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Power Sheet – March 17, 2016

I continue to be impressed by Mary Barra’s leadership of General Motors. Time and again she causes me to smite my forehead, at least figuratively, and ask, “This is GM?” The latest example is GM executive Michael Ableson’s testimony Tuesday to a Senate committee, when he announced that GM will introduce self-driving cars for use by the Lyft ride-hailing service within a couple of years. A couple of years? Weren’t supposed experts telling us in 2014 that it would be more like a couple of decades before autonomous vehicles were road-ready? And I’m pretty sure that the unofficial target for introduction of a Google autonomous car has been reported as 2020, and for an Apple car (even more unofficially) as 2019. As I was saying: This is GM?

But we should remember that GM has been working quietly on vehicle autonomy for quite a while. In January it invested $500 million in Lyft and put an executive on Lyft’s board. Last week it announced it was buying a 40-person software startup called Cruise Automation for a reported $1 billion; exactly what Cruise software does has not been disclosed, but GM apparently wants it badly and wants to keep it away from competitors. Barra has even said that she intends for GM to be first in introducing fully autonomous technology. That’s a squishy target, since autonomy is already arriving in increments, but it’s still an ambitious goal. Barra has also said she’s determined to make GM disrupt itself before outside disrupters do it. Lots of CEOs of big, old, incumbent companies say the same thing. Unlike most of them, she seems to be making a credible go of it.

I have no idea how well Barra will succeed. The auto industry is going through a historic transformation, and the stakes are as high as they can get. But I’m optimistic for two reasons. First, she understands that she won’t get anywhere unless she changes the GM culture, a challenge that has defeated all of her predecessors of the past 30 years. She doesn’t talk about it much. “If we want to change this elusive culture, the way I look at it, it’s changing behaviors,” she told me 18 months ago, early in her tenure. Instead of talking about culture change, she focuses on everyone behaving differently every day, starting with herself.

The second reason I’m optimistic is that Barra is entirely clear on what success means. “The ultimate proof point will be when we deliver exceptional financial results,” she told me. It’s not clear that investors are sold. The stock has jumped all over since she became CEO two years ago; right now it’s below where she started. A billion-dollar acquisition of a software startup might alarm some shareholders. That’s a lot of capital on which to earn a decent return. But the very thought of GM trying to be a leader in auto-related IT is one of those moves that make me ask, This is GM?

For now, after the company’s decades of slow, then rapid, decline, and now its apparent comeback, things are probably going in the right direction so long as I’m asking that question.

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What We’re Reading Today

Trump warns Republicans of possible ‘riots’…

…if he’s denied the nomination in a brokered convention. John Kasich‘s victory over Trump in Ohio raises the odds that Trump won’t achieve the requisite 1,237-delegate majority. In that case delegates could switch their allegiance after the first vote, and entirely new candidates could even enter, though the RNC downplayed that possibility. Ted Cruz said voters would “quite rightly revolt” if the GOP establishment thwarted Trump by adding a new competitor to the mix. CNN

Shareholders to vote on whether JPMorgan and Citigroup…

…should break up. Shareholder Bart Naylor argues that both banks are too large and should break into smaller organizations. Last year Naylor got his proposal onto Bank of America’s shareholder ballot, but only 4% favored it. This year’s resolutions ask the boards of Citigroup and JPMorgan to research the benefits of a potential breakup. Citigroup recommends a vote against the proposal; JPMorgan hasn’t yet commented.  CNBC

Brazil president taps her predecessor as chief of staff

The move by President Dilma Rousseff comes after authorities last week accused Luiz Inacio Lula da Silva of money laundering. His new position may shield Lula from prosecution; only the Supreme Court could now try him. The action further infuriated Brazilians, who have held mass protests over alleged corruption in Dilma’s inner circle involving the state-run oil company, Petrobras. She also faces impeachment; proceedings are set to begin today. Fortune

SeaWorld to end orca shows

CEO Joel Manby announced the decision, bowing to intense pressure from animal rights activists. SeaWorld will phase out the shows through 2019 and stop breeding killer whales immediately. The amusement park has struggled with its image since the documentary Blackfish was released three years ago. USA Today

Building a Better Leader

You don’t need investors to launch your startup

If the idea works and can produce cash quickly, then you don’t need the strings attached with funding, says Crowdfire CEO Nischal Shetty. Quartz

Pharma CEO gets $93 million payday

Horizon Pharma paid CEO Tim Walbert with $90 million of shares and a $2.2-million bonus for 2015, despite sales of only $757 million. The pay far surpasses other large pharmaceutical CEOs’ pay, which typically doesn’t top $10 million to $15 million. Fortune

Distracted March Madness watchers could cost companies… 

…$3.9 billion this year from lost productivity. That’s up from an estimated $1.9 billion last year because workers can now view the games in so many more ways. But, come on, you gotta watch. CNET

Defensive Decisions

A look at the Supreme Court nominee’s past 

After Merrick Garland‘s nomination yesterday, his past will become an open book. He has a reputation as a moderate who doesn’t object to the death penalty and has been deferential to agencies and experts. While Republican senators have expressed admiration for his rulings, they remain adamant that they will not consider him or any nominee until after the election. NYT

Oracle drops ties with Oregon

The tech firm has decided it will no longer consider working with the state’s government. It hired Larry Ellison‘s company to help build a healthcare exchange  in 2011, and the project became rife with problems. The two sides blamed each other. Oregon sued Oracle, and Oracle has since filed three lawsuits against the state. Senior VP Ken Glueck says Oracle will honor existing contracts but will no longer take new business from the state. Fortune

Succession uncertainty at Bridgewater

The world’s largest hedge fund has struggled with defining how succession will work when founder Ray Dalio eventually steps down. Most recently, the fund demoted co-CEO Greg Jensen and hired Jon Rubinstein to replace him. Investors and employees remain unsure how the process will work. WSJ

Up or Out

Rio Tinto CEO Sam Walsh will retire in July. The company has tapped Jean-Sebastien Jacques as Walsh’s successor.  BBC

GlaxoSmithKline announced that CEO Andrew Witty will retire in a year.  Fortune

Fortune Reads and Videos

Nike unveils shoes with laces…

…that can tie themselves. Eventually the shoes will tighten automatically as the wearer runs. Fortune

Uber sued by suspected Kalamazoo shooter

Jason Dalton is suing the ride-hailing service for emotional distress he experienced while driving for the company. He’s asking for $10 million. Fortune

First Lady won’t be on the ticket

Michelle Obama says she won’t follow Hillary Clinton by running for president one day. Fortune

The Fed won’t raise rates this month…

…but Janet Yellen still sounds enthusiastic about the economy, perhaps too much so.  Fortune

St. Patrick’s Day Quote

“Luck is believing you’re lucky.” — Tennessee Williams.  Metro

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