Daniel Acker—Getty Images

How GM’s Mary Barra Does It

The car company has rebounded under her leadership.

When Mary Barra became CEO of General Motors gm in January 2014, she was by most measures an utterly conventional candidate for the job.

Barra had worked for GM her entire career. Her father was a GM lifer too. And she had graduated (in 1985) from Kettering University in Flint, Mich., previously named the General Motors Institute, a fine engineering school but also a decades-long incubator of GM executive inbreeding.

So even though Barra’s gender set her apart from every previous GM CEO, some auto-­industry watchers fretted she would let the company relapse into the arrogance, complacency, and denial that plunged it into bankruptcy in 2009.

But that hasn’t happened.

Barra, 54, has steered GM deftly through the 2014 ignition-switch scandal. The fallout from that is expected to include some $5 billion in fines, lawsuit settlements, and recall costs (CK), but GM has avoided a reputational cataclysm. “Terrible things happened,” she declared forth rightly in a video message to employees that was released to the public. Instead of circling the wagons as GM had done in past safety scandals—notably involving the Chevy Corvair in the 1960s and the faulty “X-cars” in the 1980s—Barra commissioned an independent investigation that resulted in firings and early retirements.

To see the full 2016 Most Powerful Women list, click here. (Mary Barra is No. 1 in 2016)

 

Mary Barra, CEO, General MotorsPhotograph by Marvin Shaouni for Fortune Magazine

 

In 2015, GM made the gutsy move to wind down operations in Russia, unlike Ford f , which stayed in a BRIC market that has looked problematic for years. More recently GM posted what Goldman Sachs gs called a “very strong beat” compared with Wall Street estimates on second-quarter earnings ($1.86 per share vs. forecasts of $1.52), while Ford missed expectations and issued a full-year profit warning.

To be sure, Barra and GM have benefited from strong tailwinds. U.S. car sales have surged 70% since the financial crisis. The company’s model “mix,” industry jargon for the types of vehicles sold, has skewed heavily to trucks and SUVs, which carry far fatter profits than cars. And commodities prices—steel, copper, etc.—have been low. But rival carmakers, notably Ford and Fiat Chrysler, have enjoyed the same favorable factors without capitalizing as well as GM has.

Barra has not, however, gotten GM’s stock price to respond to post-bankruptcy earnings that can only be described as stellar. Last year the company had net income of $9.7 billion, more than double the $4.7 billion it earned in 2010, with the company on a similar pace so far this year. But despite a six-year bull market, GM shares remain below the IPO price of $33 per share in November 2010.

“The stock is not getting credit for what’s going on,” says Steve Girsky, a former vice chairman who left the company’s board in June. “The stock market thinks the car market is going south, or at least about to stagnate.” The market may be right: Dealers say automakers are sweetening the profit-depressing discounts on their vehicles.

What might knock Barra off track? A resurgence in gasoline prices could certainly whack GM given that 70% of its U.S. sales last year were pickups or SUVs.

As GM’s second CEO in five years (she also was named board chairman this past January), Barra has succeeded in providing calm stability for a company that badly needed it. Insiders say Barra is nearly impossible to dislike and credit her with a collaborative style. They say she rarely loses her temper, although she can make her displeasure obvious if meetings aren’t going well.

Some credit people skills honed in her early years in factory management, a rare background for senior GM executives. Others cite a controlled ego that lets others have the limelight, unlike some of her predecessors. Indeed, one measure of those leadership skills, it seems, is her ability to retain, and work effectively with, her erstwhile rivals for the CEO’s job: GM president Dan Ammann and Mark Reuss, executive vice president and global chief of product development, purchasing, and supply chain. Ammann, for instance, has led the company’s push into new technologies, including a stake in ride-hailing service Lyft and the acquisition of Cruise Automation, a Silicon Valley driverless-car shop. (Tellingly, it was he, not Barra, who was quoted in the company’s Cruise press release.)

So what might knock Barra off track? A resurgence in gasoline prices could certainly whack the company given that 70% of GM’s U.S. sales last year were pickups or SUVs.

Inside The 2015 North American International Auto Show (NAIAS) Barra, flanked by fellow executives who were considered candidates for the CEO job she got: GM president Dan Ammann (left) and EVP Mark Reuss.Daniel Acker—Getty Images

Also, GM could trail in the three simultaneous automotive technology revolutions: propulsion, connectivity, and autonomy. On the propulsion front, the all-electric Chevy Bolt that launches later this year promises a 200-mile range between charges for a price of $30,000 after federal tax credits. It will beat Tesla’s new budget-priced Model 3 to ­market—but will consumers choose a Chevy when they can have the prestige of a Tesla?

As for the movements toward autonomy—a.k.a. driverless cars and the widespread use of smartphones to summon Ubers—both might undercut the appeal of car ownership to begin with. Uber and Lyft already are making a modest dent in the archetype of the two-car family.

Nearer term, the old GM culture could reemerge. The United Automobile Workers union is a more cooperative partner than it was pre-bankruptcy, but that détente might not last. The contract the union signed last year was, at first, rejected by GM’s skilled-trades workers (electricians, machinists, etc.); the union relented only after the company accepted changes protecting their classifications and seniority.

For GM, the best defense against slipping backward will be Barra’s own vigilance. The biggest lesson she learned from GM’s bankruptcy, she told a women’s forum in 2012, is that “if you have a problem, you’ve got to solve it. Because that problem is going to get bigger in six months. It could get bigger in two years. But it’s not going to get smaller with time.”

To read more about Mary Barra, see our Q&A with her here: Mary Barra Is Changing GM’s Culture—Now Can She Move Its Stock?

A version of this article appears in the September 15, 2016 issue of Fortune with the headline “Hail, Mary.”

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