Mary Barra Appointment Puts Insider Back in GM CEO’s Seat

The naming of General Motors product-development chief Mary Barra to CEO-elect today crashes a glass ceiling in the automobile industry, but experts say the appointment also acknowledges the unique complexities of the business.

“It’s a terrific move,” says Dave Cole, former chairman of the Center for Automotive Research in Ann Arbor, MI, and a longtime industry analyst.

As historic as Barra becoming the first female CEO of an automaker might be, Cole says it also signals the GM board of directors and current Chairman and CEO Dan Akerson recognize the complicated nature of a global, highly competitive and strictly regulated business.

Akerson, as well as his predecessor Ed Whitacre, came to GM from the telecommunications industry. While both are widely credited with putting the automaker’s business back on track, neither brought automotive experience to the job.  

“The key thing is the board and the CEO recognizes it is a complex business and Mary Barra knows it from the inside out,” Cole says. “She’s been around the block.”

Barra, 51, has spent 33 years with GM, joining the automaker as a co-op student while studying electrical engineering at the General Motors Institute, now Kettering University. She has covered nearly every corner of the business, including stints as a plant manager where she worked closely with the United Auto Workers union and as head of GM human resources, where she led a massive restructuring of its white-collar ranks out of the 2009 bankruptcy.

Barra’s ties to the automaker run deep. As a teenager, she would pore over vehicles her father, a GM die maker, would bring home. Her first car was a Pontiac Firebird muscle car.

“Mary Barra is a great choice, (with) 30-plus years at the company,” Akerson tells journalists in a conference call Tuesday to discuss the appointment and his retirement, effective Jan. 15.

Akerson says too often industry watchers focus on her stint as head of human resources, neglecting Barra’s lengthy and rounded resume.

“She grew up in the company, worked on the factory floor, managed plants and then managed the largest, most complex segment of our business, and that is global product development and purchasing and supply-chain management.

“Eminently qualified, well-received in the company and a testimony to the breadth and depth of our management team,” Akerson says.

Whitacre became the first industry outsider to function as CEO of the 105-year-old automaker in 2009 after the GM board fired longtime executive Fritz Henderson. Henderson had briefly replaced Rick Wagoner, another career GM executive who was ousted by President Obama’s automotive task force as part of the automaker’s financial rescue.

The task force at the time saw removing GM’s insular culture, where executives shared educational and professional upbringings within the automaker, as a key element to effecting change and saving the business.

Ken Elias, a partner with industry consultant Maryann Keller & Assoc., says GM needed that outsider four years ago. The new GM needs an insider, he says.

“Time and circumstance have a lot to with it,” he says of GM’s recent leadership perspectives. “This was the right choice, a good move for everyone involved and she’s young enough and smart enough to know GM’s old ways won’t work.

“The big thing here is she gets it: no more crappy product,” he says.

Akerson says GM’s restructuring could be boiled down to two elements: reformation from a poorly managed entity quick to blame failures on external forces, and transformation from an inward-looking organization to one that is outwardly focused on its customers.

He credits Barra with improving GM customer satisfaction and product quality and excellence, while establishing order at a product-development unit he saw as chaotic when he gave her the reins in 2011.

Marina Whitman, a professor of business administration and public policy at the Ross School of Business at the University of Michigan, says Barra’s appointment strikes the correct balance between progressiveness and provincialism.

“Mary Barra is what the (old GM) management wasn’t,” says Whitman, a former chief economist at GM and one of its first female vice presidents. “She is future-oriented, focused on where the company is going and not where it has been.

“So she has the correct orientation and from the point of view of the company, they can say, ‘She’s one of us,’” Whitman tells WardsAuto. “That’s a winning combination.”

Akerson downplays the historical aspect of Barra becoming the first female to lead an automaker. He calls the notion of GM as a boys’ club outdated, pointing to 25% of its plants being managed by women, as well as a large number of senior jobs now held by women and five women on the GM board.

“That’s an old perception of General Motors,” he says. “Mary was not picked because of her gender. Mary is one of the most gifted executives I’ve met in my career.”

But Barra’s role as the global auto industry’s first female CEO hardly goes unnoticed, lighting up social media feeds.

Former Michigan Gov. Jennifer Granholm tweets, “So happy to see this. We need more chicks in charge! Great move by GM.” California Congresswoman Nancy Pelosi adds, “Congrats to Mary Barra, a leader who will revolutionize GM as the American auto company’s first woman CEO.”

Expect Barra to tinker further with GM’s leadership team, which through its restructuring has witnessed enormous churn, the experts say. The new culture, however, likely is here to stay.

“There’s a new business model,” Cole says. “Management has moved from the idea of a king to a coach. We’re seeing the team concept emerging.”

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