’t the best use of her talent, Akerson quickly recognized, so a clearly impressed board of directors approved an even tougher assignment in 2011, putting Barra in charge of GM’s critical global product development, which had stalled by the bankruptcy. Again Barra was credited with using her management skills to streamline a sprawling, unwieldy organization and give it a sharper focus, observers said.
Dave Cole, president emeritus of the Center for Automotive Research in Ann Arbor, said that until recently it was widely assumed GM’s next CEO would be another outsider like Ackerson because of the distrust of the automaker’s management culture both in Washington and on Wall Street.
“Two years ago I would have said it would be another outsider,” Cole recalled. “She is a GM lifer and I think that’s good,” said another retired GM public relations executive, who like other GM retirees was stung by the company’s bankruptcy.”
To retired Vice Chairman Lutz, Barra’s appointment shows that GM’s own culture is richer and more diverse that outsiders believed. “I know a lot of people thought the place should the keelhauled,” Lutz said. “But GM has a lot very talented people.”
As GM’s turnaround began to take hold under Akerson, GM’s board of directors began to look for CEO candidates inside the company and they were impressed with Barra’s performance, elevating her to executive vice president and raising her compensation to $4.85 million in 2012. Finally Akerson and the board selected her to serve as GM next CEO. “It’s a historic appointment,” noted Hamp, who said it gives GM an entirely new face.
Barra, who now lives in Northville with her two children and husband of 27 years, gives away little in interviews with the press. One thing that does come through is her practical streak. After taking over as head of product development, she told reporters she drove a Cadillac Escalade because she used it to carry her son’s hockey gear. As a student at GMI in a culture where students often indulged in the fastest and most exotic cars built by GM, she drove a modest Chevette between GMI’s Flint campus and her post in Pontiac, she noted during an interview with the Stanford Alumni magazine.
Her appointment last month generated a wave of unprecedented media coverage and social media activity – even performer Bette Midler tweeting about the news. And she’s likely to remain under the microscope, said Akerson. “If I made the same mistakes she might make, I don’t think I’d get the same attention,” he told reporters in Detroit.
But Barra doesn’t like making a fuss over her gender.
An article posted on the web site of Inforum, the women’s economic club for Southeast Michigan, stated, “When you approach a new business, assignment or activity, trust that gender has nothing to do with it. We all come to the table, we all work hard and we all bring our skills. Mary has never thought, ‘Well, that happened to me because I’m a woman.’ Don’t go there!
“You have unique talents and you bring them to the table just like everyone does.”