Mary Barra made history by working her way into Detroit's car-guy club and becoming the first female CEO of General Motors. Now, can she fix the company?
Mary Barra, mother of two and the first female CEO of General Motors, sat silently while the parents of 10 dead children unloaded their grief and anger on her. Some read prepared statements; others spoke off the cuff. One father unbuttoned his dress shirt to reveal his daughter’s face on the T-shirt underneath. All were strangers but shared a tragic bond: Their loved ones died in a GM vehicle.
Renee Trautwein’s daughter, Sarah, 19, completed only one semester at her dream college before her 2005 Chevrolet Cobalt hit a tree. The air bag didn’t deploy. Doug Weigel’s daughter, Natasha, 18, died in Wisconsin after the 2005 Cobalt she was riding in crashed into a ditch. Randal Rademaker’s 15-year-old daughter, Amy, perished in the same crash. Susan Hayes’ son, Ryan Quigley, 23, died in upstate New York when his 2007 Cobalt landed upside down in a shallow stream.
The similarities were eerie: Young drivers lost control; air bags failed to deploy; keys were in the “accessory” position; all were driving 2005 to 2007 Chevrolet Cobalts.
“I’m truly sorry for your loss,” Barra, a dark-haired woman who bears more than a passing resemblance to actress Sally Field, said again and again, wiping her eye at one point during the nearly two-hour meeting at GM’s Washington DC office. The following day, April 1, Barra would appear before a congressional subcommittee investigating why GM waited years to recall Cobalts and other vehicles that could lose power because of a faulty ignition switch; she met with the families at the request of their attorney, Robert Hilliard.
“I put myself in their shoes and thought they deserved to be heard,” Barra told Forbes in late May, just days before the company was set to issue a report on what caused the ignition disaster—and what they planned to do to stop it from happening again. “It was very difficult for them, and I think they needed to know that General Motors cared and that we listened.”
Much as the families wanted to put a face on the statistics—at least 13 killed in 31 accidents—Barra, too, hoped to put a face on what she calls “the new General Motors”, a company that has spent much of the past five years shedding a reputation for poor quality and mismanagement, not to mention the taint of a $50 billion taxpayer-financed bankruptcy.
Being the face of GM is not easy right now. Instead of celebrating her historic achievement as the first female CEO in a traditionally male-dominated industry, a feat that landed her at No. 7 on Forbes’ 2014 list of the world’s most powerful women, Barra, 52, learnt of the ignition recall on January 31, just two weeks into her new job, and has been wrestling with it since. The original recall of 700,000 vehicles was announced on February 7, and twice expanded, to a total of 2.4 million vehicles. Since then, GM has stepped up its safety reviews and recalled some 13.6 million vehicles for everything from faulty tail lamps to potential seat belt malfunctions.
The crisis is an early, unexpected test of Barra’s leadership and has raised questions about whether the 33-year company veteran—or anyone—can really change the culture in an organisation as vast as General Motors, a company that has run through five CEOs in the last six years. Since the recall was announced, Barra has scrambled to stay ahead of the crisis, hiring an independent attorney, Anton Valukas, to lead an internal investigation and naming a new vice president of global vehicle safety, Jeff Boyer. Acknowledging that GM has both “civic and legal obligations” to victims, she tapped Kenneth Feinberg, who oversaw claims for victims of 9/11 and Hurricane Katrina, to help GM assess its options for dealing with families’ compensation claims. And, in surprisingly quick fashion, she reached an agreement with federal regulators on May 16 to pay a record $35 million fine—the maximum allowed by law—and to submit monthly reports on its safety review processes for the next year. Results of the internal investigation and Feinberg’s recommendations are due soon. So far, GM’s board is happy with Barra. “The confidence has grown over a period of time, given the way that Mary has handled all the situations: Testifying before Congress, meeting with the media,” GM Chairman Tim Solso tells Forbes. “She’s done a superb job, and the board recognises that.”
Through it all, Barra has tried to keep some semblance of normalcy. She wears a Fitbit but doesn’t always get her 10,000 steps in. She admits she’s not athletically inclined (“It would be an affront to sports,” she says) and spends most of her free time sitting in the bleachers, watching her daughter play lacrosse, her son soccer. And yes, she felt horrible when she missed her son’s junior prom because she was out of town, though she has seen lots of pictures. “My kids told me the one job they are going to hold me accountable for is mom,” she says.
Barra will also need to negotiate a new national contract with the United Auto Workers in the US, which will be looking to restore some of the benefits it lost when GM was in bad shape. Fortunately, the recall headlines haven’t hurt sales at home. In April, GM outperformed expectations, with sales up 7 percent from a year ago. Analysts like JP Morgan’s Ryan Brinkman think that the current spate of recalls might actually help sales of new GM models by driving more customers to dealerships to get their old cars fixed.
(This story appears in the 27 June, 2014 issue of Forbes India. To visit our Archives, click here.)