GM’s new CEO Mary Barra is no ‘car girl’

December 10, 2013, 4:19 PM UTC
Photo: Stuart Isett/Fortune Most Powerful Women

Like a conscientious housekeeper, General Motors (GM) chairman and CEO Dan Akerson has been tidying up the automaker for the past several months in preparation for his sudden, though not surprising, decision to retire in January.

He rearranged GM’s international operations, put a new man in charge of China, and ordered a halt to the decade-long effort to establish Chevrolet as a budget brand in Europe. And he signaled to all that Mary Barra was his most likely successor in August by handing her a big promotion. In a prediction that would have been published in the upcoming issue of Fortune, I wrote, “Akerson has said he favors an internal candidate to succeed him and that it was ‘inevitable’ that a woman would run GM someday — which clears the way for senior vice president Mary Barra. GM’s highest ranking woman.” On Tuesday, GM made it official. That’s great news for Barra, whose promotion ups the ante for women in charge of Fortune 500 companies; but it does mean the spike for my article. Alas.

The company Barra inherits is much changed from the one Akerson reluctantly took over four years ago, stronger in many ways but still with significant weaknesses. The news comes a day after the Treasury Department said it unloaded its final stake in GM, which closes the book on Uncle Sam’s 2009 bailout of the auto industry. But losses in Europe continue to mount (though they may have leveled off), as GM fights to hold on to its gains in China against a resurgent Volkswagen. Meanwhile the company has to reestablish itself as a technology leader after lavishing more than a billion dollars on the failed Chevrolet Volt.

But Barra is highly qualified to deal with these issues. As head of global product development, purchasing, and supply chain, she was deeply involved in the restructuring of Europe’s Opel. Her engineering background and ability to put hands on will allow her to efficiently supervise the rebuilding of GM’s product portfolio, which already includes such recent hits as the new Cadillac CTS, Chevrolet Impala, and Corvette. And her earlier stint as head of human resources gives her rare and valuable insights into GM’s still evolving employee culture.

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Her appointment will be widely praised. Said Chicago-based consultant Gregory Carrott: “Simply the act of naming a woman, and one with great smarts, skill, and toughness, sends a powerful message about what the GM board values. It values competence over making nice.”

Besides having a knack for climbing the corporate ladder — she started at GM as a student intern — Barra is the living embodiment of Teddy Roosevelt’s admonition to speak softly but carry a big stick. With a keen eye for spotting incidents of corporate idiocy, she manages to correct or reverse them with a steely resolve delivered with a soft message. She is that rare executive who doesn’t ignore common sense when faced with a complicated problem.

Her biggest challenge is to win over those surviving GM traditionalists, the “car guys” who adored Barra’s predecessor Bob Lutz and whose overwhelming choice for CEO was Mark Reuss, president of North American operations. Reuss also had a big hand in the launch of GM’s successful new vehicles, was recognized as a certified “hot-shoe” driver, and, as the son of a former GM president, is a member of GM royalty. But he may be too shy of experience in Europe and Asia, and too connected to GM’s old-boy network to suit Akerson, who saw the chance to name Barra his successor as an historic opportunity.

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Reuss will get an opportunity to further flex his car guy muscles by moving into Barra’s old product development job, but his visibility will be much reduced. The other big winner from the management shuffle that accompanied the Barra announcement is chief financial officer Dan Ammann, a veteran of Wall Street who after less than half a dozen years in the auto business, was effectively handed the job of running international operations as well as the global Chevrolet and Cadillac brands. Vice chairman Steve Girsky takes a long-delayed retirement from day-to-day operations but will continue to generate ideas and suggestions from his seat on the board of directors.

For Barra, the distractions as the first woman CEO in Detroit — and the global auto industry in general, by most accounts, will be enormous. She will know she has become successful when people stop referring to her as a “car girl” and just call her “boss.”