Mary Barra takes the wheel at GM

  • Article by: THE ECONOMIST
  • Updated: December 15, 2013 - 2:36 PM

The car giant’s new boss is not only a woman but a “car guy.”

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General Motors executive Mary Barra.

Photo: Paul Sancya, Associated Press

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It may look like a firm stuck in one gear: General Motors’ market share in America, at around 18 percent, has not shifted in a while. But on Tuesday, its announcement that in January Mary Barra will take the wheel to become one of the most powerful executives in the car industry, and indeed corporate America, signals a shift up through the cogs.

Three years ago she became one of the highest-ranking women in the business when she was named head of global product development at GM. Almost as striking as the fact that she will now take the top job in what has traditionally been a male environment is that she is a genuine “car guy.”

In some respects this is a step backward for GM. She is a company woman who has spent her entire career working for the carmaker. Dan Akerson, GM’s current chairman and chief executive, who retires next year, came to Detroit from other industries, as did his counterparts at Ford and Chrysler.

That was a big change for a business distrustful of outsiders but in need of a new approach to leadership to oversee the turnaround of America’s carmakers after the ravages of a financial crisis and a crippling recession.

As Akerson noted, the new GM that emerged from Chapter 11 bankruptcy protection in 2009 is run very differently from the way the giant carmaker was managed in the past. When asked how Barra might fare in a company known for its old-boy mentality, Akerson insisted that the “perception is quite dated.”

During close to four years of leadership, Akerson has concentrated on building teams rather than the top-down management of old. But as a former military man, his brusque demeanor may have tempered his ability to resist ordering people around.

Barra is likely to take a more conciliatory approach. “Mary is a coach, and that’s the sort of management style this company needs,” said David Cole of the Center for Automotive Research. She was certainly groomed for the role. She is part of a generation of women targeted by GM to achieve great things.

The firm, embarrassed by its macho culture, has made a big effort to bring on female talent. Indeed, the carmaker now has a fast-growing cadre of top managers who are women; there are five more on its executive committee as well as Barra. A quarter of its factory managers are female. A woman runs the crucial electric-vehicle program.

GM will also benefit from Barra’s skills as a product person. She is an engineer who knows cars inside out.

Akerson leaves on an upbeat note. The carmaker’s recent profits have exceeded expectations, its share price has risen sharply in recent months and many of its latest models are widely praised for engineering, design and quality.

The new Chevrolet Impala was cited as the best interior ever tested by Consumer Reports, an influential magazine. Still, Akerson warns that “as far as we’ve come, we’ve got to go that far again.” There is plenty more room for improvement.

Other models in GM’s range are in need of the makeover she has already given to the Chevrolet Malibu and the company’s range of pickup trucks.

Successive bosses have failed to fix Opel, GM’s loss-making European arm. And the important Chinese market appears to be slowing. Barra has to make sure that she keeps improving GM’s lineup of vehicles if it is to take on Ford and Toyota.

Copyright 2013 The Economist Newspaper Limited, London. All Rights Reserved. Reprinted with permission.

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