With Mary Barra appointment, GM joins Yahoo, IBM, Xerox with a woman in charge

December 10, 2013

FILE: Mary Barra, who was named General Motors CEO on Tuesday. EPA/LARRY W SMITH

 

As of today, when General Motors announced that Mary Barra would become CEO in January, a woman is for the first time in U.S. history in the driver’s seat of a major U.S. car company. This is really good news for a lot of reasons.

For one thing, Barra’s talents have long been recognized. The 51-year-old businesswoman has worked for General Motors since joining the now-defunct Pontiac division in 1980 with her electrical engineering and management degree from General Motors Institute. By 2011, she had worked her way up to executive vice president with responsibility for GM’s global product development, purchasing and supply chain. In this position, she’s made some of GM’s most important product decisions as it has struggled to retake the number one position in global automobile sales and manufacturing from Toyota.

Barra was put in charge of human resources after the U.S. government rescued the company in the depths of the great recession in 2009. In that position, Barra had to shed employees and trim benefits as part of the government’s rescue package. On Monday, the U.S. government sold the last of its $49.5 billion investment in the company that had become known as “Government Motors.” GM filed for bankruptcy protection as part of the government’s deal, but became a public company once again in 2010.

Barra’s technical background should please those who worry that the U.S. isn’t producing enough female graduates in science, technology, engineering and math (STEM). Barra holds a bachelor’s degree in electrical engineering and earned an MBA from Stanford University, which she attended thanks to a grant from General Motors. Forbes named Barra the 35th most powerful executive in its most recent ranking. In many ways, General Motors was her destiny. She grew up not far from the company’s Detroit headquarters and her father was a career die maker at G.M. Barr also hasn’t had to sacrifice her career to raise a family. She’s risen to the top while raising two children.

Most importantly, putting Barra at the top adds another industry to the growing list of those where women have broken the glass ceiling and are making the decisions that can make or break a company. The technology sector has Marissa Mayer, the 38-year-old former Google executive, who took over at Yahoo last year. One analyst wondered whether she’s “superhuman.” Since becoming CEO, Mayer has taken a number of bold steps, ranging from purchasing the social media company tumblr and restyling Yahoo mail to cancelling the telecommuting option for all employees. Meanwhile, Yahoo’s shares have risen 125 percent since she took over in July 2012, which is significantly better than Google’s 77 percent gain over that period. Fortune magazine recently awarded her an unprecedented “triple crown:” she’s the only executive the magazine has named a business person of the year, one of the most powerful women, and one of its 40 people under 40 years old to watch.

Women have led companies in business machines, consumer beverages, and defense for years. Ursula M. Burns is in her fifth year as head of Xerox while Virginia M. Rometty has led IBM since 2012. Both women have spent their careers at their respective companies and both earned engineering degrees. EBay pioneer Meg Whitman has been CEO of Hewlett Packard since 2011, while Indra K. Nooyi has headed PepsiCo since 2006 and Marillyn Hewson became CEO of the defense company Lockheed Martin earlier this year. Sara Blakely and Tory Burch are self-made billionaires who have launched empires in the fashion world. Of course, there’s Oprah Winfrey, another self-made billionaire, who stands unparalleled in the breadth of her success in media, fashion, and publishing.

There’s another thing that makes Barra stand out. Her management style is likely to be very different from that of all the men who have led the company since William Durant founded General Motors in September 1908.

One of her predecessors is the now-retired executive Bob Lutz, who ran GM’s design division for year. As noted in a recent profile, “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.”

As more and more research shows that companies that are led by women tend to do better financially than those with fewer women in charge, it’s a good sign for America’s number one automaker that they’ve put Mary Barra in charge. With this appointment, General Motors may once again become the world’s number one car and truck seller.

Joann Weiner teaches economics at George Washington University. She has written for Bloomberg, Politics Daily, and Tax Analysts and worked as an economist at the U.S. Treasury Department. Follow her on Twitter @DCEcon.
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