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GM Chooses Barra as First Female CEO of Global Automaker

Dec. 10 (Bloomberg) -- Matt Miller reports on his interview with GM's possible new CEO Mary Barra. Miller speaks on Bloomberg Television's "In The Loop." (Source: Bloomberg)

General Motors Co. (GM) named Mary Barra to succeed Dan Akerson as chief executive officer, completing the GM insider’s rise from a factory-floor worker to the industry’s first female CEO after more than a century of global automaking.

Barra, 51, takes over a company that has emerged from near-collapse a half decade ago, after an infusion of government cash and outside managers. Her elevation was announced a day after the U.S. government said it had sold its final shares of GM.

An engineer who holds a Stanford MBA, Barra inherits a company that is at its leanest in decades and light on debt. It has one of the U.S.’s newest and most acclaimed lineups, and a newfound strength in small and midsize cars, from the Chevrolet Cruze to the Cadillac CTS. It also faces threats, ranging from Japanese rival Toyota Motor Corp. (7203), which is increasingly using no-interest loans to win business, to Tesla Motors Inc., which Akerson has identified as an industry disruptor.

With Barra’s appointment, GM returns to the hands of an in-house manager after two leaders plucked from outside Detroit since 2009. A Pontiac die maker’s daughter who started as an intern more than 30 years ago, Barra was most recently the chief of product development and quality for all GM cars and trucks, where she oversaw the introduction of the well-received Chevrolet Impala and cut costs by standardizing parts.

Photographer: Andrew Harrer/Bloomberg

Mary Barra, senior vice president at General Motors Co. (GM), speaks about the Buick Encore compact crossover sports utility vehicle (SUV) during the 2012 North American International Auto Show (NAIAS) in Detroit, Michigan, on Jan. 10, 2012. Close

Mary Barra, senior vice president at General Motors Co. (GM), speaks about the Buick... Read More

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Photographer: Andrew Harrer/Bloomberg

Mary Barra, senior vice president at General Motors Co. (GM), speaks about the Buick Encore compact crossover sports utility vehicle (SUV) during the 2012 North American International Auto Show (NAIAS) in Detroit, Michigan, on Jan. 10, 2012.

Engineering Background

“After a long run of CEOs with financial backgrounds and orientations, the company is once again choosing an engineer for its top role,” Bill Visnic, an analyst at Edmunds.com, said in an e-mail. “It could be interpreted as a signal that GM believes it’s as much a car-making company as a money-making company.”

Barra will take over in January, GM said. Akerson, CEO since 2010, turned 65 in October and his wife was recently diagnosed with an advanced stage of cancer, the company said in a statement.

Dan Ammann, the chief financial officer, was named president of the company. Akerson is retiring Jan. 15, and he’ll be replaced as chairman by Tim Solso, the former CEO and chairman of engine-maker Cummins Inc.

New Generation

Barra represents a younger generation of auto executive. She will be 52 when she formally takes the job in January, about the same age as Rick Wagoner in 2000 and Fritz Henderson in 2009, when they became CEO. Mark Fields, 52, as Ford Motor Co.’s chief operating officer is the heir apparent to succeed CEO Alan Mulally, 68, who is in talks with Microsoft Corp. about a similar role, according to people familiar with the matter.

Her promotion reflects a GM development system that predated the automaker’s 2009 bankruptcy. The automaker hired her as a college student, made her executive assistant to CEO Jack Smith, sent her to Stanford and entrusted her with increasing responsibility include plant manager, vice president of manufacturing engineering, vice president of human resources and finally product-development chief.

Bloomberg Businessweek: Meet Mary Barra, GM's Next CEO

In early 2011, less than six months after Akerson became CEO, he promoted Barra to head the product-development team once run by legendary car guy Bob Lutz in early 2011, less than six months after he became CEO. While 22 months in the job leaves a window too narrow for her to have overseen new models from start to finish, she is credited by many with dramatically improving GM’s lineup.

Honored Vehicles

Three of the six finalists for North American Car and Truck/Utility of the Year are GM vehicles: The Chevrolet Corvette Stingray, Cadillac CTS and Chevrolet Silverado.

“Here’s proof that they’re on the right track in terms of product,” said Michelle Krebs, an analyst for researcher Edmunds.com and a juror who voted on the finalists. “You can argue these were still developed under Lutz, but she shepherded them through and got them launched. That’s a really key point -- they’re doing a very good job of launching new vehicles.”

Barra’s decades at the company give her perspective on what worked at old GM and what needed to change to compete.

“She knows General Motors backwards and forwards. She just had all the attributes necessary to be a great leader,” former Chairman and CEO Ed Whitacre said in an interview on Bloomberg Television. “GM has some good momentum. The financials have been good, the product is excellent. She’ll have to continue that momentum and that’ll be a challenge for her, but she’ll be up to it.”

Rising Women

As the first female CEO of a global automaker, Barra joins Ginni Rometty at International Business Machines Corp., Indra Nooyi at PepsiCo Inc., Marissa Mayer at Yahoo! Inc., Hewlett-Packard Co.’s Meg Whitman and Ursula Burns of Xerox Corp. as women who have risen to run major U.S. corporations.

She beat out Mark Reuss, 50, president of GM North America, another longtime company executive whose father, Lloyd, was fired as company president in 1992. Others who were seen as potential successors to Akerson include Ammann, 41, who joined GM in 2010 from Morgan Stanley, and Vice Chairman Steve Girsky, 51, a former Wall Street analyst at Morgan Stanley and adviser to GM CEOs and the United Auto Workers union.

Girsky will become a senior adviser until leaving the automaker in April 2014. He will remain on the board. Reuss replaces Barra as executive vice president for global product development, purchasing and supply chain.

“He knows product better than anyone,” said Krebs.

‘Car Gal’

Akerson presaged Barra’s appointment earlier this year when he predicted that a woman will eventually run one of the three largest U.S.-based automakers.

“The Detroit Three are all run by non-car guys,” Akerson said in September in Detroit. “Someday, there will be a Detroit Three that’s run by a car gal.”

He declined to identify any contenders at the time, saying only that “there are an unbelievable number of talented women in automotive, certainly at General Motors.”

Barra began with GM in 1980 as a student at General Motors Institute (since renamed Kettering University) in Flint, Michigan, where she earned a degree in electrical engineering and landed her first job as a plant engineer at Pontiac Motor Division, where her father worked for 39 years. There were few women and even fewer 18-year-olds.

“It was a rougher environment,” she said in an interview in March. “It makes you harder.”

GM Product

GM put her in a program for high-potential workers and gave her a scholarship to get an MBA from the Stanford Graduate School of Business. She became an executive assistant for then-CEO Jack Smith, gaining a window into how the company worked. Barra, who is married with two children, recalls visiting senior leaders at GM to talk about diversity and women’s issues while she was pregnant.

Barra has played a role in GM management for a generation. Her career has included time as vice president of global manufacturing engineering, head of GM’s Detroit Hamtramck Assembly Plant and executive director of competitive operations engineering.

In 2009, she was named the company’s top human-resources executive, assigned with keeping key roles filled as the company worked its way out from bankruptcy. Barra also attacked GM’s bureaucracy, slashing the number of required HR reports by 90 percent and shrinking the company’s employee policy manual by 80 percent, the company said.

Product Chief

When Akerson appointed her senior vice president of the $15 billion vehicle-development operations in 2011 -- making her GM’s first female products chief -- the move didn’t sit well with many car guys in the company and around Detroit.

Her record as the head of product development -- which gave her sway over the look and feel of GM’s full line -- has had mixed results. She oversaw the introduction of the Cadillac CTS, picked as Motor Trend’s car of the year. The Chevy Impala that came out under her watch was the first U.S. sedan in at least 20 years chosen by Consumer Reports as the best on the market.

At the same time, General Motors remains less profitable than peers even after Barra has taken pains to drive out costs -- such as by aligning purchasing and product development, powerful units that had long been at odds. She also sought to make GM more profitable by building a wider variety of cars and trucks that use the same parts -- following the example of Billy Durant, who founded the company more than 105 years ago.

Streamlining Company

Other steps include eliminating levels of management and reducing manufacturing complexity by building more models using fewer “platforms” -- industry-speak for the basic structure and parts that can be tweaked and repurposed for multiple vehicles.

GM, which received about $50 billion from the U.S. government as part of its rescue, has made about $26 billion in profit over the past 15 quarters. Still, the automaker is nowhere near as profitable as global competitors such as Toyota and Volkswagen AG. (VOW) GM’s operations are much more complex -- and expensive -- than those of its major rivals, according to Adam Jonas, an analyst with Morgan Stanley.

Akerson in a conference call today defended his product chief’s record.

“Mary went into an organization that, quite frankly, four years ago, was in chaos and brought order and started to fundamentally transform how we do product development,” Akerson said. “She grew up in the company, worked on the factory floor, managed plants and then managed the largest most-complex segment of our business.”

To contact the reporter on this story: Tim Higgins in Southfield, Michigan at thiggins21@bloomberg.net

To contact the editor responsible for this story: Jamie Butters at jbutters@bloomberg.net

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