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For GM, an End and a New Beginning

Mary Barra at the 2012 Detroit Auto Show

Photograph by Andrew Harrer/Bloomberg

Mary Barra at the 2012 Detroit Auto Show

In the PR business, it’s called a good news day.

It was just that and more for General Motors (GM), as the Treasury Department on Dec. 9 announced the sale of the last of the GM shares acquired during the auto bailout, and less than 24 hours later the automaker announced that Mary Barra, a 33-year company veteran, would become GM’s new chief executive officer—the first woman to head up a major U.S. automaker.

In Barra, who started her career as a co-op student at GM’s then-Pontiac Motor Division while working on an electrical engineering degree at the General Motors Institute (now Kettering University), GM not only has chosen an accomplished executive—she currently serves as senior vice president for global product development—but it has tapped into a significant consumer development: Cars are not just a “guy” thing anymore.

Women are clearly in the driver’s seat, both literally and figuratively, purchasing an estimated 65 percent of all new autos, according to Road & Travel Magazine, and “influencing” an even higher percentage of sales, perhaps as much as 95 percent.

It’s only logical, as CNN’s Felicia Taylor and Catriona Davies suggested a year before the Barra appointment, that women should play a major role in the auto industry.

Though Barra’s appointment is an historic first, she’s not alone at the top. Linamar, a major manufacturer of auto components, assemblies, and castings, is headed by Linda Hasenfratz. Melinda Holman is CEO of Holman Automotive Group, which includes dealerships, an auto parts distributorship, and the largest privately owned motor carrier leasing and management company in the U.S. And Pamela Nicholson this fall was named CEO of Enterprise Holdings, the world’s largest rental car company.

It’s still OK to be a “car guy.” But we need to recognize that women love cars as well—and more and more, as they earn degrees and advance in the workplace, they will play an ever-larger role in every aspect of the industry: from R&D and design to marketing, sales, and maintenance. That includes top management, too. That’s the future.

The bailout is history. Looking back, we can debate from now until doomsday what would have happened to GM if Washington hadn’t pumped some $50 billion into the troubled U.S. automaker during the Great Recession, acquiring a nearly 61 percent stake in the company.

Some seem to operate under the assumption that absent the bailout, the company probably would have disappeared. And Barra today would be working elsewhere.

A new study from the Center for Automotive Research (CAR), for example, maintains that the bailout saved 1.2 million jobs. The CAR study claims there were just two roads forward at the time of the bailout: “a quick, orderly Section 363 bankruptcy (which is what happened), and a drawn-out, disorderly bankruptcy proceeding leading to a liquidation.” Personally, I doubt those were the only options.

What we do know—and what is not debatable—is that the bailout cost more than $10 billion. We know GM survived, minus its Pontiac, Saturn, and Hummer brands. And we know the company is doing well, with a slew of new or revamped models in the pipeline, some of which, including the Chevy Impala and Cadillac CTS, have received rave reviews.

As the person responsible for product development, Mary Barra’s leadership has preceded her to the CEO’s suite.

Harold L. Sirkin is a Chicago-based senior partner of The Boston Consulting Group (BCG), a professor at Northwestern University’s Kellogg School of Management, and co-author, most recently, of The U.S. Manufacturing Renaissance: How Shifting Global Economics Are Creating an American Comeback (Knowledge@Wharton, November 2012).

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