Exclusive Q&A: GM CEO Mary Barra On Crisis Management, Culture Change And The Future of GM

May 29 2014, 5:08am CDT | by

General Motors CEO Mary Barra, profiled in my cover story in FORBES’ 2014 Most Powerful Women issue, is only a few months into her new job and facing one of the worst safety crises in the history of the auto industry. We had a fascinating interview recently about GM’s turnaround progress, the ignition switch recall and how she’s using the crisis to accelerate change within the company. Here are excerpts of that conversation:

Forbes: You’ve had a rough honeymoon as CEO. How are you managing to handle this crisis and settle into your new role?

A lot of work was already done. The foundation is set and we’re moving it forward, and accelerating. I feel really good about the leadership team. I’ve made a couple of changes but we’re together, we’re aligned and I think there’s power in that. Clearly this is an issue. It’s a serious issue and we want to deal with it appropriately and take the right action but there’s also a real opportunity to accelerate some of the things we knew we had to get to.

Forbes: GM has made a lot of progress since bankruptcy. Where do you take the business from here?

We want to continue to make sure products are at the core so that we’re segment-leading for every market we compete in, and that we’re being true to the brand. I think we have great products right now, but the brands need work. Cadillac, for example, has a really strong showroom…but I look at it and say, is it a true standard for luxury? We’re working on that in the United States, and I think we have a huge opportunity for Cadillac in China, and then globally.

Forbes: You discontinued Chevrolet in Europe to focus on Opel. Is GM Europe fixed?

Karl-Thomas Neumann (president of GM Europe) has done an outstanding job, and assembled a strong team. The business issues are behind us in that we’ve got a plan. What gives me confidence is that we’re now talking about the product again. The Mokka, Adam, Insignia – they all have done very well.

Forbes: Will you break even in Europe in 2015 as planned?

We said ‘mid-decade.’ I think we’re on track. Karl-Thomas is positive. That’s a business we think will be back on track and contributing. The economy will gate a bit of it. We’re seeing some positive signals. But the good thing is, whether it’s a slower recovery or a quicker recovery, we’ve got the right products there for Opel to be a substantial player. And I think we’re seeing it already.
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Forbes: The cost of GM’s safety recalls is eating up profits. Are your mid-decade financial targets at risk?

We’re focused on making sure we handle the recall appropriately, taking care of our customers, doing the right thing and then moving forward. I’m not going to start to change what the future goals are for the company because I still think there are a lot of levers we can pull and need to pull and we will pull to continue to drive the business forward.

Forbes: Let’s talk about culture. Where does culture change start? Does it bubble up from the bottom, or down from the top?

It has to be leader-led. Dan (Ammann, GM president) and Mark (Reuss, product development chief) and I have a very strong partnership and a consistency between the three of us, in how we’re conveying to employees what’s important, how we’re going to manage this, and continuing that communication so they feel confident.

Forbes: In a recent Town Hall meeting with employees, you lamented that there’s still a “culture of fear” within GM, a fear of rocking the boat. How do you convince people it’s ok to speak up?

First, it’s having programs like Speak Up For Safety. If someone picks up the phone and says, “Hey, I’m worried about x, y or z, it’s important that you answer them, either to say, ‘Wow, thank you for raising that issue,’ or ‘Hey, that’s not an issue and here’s why,’ so they don’t leave thinking, ‘I tried, and they didn’t listen to me. They just ignored me.’

It also is me demonstrating the culture and making sure the leadership (follows through). Because they can hear me, they can even believe me, but what is their daily work experience like? What is it like in their department?

We rolled out our three core values last year – the Customer is Our Compass, Relationships Matter and Individual Excellence is Crucial. We’re now getting an opportunity to accelerate the adoption of them because they’re seeing from me, from Dan, from Mark, that we mean it. It’s our continuing to be consistent./>/>

Forbes: You told Congress that GM in the past had a ‘cost culture’ that contributed to the ignition switch issue. What did you mean by that?

Think back to the 2000 time frame. Look at the work we were asking people to do as we were restructuring, and shrinking and taking costs out. There was a lot of work going on for the survival of the company to attack the cost structure.

Forbes: And how would you describe GM’s culture today?

I clearly think we have a culture focused on doing great cars, trucks and crossovers. The measure of that is the cars we’re putting on the road. It’s the same people – yes, there are some new people, but there are a lot of people who were here in that timeframe. The same people are responsible for the award winning products on the road today. It’s about giving those individuals the right tools and the ability and the power to do great vehicles. Now, we still have to make sure we have the right cost structure, but that’s done through Six Sigma training, looking at ways to improve efficiency, putting in the right processes.

Forbes: GM was messed up for quite a while. Why didn’t you leave?

Well, I’m second generation (her father worked for GM) – but for me, I had been here for 20-some years when we went into bankruptcy. I knew what this company could be and I knew how dedicated the men and women that worked here were, and how important the company was. You know, I’ve been a part of it going down. I wanted to be a part of it coming back. I felt strongly what it could be. And it became more important. It just became something I felt very passionate about: being a part of the team that led General Motors to be the company I knew it could be and that the employees work very hard every day to achieve. That’s why I get great satisfaction from seeing the cars and trucks we’re putting on the road today. They did that. We did that. Now we clearly have more things we have to work through. All I can tell you is when we find a problem, we’re going to fix it.

Forbes: I have to ask you this because people ask me: Was Mary Barra put in charge of GM at this time because they knew what was going to happen and they needed a woman to take the fall?

I do not believe that. At all. I believe this issue came up, and we learned about it, the leadership learned about it on Jan 31 and we’re dealing with it, and it just happened to be two weeks after I officially came into this job.

Forbes: You must have set the record for a CEO being called before Congress?

It’s probably not the kind of record you want to set. But you don’t get to choose the cards you’re dealt. You just have to deal with them. I really feel – obviously we want to do the right thing and serve the customer well through this; that’s a priority — but it’s also an opportunity to accelerate cultural change.

Forbes: Can you explain why, as the head of engineering, you wouldn’t know that this safety issue was bubbling through the company?

In product engineering we had over 30,000 employees. You have to count on each design release engineer and person in that organization doing their job and elevating issues as they occur and there’s a structure to do that. You have to count on that. You can’t possibly know what every individual is doing.

Forbes: Why did you decide to meet with the families of accident victims?

Because they made the request, and I put myself in their shoes and I thought they deserved to be heard.

Forbes: That must have been very hard.

It was difficult, but it’s a difficult situation they’re in…I thought they needed to know that General Motors cared, and that we listened./>/>

 
 

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