Within 24 hours of the official government announcement that our Treasury Department had divested itself of the last of its stock in General Motors (from its 2009 bankruptcy), GM CEO Dan Akerson made his own surprise announcement: He’s leaving early due to his wife’s advanced cancer diagnosis. And true to some informed media speculation for months, Akerson named Mary Barra as his replacement, the new CEO of the world’s largest car company.Almost immediately, everyone who had ever written anything about the car industry couldn’t wait to throw in his or her two cents — the most basic fact of all — that Barra would become the first female CEO of a major auto company in its history. Others opined that this will really shake up the auto industry’s “boys’ club” once and for all. Another, not talking about putting a woman in charge of a major car company, suggested that this was long overdue — “this” being the first time since Bob Stempel became CEO that an engineer has headed GM. That writer conveniently forgot to add the part that Stempel’s reign lasted for a very short period before GM’s board of directors dismissed him. What is truly tragic about Barra’s promotion is that a woman’s becoming the head of a major Fortune 500 company is still considered so outrageously rare that this story’s first major headline bannered the “car girl” aspect. Barra was chosen for her long history of accomplishments at General Motors over a 33-year career that started on a factory floor at Pontiac, and those accomplishments should be the story.When Outsiders Were “The Right Stuff”Then again, there is a little irony in Barra’s appointment too. After all, less than five years ago, when GM was putting itself through bankruptcy, the whole top tier of executives was summarily dismissed from the corporation. Tarred with the stigma of being GM “lifers,” they were seen as the insidious insiders who had personally destroyed the automotive giant. Just before that, the media had all cheered that the buyout of Chrysler from Daimler by Cerberus Capital Management was just what the auto industry needed: A group of exceptional businesspeople from outside of Detroit, who could clean up the mess that 100 years of automotive executives had created. So what if Cerberus’ Bob Nardelli didn’t know anything about the auto industry? It was that sort of fresh view of the industry that Detroit desperately needed. (It wasn’t, but who remembers that fiasco?)Now, with Barra promoted to GM CEO, the official line out of General Motors is that she is the ultimate GM insider, only one with a phenomenal track record — just what the General needs most today. So if you are keeping a scorecard, if in 2009 you were a GM insider, even one with a most impressive track record, such as CEO Fritz Henderson, you were out because you had destroyed GM. But four years later, if you are a GM insider with a great track record, such as Mary Barra, you’re the best long-term hope for salvation the company has.Talent Plus TemperamentThe stories now circulating say that CEO Dan Akerson really cleaned up General Motors, meanwhile bringing to market the incredible line of automotive products that has returned the General to its former glory. Not to take anything away from Akerson, but GM’s balance sheet was cleaned up during its bankruptcy. That’s when GM shed almost $80 billion in debt and every losing division it had. The reorganization of GM, still in place today, came from Fritz “lifer who had to go” Henderson. And the product line-up that ultimately saved General Motors was designed under GM vice-chairman Bob Lutz.In case you are wondering where Barra was during the start of GM’s product renaissance, she was heading up the company’s Human Resources department. And none of this suggests in any way that Barra was not the exact perfect choice to run GM. Insiders agree on her virtues: She has more common sense than most, spots problems quickly and comes to the right resolution and, most important of all, has the perfect temperament for the job and the problems it entails. Those same insiders have suggested that, while some male executives were just as capable, they lacked the right temperament for the CEO position.Therein will likely lie Barra’s biggest obstacle, the boys who got passed over for the top job. Hopefully undermining her new position will never become a factor now that, after a three-decade lapse, General Motors is finally living up to its legend. For what it’s worth, both former GM vice chairman Bob Lutz and ex-GM president Gary Cowger enthusiastically endorse Barra.Let History JudgeIt’s also true that many Ford dealers are deeply concerned about the upcoming retirement of their CEO, Alan Mulally. Dealers fear that the “palace coups” that characterized Ford’s first 100 years in business will return after Mulally leaves. After all, Mulally’s biggest claim to fame was how quickly he managed to get all of Ford’s executives on the same page and working as a solid team toward the betterment of the company. Mulally succeeded where many CEOs before him failed completely at that critical task.In the end, however, the only thing that ever matters for the long-term financial success of any major auto company, anywhere in the world, is product. And today GM, Ford and Chrysler are all selling the best vehicles they have built in their history. Still, the auto industry is cyclical and full of huge egos, which are necessary if the CEO wants to keep the car company on top of the game. With that in mind, it’s worth remembering that no one knows who’ll be a great auto manufacturer CEO until years after they take office and start their era. A great case in point was Frederick Donner. Donner ran General Motors from 1958 to 1967, during the period when GM held almost 50 percent of the American car market. Hailed as a corporate genius in his time, Donner was also the man who marginalized the “car guys” and known prima donnas, while ignoring valid complaints about GM’s quality slippage at the time, and who damaged the corporation when the public learned that his private eyes were digging for dirt on automotive safety advocate Ralph Nader in the mid-60s.More than anything else, Donner is remembered for elevating accounting over everything else, including engineering and styling. He intentionally ended the critical balance between those two warring factions that Alfred Sloan had established and maintained for decades. But, because GM was so successful in that period, few recognized that the seeds of their future problems were planted and began germinating during Donner’s tenure.Barra has been handed almost the same General Motors as Donner inherited in the late fifties: Huge amounts of cash in the bank, little debt, and in the middle of a new and distinct product style direction that is the envy of many manufacturers. One can only wish her the best in her new job. Not because she’s a woman, because that shouldn’t matter, but because she is uniquely suited for the task at hand.Still, Mary Barra’s an insider, so her promotion is a reminder of the short-cycling bipolarity in the industry. That is, today it is believed that only competent insiders at car companies are needed for the future; but just four years ago that “insider” label put corporate necks on the chopping block.© Ed Wallace 2013
Ed Wallace is a recipient of the Gerald R. Loeb Award for business journalism. He hosts Wheels, 8:00 to 1:00 Saturdays on 570 KLIF AM. E-mail: email@example.com, and read all of Ed’s work at www.insideautomotive.com.