General Motors CEO Mary Barra at the New York Stock Exchange on November 17, 2022.
Source: New York Stock Exchange
DETROIT — Monday marks Mary Barra’s 10th anniversary as CEO General Motorsushering in a pivotal year for the Detroit automaker and its legacy.
Barra has been a dynamic executive over the past decade, leading the company through high-profile crises as the first female leader of a major automaker. Under her leadership, GM has delivered record profits, cultural changes and major accomplishments, including beating Wall Street profit expectations in 34 of the last 35 quarters, according to FactSet.
She is regularly ranked as one of the most powerful business leaders in the world, with former and current executives describing her as a “visionary” and “inclusive” leader who remains focused on the task at hand.
For much of Barra’s time at GM, that mission has been to push the envelope and transform America’s largest automaker for sustained success. But her latest major business plan failed to meet internal or external expectations, including her own.
Initiatives involving electric and self-driving vehicles are under pressure, with EV launches and demand falling short of expectations, plunging General Motors Holdings’ Cruise into crisis. The electric and autonomous vehicle business and emerging software initiatives are key components of ambitious financial targets for 2025 and 2030.
GM said it can still achieve its goals, which include doubling revenue by 2030, by shifting focus, but has not yet detailed how it will achieve that goal without the help of its established growth drivers.
Stocks held during General Motors CEO Mary Barra’s 10-year tenure.
“I’ve always thought the electric and autonomous vehicle strategy was very ambitious and more about showing Wall Street that they were becoming a ‘tech company’ rather than a car company trying to over-imitate Tesla in a lot of ways.” Cox An executive analyst at Automotive, he covered General Motors as a reporter starting in the 1980s.
There has been little public criticism of Barra, but Wall Street and investors are making their voices heard through the company’s stock price.
Berkshire Hathaway, owned by the famous investor Buffett, acquired a major stake in General Motors in 2012, but sold all its shares in the company in the third quarter of 2023 without any explanation.
GM shares closed at $35.26 a share on Friday, down 10.5% during Barra’s tenure and nearly 50% from a high of more than $67 on January 5, 2022.
Unplugged?
In recent years, General Motors has appeared to be a leader in challenging U.S. leadership Tesla Entering the EV space with its new EV architecture and billions of dollars of investment.
In 2021, Barra surprised many by announcing that General Motors would stop producing traditional internal combustion engine vehicles by 2035 and exclusively offer electric vehicles to consumers. At the time, GM pledged to transform the company and the auto industry through what Barra called “visionary investments,” including $35 billion in electric and autonomous vehicles by 2025.
She touted GM’s growth opportunities, including its next-generation “Ultium” electric vehicle architecture, as many other major automakers followed suit and announced similar electrification goals.
But due to production difficulties, General Motors has launched its next-generation electric vehicle models at a snail’s pace. Sales of its latest model, the Chevrolet Blazer EV, have been suspended due to serious software problems.
General Motors’ electric vehicle sales last year totaled 75,883 vehicles, accounting for 2.9% of the company’s total sales. It ranks third in electric vehicle sales, behind Tesla. Hyundai MotorThat includes Kia, according to Cox Automotive. However, the vast majority of GM’s electric vehicle sales come from the now-discontinued Chevrolet Bolt model.
Widespread consumer demand for electric vehicles has not materialized as GM or other companies had hoped, and many automakers have withdrawn or abandoned EV ambitions they set years ago.
General Motors Chairman and CEO Mary Barra speaks during the unveiling of the Cadillac Celestiq electric sedan on October 17, 2022 in Los Angeles.
Frederic J. Brown | Frederic J. Brown AFP | Getty Images
Barra said in December that while there is still a path to exclusively offering electric vehicles by 2035, customer demand will ultimately determine the pace of the company’s electric vehicle transition.
“We still have a plan for us to be fully producing light vehicles by 2035. But again… we’re going to adjust based on where our customers are and what their needs are,” she said. “But I do believe that this shift will happen over a period of time.”
As early as 2017, General Motors’ electric vehicle focus was to bring as many electric vehicles to the market as possible, and it promised to launch at least 20 new all-electric and hydrogen fuel cell vehicles globally by 2023. Then, in November 2020, the goals shifted, with the automaker saying it would launch at least 30 new electric vehicles by 2025 and spend $27 billion (later increased to $35 billion) on electric and autonomous vehicles ).
GM has not released specific details about the spending, but executives confirmed last year that the automaker was delaying or cutting back billions of dollars in electric vehicle spending.
In October, General Motors canceled its near-term electric vehicle goals, which included selling 400,000 electric vehicles in North America from 2022 to mid-2024 and producing 100,000 electric vehicles in North America in the second half of 2023.
detroit automakers and honda cars General Motors also canceled plans to jointly develop an affordable electric car, a project that would have cost $5 billion, and GM chose to relaunch the canceled Chevrolet Bolt as a new model in 2025.
GM insists it will reduce profit margins on electric vehicles and increase North American electric vehicle production capacity to 1 million units by 2025. The automaker expects the transformation to maintain adjusted profit margins in North America at 8% to 10%.
Take the wheel
If electric vehicles have been struggling to grab consumers’ attention, self-driving cars and General Motors’ Cruise unit have been dominating it — but not for the reasons Barra hoped.
Late last year, Cruise was transformed almost overnight from one of GM’s biggest business opportunities It becomes a growing liability.
General Motors holds more than 80% of Cruise’s shares, and Barra serves as chairman. An accident on October 2 in which a pedestrian in San Francisco was dragged 20 feet by one of the company’s self-driving cars triggered a series of questions and investigations. The man was hit by another vehicle.
GM said Friday that an investigation into the incident is ongoing.
Cruise’s fleet of robotaxis has been grounded since the incident, pending the outcome of an independent safety investigation. Local and federal governments have launched their own investigations. Cruise’s leadership has been devastated: its co-founder resigned and nine other leaders were ousted. The company also laid off 24% of its employees.
In addition, General Motors has also slashed business spending and growth plans, including suspending production of new robotaxis.
General Motors Chairman and CEO Mary Barra during an Automotive Press Association event in Detroit on December 4, 2023.
Jeff Kowalski | Bloomberg | Getty Images
Barra told the Automotive Press Association conference in Detroit in December that GM was “very focused on turning things around” on Cruise.
Cruise is considered one of the leaders in autonomous vehicles letter– Backed Waymo, outlasting many other companies that have abandoned the field.
Cruise’s confusion also raises questions about GM’s own plans to offer personally self-driving cars as early as mid-decade, as well as Ultra Cruise, the company’s next-generation driver-assistance system.
The Ultra Cruise system was originally planned to debut in 2023 and eventually be able to drive autonomously in 95% of scenarios, but progress is unclear.
The automaker is ending its Ultra Cruise program, two sources familiar with the system told CNBC. One source said GM has decided to focus on the current Super Cruise system and expand its capabilities, rather than having two different, similarly named systems.
Darryll Harrison Jr., GM’s vice president of global technology communications, declined to comment on the specifics of Ultra Cruise, but said: “GM will continue to expand our advanced driver assistance technology, Super Cruise. the scope of its use and improve its capabilities. Our focus remains on safely deploying this technology across GM brands and additional vehicle categories while expanding to more roadways.”
transformative legacy
Barra took over as CEO of GM in January 2014, when the company was still emerging from government ownership following a 2009 bankruptcy and decades of mismanagement. She was hired to deal with the ghosts of GM’s past and steer the automaker toward a cleaner future.
“I think Mary was one of the few people on the original team who understood that this thing was broken,” Barra’s predecessor, Dan Akerson, told CNBC in 2022.
General Motors Chairman and CEO Dan Ackerson (left) announced his resignation during a town hall meeting on December 10, 2013 at GM’s Renaissance Center world headquarters in Detroit. Dan Ammann is the new president; Mark Reuss is the new executive vice president of global product development, procurement and supply chain.
Photo by Steve Fecht for General Motors
Barra, who has served as CEO and chairman since 2016, has a philosophy of tackling problems head-on. She often said “The best time to solve a problem is the moment you know it’s a problem.”
That philosophy has served her and GM well so far, as Barra navigates a seemingly endless series of crises over the past decade, the first in her tenure in the company’s 115-year history. The second-largest CEO, second only to its founder.
Barra recalled about 30 million vehicles starting in 2014 after an ignition switch defect killed 120 people and led to a sweeping reorganization of GM’s safety operations.
“She took the approach of recalling the ignition switch and used it to really bring about some profound change in the organization — she changed some things,” said Stephanie Brinley, associate director of liquidity research at S&P Global. “I think they have played a role. It worked.”
Barra led the company through the 2014 parts crisis and initiated multiple corporate restructurings around the world, including exiting many unprofitable markets. This fat loss is in response to anticipated disruptions in industries such as mobility or technology. Lyft, Uber, apple and Google.
And she fended off two activist shareholder campaigns, including one by David Einhorn’s Greenlight Capital, which pushed for a seat on GM’s board , and initiated a split of GM’s common stock into two classes to help boost its stock price.
Einhorn declined to comment through a spokesman on Barra or GM’s efforts, which it exited in 2020.
General Motors CEO Mary Barra testifies during a House Energy and Commerce Committee hearing on Capitol Hill in Washington on April 1, 2014.
Getty Images
The recent challenges GM has faced — cruising, uncertainty about electric vehicles, shifting priorities — play to Barra’s strengths. She has a keen eye for crisis and is quick to eliminate when needed.
“She’s a good leader and a good listener,” said Gary Cowger, a former GM executive. “But she’s also tough when it comes to making tough decisions for shareholders. So far. So far, from what I’ve seen, she’s done an excellent job,” Barra, whose mentor passed away last year, previously told CNBC.
But as headwinds mount and some on Wall Street lose confidence, 2024 could be either the icing on the cake for Barra’s career or an unexpected downturn in her track record.
“The transition to electric vehicles and autonomous driving is not that simple,” Brinley said. “It’s going to be a struggle for a while, and its success or failure may not be truly known until after her term is over.”
When asked in December about her tenure and legacy, Barra, 62, said she wasn’t thinking too much about it. She was more focused on what was at hand.
“I’m an engineer, a problem solver, let’s keep moving forward,” she said. “I am honored and it is an honor to lead General Motors at this time. We are in the midst of a once-in-a-generation transformation and there is much that can be done.”
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