Following on from his excellent – and ongoing – series The Great Motor Men, AROnline Contributor Martyn Kelham continues on his tour of the great motoring women.
Here, in the third part, he catches up with the CEO of General Motors, Mary Barra.
Turn the clock back to 15 January 2014 and Mary had landed her ‘dream job’! Some of us have been fortunate enough to experience that feeling, but we wouldn’t want her second week in the office!
As the new Chief Executive Officer of General Motors (GM), she knew there would be product recalls – but this was the ‘mother’ of them all. Initially, just 7000 Chevrolet Cobalts were involved but this totalled up to 2.4 million and lead GM to scrutinise its recall policy – eventually recalling 13.6 million vehicles for everything from a faulty tail lamp to a potential seat belt malfunction.
The first Cobalt recall was just two weeks into her new role. Later, she had to sit silently listening to the parents of ten kids – telling her what it was like to lose a loved one. Accidents included a GM Cobalt hitting a tree and the air bag not deploying – right up to two deaths in one car that crashed into a ditch. The story was like something from a movie, but this was real life – and death. In addition to the airbag failure, all keys were in the ‘accessory’ position and all the drivers were young – and had lost control.
Up before congress
A few months later, on 1 April 2014, Mary had to appear in front of a Congressional Sub-Committee looking at why GM had waited so long to recall the Cobalts. Much as Mary sympathised and had real empathy for these parents, her job was to get GM out of the mire and consign years of poor quality and mismanagement – including a $50 billion taxpayer funded bankruptcy – to the annals of history.
A little like a Prime Minister coming to office shortly before a worldwide pandemic occurs, Mary had been hit with the worst nightmare for a CEO of a major manufacturing company. The question at such times is – can that person cope? Just as important, can that individual influence the organisation to such an extent that the future is better than the past. Immediate company history proved that five predecessors had apparently failed to make their mark sufficiently to stay in post for very long.
Mary wisely surrounded herself with the best and most respected help she could get. Jeff Boyer was named Vice-President of Global Vehicle Safety, Anton Valukas was asked to lead an internal investigation and Kenneth Feinberg was appointed to handle compensation claims, having previously been involved with the victims of 9/11 and Hurricane Katrina. Not many CEOs are in post for such a short time and then have to agree to the company paying a record $35 million fine.
A stellar rise to the top
But how did this one time student at the General Motors Institute (Kettering University) in 1980, get to the highest position possible in a global company? Graduating with a Bachelor of Science degree in electrical engineering in 1985, Mary gained a Master of Business Administration from the Stanford Graduate School of Business in 1990.
In her time with GM she has held numerous positions including Plant Manager – Detroit Hamtramck Assembly (2003-2004), Executive Director – Vehicle Manufacturing Engineering (2004 t0 2008), Vice-President Global Manufacturing Engineering (2008 to 2009), Vice-President Global Human Resources (2009 to 2011), Senior Vice-President – Global Product Development (2011-2013) and Executive Vice-President – Global Product Development (2011-2014. Mary was elected to the Board of Directors in 2016 and has been CEO since January 2014. To hold this illustrious position for more than seven years is notable in a world of ever changing roles and constant jockeying for position.
The current focus is to have zero crashes, zero emissions and zero congestion. Critics, of course, counter with arguments that this is not only impossible but just ‘hype’ to please the politicians and the ‘greenies’ and get the American public to forget the past. Whichever it is, Mary and her team have little choice – they could hardly advocate accepting crashes, ignoring environmental concerns or continuing to produce oversized vehicles.
How to win the hearts of customers
The key to success has to be repeat business and Mary has focused on improving the customer experience and strengthening GM’s core vehicle and services business. The future may be electric and her team are working hard on personal mobility through advanced technologies: connectivity, electrification and autonomous driving.
Interestingly, Barra finds time to serve on the Board of Directors of the Walt Disney Company, the Duke University Board of Trustees and the Detroit Economic Club as well as being the Chair and founding member of GM’s Inclusion Advisory Board.
Other roles include being a member of The Business Council and a Board Member of the Business Roundtable. She also serves on a Special Board Committee on Racial Equality and Justice. As with so many big companies, the word ‘culture’ is overworked but all important. In 2014, Mary’s leadership had to change the established culture of GM – or she would have been merely a sailor on a sinking ship.
The biggest change? The company was now saying, ‘if we make a mistake, let’s say we made a mistake and move on.’ That ‘culture change’ ran up and down the company corridors and out on to the shop floor. Suppliers were amazed and enthusiastic for the ‘new order.’ One commentator at the time said that, ‘in the old GM, I don’t think we would have ever done that.’
All the qualities of success
So Mary is the archetypal ‘started at the ground floor and worked up’ CEO. As a student she worked at the noisy Press Shop within Pontiac. This was not a regular environment for a young lady in those days. Following graduation in the mid 80’s she landed a full-time job at Pontiac as a quality inspector. Three years later, GM paid for Mary to study and get an MBA at Stanford. At this point Mary married Tony, who also worked for GM. Those who knew her in the early days are quick to point to her strengths. She is a mix of cool, analytical Engineer – but a warm quick witted personable individual.
In 1999, she was asked to look at improving communications with plant operatives at a turbulent time in industrial relations. However, rather than a ‘softening’ of memos, recipients got ‘real time’ information about how they needed to buckle down and get performing better – if the company was to survive. Rather than thinking this was just ‘hot air’ – the workforce believed and understood the message – and reciprocated with more overtime and a better attitude.
In her first substantial senior management position, she was expected to bring the ‘showcase’ GM Hamtramck factory into line. It had opened in 1985 to counter the Japanese invasion, but had somewhat shot GM in the foot – being technologically unreliable. The robots were revolting – and loved to misbehave. The result had been numerous reorganisations and stability was not an oft-used word.
Like many good managers new in post, Mary spent a lot of time watching, listening and absorbing just what was going on. In a very short time she knew most workers by name, but let’s not run away with the idea that everything was sweetness and light. There were fights – but accounts from those who worked with her are quick to point out that differences were settled (mostly) amicably. A little later, D-ham (Detroit Hamtramck factory) won a JD Power quality award. Mary’s influence was demonstrable.
Interestingly, D-ham made Cadillacs, Buicks and Pontiacs, but not Cobalts – the car that would give Mary such a rough ride a decade later.
New processes, new issues
Mary was promoted to Executive Director – Vehicle Manufacturing Engineering. In this role she developed factory processes but, unbeknown to her, a time bomb was ticking away – in the form of the ignition switch on the Cobalt. Despite concerns raised in the ‘inner circle’ no action was taken. In 2005, Product Engineers twice considered possible fixes to the switch. Instead, a Service Bulletin was issued requesting that dealers tell dissatisfied customers who complained about unexpected shutoffs, to remove heavy items from their key chains! A year later, without changing the part number or acknowledging the upgrade, the switch was re-designed. This action was likely the reason for the problem never being the subject of a recall.
Mary was heavily criticised at a congressional hearing for apparently not knowing about this upgrade. Senator Barbara Boxer noted that: ‘Something is very strange that such a top employee would know nothing of this.’ Mary’s defence was that, with more than 320,000 employees and over 30,000 people in Product Development, GM was a mammoth organisation – and communications were not always at their best. Also, no CEO can know every detail of every component – and teams of managers and technicians are paid to sort out things at this level. Sergio Marchionne, CEO of GM rival Fiat Chrysler, heartily agreed with this view.
Thanks to the Global Financial Crisis,2009 was a very difficult year and only President Obama’s actions to avoid closing GM’s doors for ever with the resultant huge fallout in terms of redundancies and down the line supplier heartaches saved the day. Two Washington-appointed men steered the company through bankruptcy. One of them, Henderson, made Barra Vice-President – Global Human Resources and she was able to put the round pegs into round holes successfully. In this role, she worked with Feinberg (the other Washington-appointed man) to get a pay structure that – amongst other things – would restrict the salaries of the top 25 executives.
A flexible approach
Mary had proved to be a very effective negotiator and this was a tough call, but she was complimented for her flexible approach. While yet another CEO came and went, Barra’s predecessor Dan Akerson began to rebuild the business. He merged Product Development and Purchasing under her to streamline costs. He has been quoted as saying ‘she brought order to chaos.’ She cut a layer of management and gave Chief Engineers more responsibility.
When Akerson departed in 2013, he is recorded as saying, ‘The fact that Mary is a woman is great. But she earned this job on the merits of her performance and her potential.’ And so Mary became CEO of GM. However, some observers have suggested that Akerson threw Mary to the wolves knowing that the ignition recall was just about to kick off. He rebuffs such a suggestion and adds: ‘The moment she became aware of the problem, as I would expect, she confronted it. She didn’t know about it. I bet my life on it.’
In the five years following the GM bankruptcy, the company went a long way towards putting the ship upright and this gave Mary a firm footing to start a proper re-build. Performance and investment in the company both improved dramatically and Chevrolet sold more vehicles than ever before.
Mary had to set up a global team that would work with others around the world. As we all know, car manufacturers now share platforms, engines and numerous components on a scale unthought of in earlier decades.
Mary is still GM’s CEO. As many have experienced in life, it takes a crisis to shake things up and instigate the ‘new order’. In GM’s case the crisis was a disaster – particularly so for some individuals and their families. However, without some sort of a ‘shake-up’, GM would probably not be with us at all – and, at the helm, we have a very special high performer.