Mary Barra was about 10 when she first fell in love with a car. It was a red Chevy Camaro convertible, late-'60s vintage, driven by her older cousin. When Barra describes it, her brown eyes widen and her cheeks flush just a touch. "It was just a beautiful, beautiful vehicle," she says at her office high in the tower that houses General Motors' corporate headquarters. "The first vehicle where I went, 'Wow, that is cool.'"
When the time came to buy herself a set of wheels, Barra still had muscle on her mind. She plunked down a deposit on a Pontiac Firebird, the iconic hot rod of the late 1970s. But at the last moment she blinked. Bound for college, watching her budget, she bought a Chevrolet Chevette, an affordable, boxy hatchback that the automaker marketed by emphasizing its legroom and trunk space. Promotional films from the time show the car struggling to stay on four wheels as it rattles around corners at suburban speeds. She still thinks about that Firebird.
Today, Barra's job—and her storied employer's fate—boils down to making sure no car buyer ever wrestles with that kind of tradeoff again.
Barra, MBA '90, took the wheel in February as GM's senior vice president for global product development—and became the highest-ranking woman in the automotive industry. In charge of engineering, design and quality control for the world's second-largest automaker (after Toyota), she has arrived just in time to lead GM's product line into a very uncertain future.
As the world warms and oil prices roller-coaster upward, automakers face the biggest overhaul of their industry since the birth of the assembly line. We don't know what exactly the cars of the coming decades will look like: They could plug into wall sockets, or guzzle advanced biofuels, or run on hydrogen fuel cells or even liquefied sunlight. But in the increasingly globalized auto market, we know consumers aren't likely to buy any vehicle that doesn't deliver style and performance commensurate with its greener engine. If GM wants to keep making and selling cars, it must find a way to combine the practicality that drove Mary Barra into a Chevette with the swoon she got from her cousin's Camaro.
Barra understands the depth of the challenge. "Whatever happens, it's going to be a more fuel-efficient vehicle in 5, 10, 15 years," she says. "My goal is to make sure we do that with a suite of products for customers based on their needs and wants." Later, she adds, "We're going to have beautiful, innovative designs. We're going to put the right technology on the vehicle by [consumer] segment, the way the customer wants it. We're going to have the right quality and the right performance features. Repeating that process—it's as simple as that and as hard as that."
Detroit automakers owe much of their high-profile woes over the past few decades to an inability to fit together those pieces—quality, performance, efficiency, technology. Barra has seen the struggles firsthand. She grew up in Waterford, Mich., where her father worked 39 years as a GM die maker. That oh-so-practical Chevette took her to General Motors Institute (since renamed Kettering University) in Flint, Mich., an engineering and management school that served as a sort of ROTC for GM. She earned an electrical engineering degree there, interning at the plant that produced the sporty Pontiac Fiero.
When she started at the plant, GM and its Big Three brethren were bleeding market share to Japanese competitors such as Honda and Toyota, whose cars American consumers had come to regard as more reliable and affordable. The focus on the Fiero line was quality: reducing defects, rebuilding public trust. Barra showed her faith by ditching the Chevette for a black Fiero her senior year.
In 1988, a GM fellowship took Barra to Stanford to earn an MBA. She would go on to rise through the management ranks, running engineering divisions and managing an assembly plant. GM turned out increasingly reliable cars, earned higher quality ratings and slowly, but surely, won back consumer confidence. Still, its market share eroded. By the early 2000s, GM was suffering under the weight of a cost structure—wages, pensions, health-care costs—that made a standard GM vehicle thousands of dollars more expensive to produce than a foreign competitor's.
To bridge the gap, GM and other domestic automakers stripped many cars of pricey features such as plush interiors or advanced electronics—which only served to devalue the vehicles in customers' eyes. They also chased the higher profit margins in manufacturing trucks and large sport utility vehicles that got miserable gas mileage. Spiking oil prices in 2006-07 caught Detroit flat-footed. The 2008 financial crisis pushed GM and Chrysler into bankruptcy.
Barra tries not to dwell on the dark days before and after GM filed Chapter 11—a period the company's employees, from hourly workers to top executives, discuss in graveyard-whistling tones. Like so many others at the downtown Detroit headquarters, she worked for days at a time, with little sleep. "It was a very difficult, and very humbling, time," Barra says. But she says she never doubted the company would survive. "We're going to get through," she says she kept thinking. "We're going to make it through."
GM was saved only by billions of dollars in federal bailout funds. The government-approved leadership tapped Barra in July 2009 to run the humbled company's human resources division. Then in January 2011, CEO Daniel Akerson named her head of global product development. The job placed Barra one step below Akerson on the GM corporate ladder, one of the top seven executives in the company. She oversees more than 30,000 employees worldwide, and her day-to-day huddles with designers and engineers determine which vehicles make it to the assembly line.
Barra began her tenure with a tailwind of sorts—or as much of one as anyone has had at GM in years. The company had shrugged off much of the weight of its uncompetitive cost structure, largely through financial concessions won in emerging from bankruptcy and from closing or selling off product lines such as Saturn and Hummer. It was starting to rake in profits again. Perhaps most important for its long-term viability, GM, like its domestic rivals, was finally catching up to foreign automakers in addressing the Chevette/Firebird dilemma.
For a long time, consumers of American cars could get a really sexy vehicle or a really practical one, but they rarely got one that was both. And if there's anything American consumers want, it's everything, in one package. Maybe the best example is in the truck market. Pickups, led by the Ford F-150 and the Chevy Silverado, top the list of America's best-selling vehicles. These truck buyers are not hauling beams to construction sites. Most buyers are suburbanites who just like to tow a boat on the weekend or flip down the tailgate outside the football stadium. They want the power, the performance, the cool, of a pickup.
Ever since gas cracked $4 per gallon, industry research shows, truck buyers have clamored for vastly improved fuel economy—without sacrificing anything else. Ford has pushed hard to respond, retooling its pickups with smaller, more efficient engines that deliver the same power as a roaring V-8. (In F-150 ads that run during TV football games, guys' guy actor Denis Leary brags about towing capacity and mpg in the same breath.)
To combine performance and mileage in smaller cars, GM recently introduced the Chevrolet Cruze, a sleek little head-turner aimed at young buyers that was the bestselling car in America in June. The bigger test—for the company and for Barra—will be the relaunch of the Silverado and the rest of GM's truck and SUV line. Complicating matters is the volatility of gasoline prices, which are trending up but have bounced from as low as $1.67 per gallon to as high as $4 per gallon in the past two years.
FAST RISE: Workers gathered as the first Chevrolet Cruze rolled off the line in September 2010. The Cruze was the bestselling car in America in June. (Photo: Amy Sancetta/AP Photo)
"They've got great small vehicles" at GM, says Dave Cole, chairman emeritus of the independent Center for Automotive Research in Ann Arbor, Mich. "That's not going to be a problem. But to be successful in this environment, to bet on a future high energy price, you've got to hit your bet, which means you've got to have products that work whatever the energy price is."
There's another balance the firm must strike. GM increasingly needs to roll out products that work across emerging markets as well as traditional ones. The more the company can use common platforms for cars around the world—which is to say, build and sell the same cars in Beijing and Detroit—the more it can capture economies of scale and save money. Problem is, buyers in China differ widely from buyers in Michigan, in terms of how far they drive, what features they crave and how much they can spend on a vehicle. "The way somebody drives in India is very different than the way somebody drives in the United States," Barra says, but she has to build for both, with as much overlap as possible.
Asia looms as GM's most important market over the next decade. China and India are home to droves of prospective first-time car owners—young people who are rising out of poverty and into a middle-class lifestyle that includes a vehicle. The Scotiabank Group forecasts Chinese consumers will buy more than 25 million cars and trucks in 2025, up from 10 million this year. Vehicle sales doubled over the past five years in India to 2 million units, Scotiabank says, and are expected to double again by the end of the decade.
Competition for this business will be fierce—especially from Indian automakers who, thanks to labor and production costs well below Detroit's, are turning out starter cars that cost a few thousand dollars. (In contrast, GM's new Michigan-made subcompact, the Sonic, which incorporates several shop-floor and pay-scale innovations to minimize cost, retails for about $14,000 in the United States.)
THE WORLD OF SUBCOMPACTS: An Indian carmaker like Tata, maker of the Nano (left), has labor costs well below GM, whose Sonic will compete in emerging markets. (Photo: Rajanish Kakade/AP Photo; Courtesy General Motors)To handle such challenges in the past, GM relied on the legendary instincts of Bob Lutz, its longtime, design-savvy product chief, now retired. In his book, Car Guys vs. Bean Counters: The Battle for the Soul of American Business, Lutz writes about his from-the-gut leadership style, noting that he may have inadvertently set up GM for struggles after his retirement, because he relied so much "on my own will and my considerable influence."
GM executives and outside analysts say Barra's approach is diametrically different, one that relies on team-building and seeks consensus. She holds "hall meetings" to solicit advice on project direction. She challenges engineers and designers to rethink their assumptions. Lutz's motto was "Often wrong, never in doubt." Barra's might be: "Let's all figure this out together."
"Mary is trying to bring order to the business," says John Calabrese, GM's vice president of global vehicle engineering, who has worked with Barra in different capacities for 12 years. "She's very methodical, very logical, very fair. She challenges the status quo pretty well. She's provocative. . . . She's an outstanding listener. And I guess she kind of has a consensus approach, but when it's not coming together, she gets concise and she's pretty decisive."
Barra cultivates that image in the course of an interview in Detroit for this article. She deflects questions about her vision for the future of GM's product line. Asked what imprint she hopes to leave on the company—what we'll say a Mary Barra-era vehicle looks like—she demurs and talks about her team.
"My job is to keep with the technology advancement so that the consumers are able to choose," she says. "I want them to be able to choose what they drive because there's such a connection of how people pick vehicles, of what they like. So if we as a company have the right technology that allows us to deliver the fuel economy that is, I think, where the world is going, yet still offer a range of size and products to meet people's needs and wants, that's how we win."
Barra has no hesitation ticking off a list of challenges GM—and every carmaker—must confront. Automakers must develop and master advanced propulsion systems, including electric-powered cars and trucks that can drive hundreds of miles without a charge and deliver handling and brawn on par with traditional gasoline engines. Engineers will need to safely integrate smart technology for drivers and "infotainment" for passengers. "The experience in the front seat is very different than the experience in the back seat," Barra says. "We have to understand that."
ROAD SHOW: Barra reviews infotainment gear that will appear in future vehicles. (Photo: Fabrizio Consatini/Wall Street Journal)
Colleagues say Barra's understanding flows from her long and varied career at GM. In person, though, it's hard to shake the idea that her approach to the job started with her cousin's red convertible —that she is, at heart, a car girl.
She has arrived for the interview in a black pantsuit, her blouse open at the neck. At 9 a.m., she sips a Diet Coke from the can. Her smile is as warm and friendly as, well, a Camaro, which, incidentally, is not her day-to-day car these days. That would be a Cadillac Escalade, a status-symbol favorite of pro athletes, that Barra chose largely for its carrying capacity; her 14-year-old son was until recently a hockey goalie, a job that comes with a lot of gear.
Barra seldom has time to take the Escalade out for a cruise, but she often looks forward to her 35-minute commute. Really. "There's days when, after a long day of work," she says, "you get into your car, and you're like, this is fun. I get to drive this home." At least once a week, she takes a vehicle in development out for a spin on a GM test track.
Thanks to her son and her 12-year-old daughter, Barra has been thinking lately about the challenge of designing cars for what's been dubbed the millennial generation. These consumers—the children of Baby Boomers—often have lived a life without tradeoffs. Even more than their parents, they're not going to stomach the idea of sacrificing performance for economy. They're going to drive cars that, under proposed federal fuel regulations, will average 54.4 mpg, and they will expect those cars to corner well, go zero to 60 in a few ticks and incorporate all their favorite electronic toys. If Detroit won't sell them that, some foreign competitor will.
Like their mother, Barra's children pine, romantically, for their first vehicles. Her daughter is saving up for a Chevy Equinox SUV. Her son has been drawing cars since he was 3. Recently, Barra's husband ordered a new car. (Surprise! It was a Camaro.) Mother and father noticed the teenager doing some calculations in his head. Hey, Dad, he said, how about we get it in orange? "We had to tell him," Barra says, "the odds of you having the Camaro when you're 16 probably are pretty small."
Take heart, kid: You can get a used Chevette these days for a song. Check out that trunk space!
Jim Tankersley, '00, is the economics correspondent for the National Journal.
