When we sat down with Mary Barra recently, it was Volkswagen’s diesel emissions-rigging scandal that was consuming the automotive world. Barra is no stranger to dealing with reputation-destroying misconduct. Less than two months after she became CEO, GM had one of the worst crises in its history, forced to recall more than a million cars for ignition switches that could cause cars to shut off in motion, preventing airbags from properly deploying in a crash. For Barra, a GM-lifer, it was an instant test of leadership. I asked her about that, VW’s woes, being the first female auto industry CEO, and about the fast-changing auto industry at a time when focus is shifting to Silicon Valley’s efforts to build cars. She’s confident Detroit — and GM — can innovate just like Google and Tesla.
Matthew DeBord: The industry is enduring another gigantic recall issue with the VW situation. It looks pretty severe for VW. How do you prevent something like this from happening again at GM?
Mary Barra: I can’t speak to the VW issue, but when I look at what we did when we dealt with the ignition switch, I think that first of all we demonstrated that we lived our values. We’re going to do the right thing, even when it’s hard. We’re going to be transparent. We’re going to do everything in our power to make sure this never happens again. And we’ve taken very definitive steps. We’ve redesigned the way that we develop and engineer vehicles. But probably the most important thing is the expectations we’ve laid out for the team and who we want to be and how we want to be defined. And we continue to reinforce that with our employees, because we never want to forget what happened. We want to have that in our minds. That’s the best motivator.
DeBord: Five or ten years ago, Uber didn’t exist, Tesla was just a dream, that we were between GM’s decision to end the innovative EV1 electric-vehicle program and some of the newer electric startups and electric vehicles. Could you have anticipated that you would be grappling with these issues when you got to sit in the big chair?
I don’t know if ten years ago anybody could predict where were are now, but what we do know is technology is moving at an accelerated rate. It’s beyond this industry, it’s in every industry. I was just at a forum with a number of CEOs from other industries, and [we discussed how] technology is becoming a part of every single industry. I see it as an opportunity. How do we seize that opportunity and improve our position, build on our strengths? So when you look at what’s disrupting the market right now — something like connectivity — we want to look at our position as it relates to connectivity. When you look at electrification, we need how to learn how to take the costs down.
DeBord: It’s not like you are new to this game. The EV1 was a vehicle that GM pioneered. Now you’re there with Volt and you’ve got Bolt. However, if you look across the overall industry, electrification has not really panned out. Meanwhile, Tesla has pulled the cover off a pretty innovative new vehicle, the Model X. They have got plans to roll out a mass market vehicle in a couple of years. It seems to me like you’ve accelerated Bolt development in a serious way at this point. Is that fair to say?
Barra: I think we’re committed to electrification. We see it as a solution. And so, yes, we’ll be able to put the Chevrolet Bolt in the marketplace next year. That’s a significant statement that we’re making about our commitment to electrification.
DeBord: But what about Tesla’s acceleration at this point? They want to put their mass market vehicle, the Model 3, into the market in 2017. Is there anything going on there where you’re thinking, you know, we can get there before they get there, because we’re GM and we have scale and we can just flip the switch and do it?
Barra: I don’t know if it’s just “flip the switch and do it,” but I think we’ve had, to your point, a long-term commitment to electrification, whether it be the EV1 or the Volt. When you look at the Chevrolet Volt those customers are some of the most satisfied across the industry. We continue to work with our partners, with [battery supplier] LG being a very important one, and we saw the breakthrough opportunity to get to 200 miles with the Bolt. So we wanted to put it in the marketplace as quickly as we could. Electrification as an option for the masses, not just at the top end.
What role do new technologies like Apple CarPlay and Google’s Android Auto play in your thinking about the future of the company and how you’re going to be competing and winning?
Barra: It’s already transitioning. We need to be able to understand the importance of connectivity and bring that into the car in an appropriate way. We’re building the foundation for a whole lot of services and apps and value-adds for the customer that we haven’t even completely thought of yet, whether it’s just providing you access to your contacts, your music, your schedule, improving the way we do navigation, there’s a lot we can do to build on a platform. So we’re really working to create the relationship with the customer. If you get into a vehicle then it goes, “Oh, I know, this is Matt, this is what Matt likes, so therefore I’m going to set the car up that way,” that’s real value, because I think in addition to dollars time is another currency that we’re all short of. But we’re just scratching the surface.
DeBord: How about the mysterious Apple Car?
Barra: I don’t know anything more than what we all read in the paper.
DeBord: What about self-driving cars?
Barra: There are two paths. There’s an incremental evolution, where if you drive a top end Cadillac right now, you can experience how the vehicle can avoid a collision and [monitor its surroundings]. Those are all steps on the journey to autonomous. We’ll go into technologies that assist the driver, but we also believe there’s a path to get to fully autonomous vehicles. We’re working on both.
DeBord: Silicon Valley has a very advanced dream of the future as far as the automobile is concerned. They might look at the traditional auto industry and say, “GM talks a good game, Ford talks a good game, but we’re so far out in front of those guys it’s not even funny.” But I look at the vehicles that are on the road today and some of them practically drive themselves already. So do you think GM is going to be able to deliver a very nearly self-driving experience to the consumer long before some of the major disruptors are able to get there with a completely different idea about how we get around?
Barra: The key with autonomous is the whole ecosystem. One of the keys to having truly fully autonomous is vehicles talking to each other. There’s a technology path, but there’s also an ecosystem path, [which means] you need to work with infrastructure, you need to work with municipalities or governments.
“I’m here because 20 years ago at General Motors people valued diversity”
DeBord: From the outside, your getting the CEO job was seen as remarkable — a women getting to the top of the “car guy” world. But was that a misinterpretation of the industry, where a lot of women have been very successful? Everybody thinks it’s car guys, left and right. Macho stuff. Do you think that’s wrong? My experience is I see a lot of guys, but I see a lot of women, too, in the business.
Barra: I think you’ve captured it perfectly. To me the biggest learning was what people outside the industry thought of the industry. Because I grew up in this industry where I’ve been given all these opportunities and chances. So I think it’s exactly it, that there’s a dated view of the auto industry. And I think my role, hopefully, has challenged that.
DeBord: You’ve spoken with Sheryl Sandberg of Facebook about the way that she leads. We often look at female leadership styles in Silicon Valley in terms of two major leaders — Sheryl Sandberg at Facebook and Marissa Mayer at Yahoo. Sandberg likes to talk about how women need to get in there and stress their leadership qualities and lean in. Mayer doesn’t necessarily push that hard but she leads in her own way, hires a lot more female people at Yahoo than is the norm in the Silicon Valley environment. How do you approach your leadership style as a woman?
“I think there’s going to be more change in the next five to ten years than there’s been in the last 50”
Barra: I’m here because 20 years ago at General Motors people valued diversity, and I was given stretch opportunities or put into roles where I had the opportunity to demonstrate myself. So I’ve been in an environment like that for quite some time. And when you look at all the other women leaders in General Motors — whether it’s Victoria McInnes, [our auditor], or Cathy Clegg who runs North America manufacturing as well as labour, or Tina Müller who runs Opel marketing… I mean I could go on and name all the women that are in very significant positions. And that’s not something I did, that’s something leaders before me did.
DeBord: Have you learned anything specific from Silicon Valley leaders?
Barra: One of the key things that I’ve learned from Sheryl Sandberg is addressing your biases. When you want to hire someone to get the job done you generally have confidence in yourself, so if you pick someone like you you’re going to have more confidence in them. But that’s not what you should do all the time. You should pick people not like you to create that diversity, which will be across gender and across cultures and across different experiences. Spending time with Sheryl and understanding her point has caused me to look even deeper into what it means.
DeBord: Not because you’re a woman but just because of your long background with GM, are you better positioned to understand the transformation and the disruption that’s going on now?
Barra: I can’t take credit for that alone. Our leadership team has challenged ourselves, spent time in Silicon Valley, and said that if our stated strategy is truly focused on earning customers for life, how do we earn customers for life and leverage technology, leverage our scale, leverage the unique assets General Motors has? One of the other things you learn from Silicon Valley, or any startup, is you try something and if it works, you scale. If it doesn’t, then you tweak it or throw it out and start again.
DeBord: You often talk about your kids and you’ve been married for quite a while. How do you manage your personal life while running a gigantic global car company?
Barra: There’s certain things in our children’s lives that are very important, and they’re non-negotiable. A woman leader at GM taught me something 20 years ago. She said, “Would you leave a meeting that ended at 1 to get to the next one if you had that schedule? Would you have any apprehension about going ‘Hey, guys, I need to leave this meeting because I’ve got another meeting’?” I said no. So she said, “Well, why don’t you do it at five o’clock, because isn’t that next commitment you’ve made just as important?” That has always stuck with me.
It’s a marathon, not a sprint. I actually feel like I come to work stronger when I’ve had a little time on the weekend, to step away from it and enjoy my family and other things. I come back energised. If people think they’re going to work 24/7, week in and week out, they’re not bringing their full strength to the table.
DeBord: Let’s discuss the general attitude that Wall Street has toward the company, post IPO. Do you feel that GM is undervalued? Do you feel that Wall Street is correctly assessing the company’s prospects?
I think one of the things we’re trying to accomplish is to really help people understand our strategy. I’m on record as saying I think there’s going to be more change in the next five to ten years than there’s been in the last 50 — and we’re going to talk a lot about what’s disrupting the industry, how we’re disrupting ourselves. The most important thing that we can do is hit our financial targets. We accomplished that in 2014, we’re on track to do that in 2015, and we’ve set goals for ourselves in 2016. [We’re aiming for] 10% profitability in North America, to break even in Europe, and to maintain strong margins in China, even though the market has become more volatile.
DeBord: You famously said at one point you’re not going to build any more crappy cars at GM. How are you going to execute on those goals?
Barra: It starts with the core business, and it starts with having the right product portfolio that’s customer driven, that has the right safety, the right fuel efficiency, the right performance. With every car we’re going to put into the market, we want to lead the segment, win the segment. We also want to grow GM Financial, which not only is good from a business perspective but we also strongly believe it facilitates the core business of selling more cars and trucks. We also believe that there’s growth in China over the next 10 to 15 years, going from the 24-million mark [for new vehicles sold annually] to 34 or 35 million.
DeBord: Do you think GM really has its act together globally and that gives you a strong competitive advantage relative to the competition — to be able to win rather than just compete?
Barra: I would agree with you that I think we’ve taken important steps across the globe to look at places and ask, “Can we be profitable? Can we win in the marketplace and win for the shareholder?” And if we can’t, we’re not going to stay in that market or we’re going to change our business model.
DeBord: If you had talked to somebody on Wall Street maybe four years ago, before you became CEO, and had said, “You know, we really think the pickup truck and the SUV market’s going [to come] roaring back. We feel very strongly about that. Americans like trucks,” the Wall Streeter might have said, “What are you talking about? No-one’s ever going to buy an SUV again, nobody’s ever going to buy a big pickup truck again. They want little cars.”
Barra: When you look at the truck market in North America, you have to understand the customer, and that’s one of the things I think General Motors does really well. There’s a big population that buys our trucks. It’s their life — or it’s their livelihood. Not their lifestyle, their livelihood. It’s a work truck. And so they’re not going to be able to necessarily switch to a small car for what they do.
DeBord: You went to business school at Stanford, so I assume you have some insight into the Silicon Valley mindset. And you talk a lot about transforming the culture at GM to make it more entrepreneurial, to be about being enchanted with art of the possible. Do you have a unique point of view into that world?
Barra: I don’t know if I have a unique point of view, but just this past summer we took the whole senior leadership team to Silicon Valley, met with a lot of tech companies, both big and small, and spent time on their campuses. We sent teams to the Stanford d.School Boot Camp. We’ve got training programs that we’ve partnered with Stanford to create, to make sure we’re infusing that can-do attitude, encouraging the art of the possible
DeBord: What about working in Detroit versus working in the Bay Area?
Barra: Look at what Detroit has to offer. We are drawing a ton of Millennials to this area because they want to be part of creating something. They can afford to be here, and they can afford to start their own business here. So if you look in the core of the city, there are actually wait lists to get into some of the housing and the loft space that’s been created. So I feel we can start to attract the best and the brightest here. Clearly if they have an interest in the auto industry, we get them. But what we’re trying to do is find talent across the globe and leverage that.
DeBord: Old GM was ended by bankruptcy and bailout. That was the opportunity for old GM to be replaced by new GM. New GM is being transformed by you and it has been transformed by the ignition switch recall. Do you think that the world we’re in now is really a new GM world, or are there aspects of old GM that you’re still dealing with?
Barra: Having been here for over 35 years, I guess I don’t look at it that way. There was a lot of culture change that was driven in the past by leaders who came before me. If you’re truly focused on the customer, that’s what is going to lead to success, not just in the near term but in the long term. But I can’t tell you what technology is going to exist in five years. All I can say is that if we sit here again five years from today, it will be something that’s dramatically impacted the industry that we can’t even name right now.
DeBord: I hope that’s a date!
Barra: We’re going to disrupt ourselves, and we are disrupting ourselves, so we’re not trying to preserve a model of yesterday. And when you think of the assets the company has — the scale, the control of the vehicle platform, the ability with embedded connectivity, the knowledge we have of just every aspect of the vehicle and how we’re putting it together now — I think there’s a lot of plus signs, and we can lead.