As GM accelerates development of its fleet of self-driving vehicles, Barra is pushing hard against her company’s naysayers. She recently visited the sprawling plant that builds GM’s new electric Bolt to demonstrate her determination to make it work.
The woman who grew up admiring Pontiac Firebirds and other sporty cars is now the top executive at the biggest carmaker in the world.
How She Got There
After graduating from high school, Barra landed her first job at General Motors (GM) through a co-op program that allowed her to combine her college education with on-the-job training. Her first assignment was at a Pontiac metal-stamping plant, where huge industrial presses smashed flat steel into the rough shapes that would become car parts. As she invested herself in her new career, the GM leadership noticed and promoted her. She worked her way through the ranks, eventually becoming a manager at a Detroit assembly plant.
In 2008, she was tapped as a vice president of global manufacturing engineering for the GM brand. She deployed what I like to call “leadership jiu-jitsu” during her tumultuous tenure as the brand’s head, marshalling both people and resources and expertly avoiding any glass cliff that might have been on the horizon.
But when she was named CEO of GM, the automaker was in dire straits. It was reeling from a drop in U.S. market share to 17 percent — down from 28 percent two decades earlier — as well as a bruising congressional hearing over a defective ignition switch that shut off the engine when a car was in motion, killing 124 people.
Barra inherited the company’s worst crisis ever, but she quickly showed the world – and her naysayers in Congress – that she had what it takes to lead. She calmly but firmly stood her ground during a barrage of senatorial accusations and finger-pointing, refusing to admit any wrongdoing or cover up.
While Barra has been remaking GM from the top down, she’s also been focused on making sure that every decision is driven by what will benefit the most customers. This includes cutting the number of cars pushed into low-profit daily rental and fleet sales, and holding back on profit-gobbling incentives.
This customer-centric approach has helped GM improve its quality ratings, which is why Barra is focusing on the development of an all-electric vehicle fleet and building ventilators for people with cystic fibrosis. But she isn’t resting on her laurels, as the industry and her shareholders will expect to see results over the next few years.
The Ignition Switch Crisis
One of the first major tests of Mary Barra’s leadership came shortly after her appointment in January — when she found herself at the center of the most significant car safety crisis the company had ever faced. GM’s ignition switch, linked to 13 deaths and more than 2.6 million recalls, could cut off the engine and disable power steering and air bags while driving, making it hard to control the car.
The issue was raised in a February 2013 letter sent to GM by the National Highway Traffic Safety Administration and never followed up until October 2014, when a faulty switch was discovered during a quality review. Despite being made aware of the problem, a series of misjudgments led to a delay in recalling affected vehicles, and questions emerged over who knew what and when.
A report commissioned by the company concluded that the 10-year delay in issuing a recall resulted from “a pattern of incompetence and neglect,” and in June, Barra announced that 15 employees had been fired and disciplined for their handling of the scandal. She has also pledged that a new culture will be created, one in which employees feel safe sharing concerns about their work without fear of retaliation.
For now, though, GM has been able to overcome the damage caused by the ignition switch scandal, and Barra’s promise of transparency appears to have reaped some benefits: Last month, the company’s profits were up more than expected, and sales are on track for their best year since 2008, according to Morningstar Auto Analyst David Whiston.
Even in the midst of this crisis, Barra’s easygoing demeanor has endeared her to a lot of people. She strolls into the battery cell laboratory on that May day and greets technicians with a smile, as she checks in on their progress. Several look up from their work a bit awestruck, but she quickly disarms them with light conversation. She wears a pink jacket over a gray suit, and her cellphone sits in a bright cherry-red case, not the more conservative brown or black that many other executives might choose.
The Self-Driving Car
Despite the headlines about Silicon Valley’s wildly successful and ill-fated tech companies, 112-year-old General Motors remains at the center of America’s economic story. That’s because it’s the company poised to lead America into the future of electric vehicles.
Barra knows that to win the auto industry’s biggest prize, GM will need to transform itself beyond its traditional manufacturing and product focus. To do that, it will need to become more of a tech innovator and incubator. That’s why she has worked to shift the company’s culture and brought in more technology talent, including by purchasing Cruise Automation, a self-driving car startup, last spring.
In the years since the ignition switch crisis, Barra has pushed for a more open culture and has focused on improving safety and transparency. She’s also credited with changing the way GM handles crises, creating a system that ensures top executives receive notice of problems sooner rather than later. In her view, that helped prevent the company from hiding a problem that could have cost it millions of dollars in fines and settlements.
She’s also focusing on making GM a more global business, which will help it compete with EV startups and make it easier to roll out products that work in different markets around the world. The more GM can use common platforms across regions, the better it will be able to cut costs.
Another major challenge for GM is catering to the new generation of consumers. Millennials have grown up without having to sacrifice performance for fuel efficiency and they expect their cars to be equipped with all the latest gadgets. If the company can’t deliver that, someone else will.
Regardless of the challenges, Barra is determined to make GM a global leader in automotive and mobility technologies. She has said that GM will need to have at least 50 percent of its sales from electric vehicles by 2040. Some observers believe personal vehicle ownership will eventually die out as cities and ride-sharing services expand. But, Barra believes that most consumers will keep buying vehicles for the convenience and utility they provide.
The Future of Work
When Ray Makela started his career at GM in 1980 as a co-op student, it’s safe to say that he didn’t foresee the day his daughter would lead America’s most valuable automaker. He may have envisioned his daughter moving up the corporate ladder, but it isn’t exactly clear how he could have predicted that she would become the first woman CEO of the company that employs more than 155,000 people and whose cars are sold in nearly 200 countries around the world.
Barra, 68, has been CEO since January 2014. She came into the position during a tumultuous time. The company was reeling from the ignition switch crisis, which resulted in 124 deaths and millions of vehicles being recalled. The scandal tarnished the brand, several high-ranking employees were fired and Barra was called to testify before Congress.
In her own words, the crisis “blindsided” her. Nevertheless, she has kept a steady hand on the wheel, guiding the 108-year-old, $152-billion company through a period of survival and rejuvenation, with a focus on customer safety, record profits and new ventures such as ride sharing. Her performance earned her a spot on Fortune’s list of the World’s Most Powerful Women in Business for the second year in a row and a place among Time magazine’s 100 Most Influential People.
Whether it was facing the glare of the congressional hearings or navigating the global shortage of semiconductor chips that has thrown production into a tailspin, she has maintained confidence and sangfroid. The daughter of a blue-collar GM worker, she has proven to be the fierce leader necessary to bring a once-mighty giant back from the brink.
But she won’t rest on her laurels. She has already made significant changes, including slashing the number of vehicles traditionally diverted to low-profit daily rental and other fleet sales and holding back on profit-gobbling incentives. Her no-nonsense management philosophy is rooted in excellence, accountability and the drive for continued efficiencies, which has helped GM to regain its footing. It remains to be seen how far the company can go under her watch.
