John Dingell and General Motors CEO Mary Barra at the North American International Auto Show in Detroit on Thursday. (David Coates/The Detroit News) )
It’s Mary’s team now.
Her mentor, retired Chairman Dan Akerson, this week is leaving behind a General Motors Co. free of U.S. government ownership and the restrictions that go with it. There’s a reinstated dividend, $37.3 billion in cash and credit lines, product momentum, a strategic revision under way in Asia, and a European turnaround beginning to gain traction after 15 years of spinning its proverbial wheels.
Nowhere will it be more important for new CEO Mary Barra to call the right plays early on than in Germany, where the retirement of Akerson and the looming departure of Vice Chairman Steven Girsky will be keenly felt because they produced something in Rüsselsheim their predecessors could not: credibility.
Akerson and Girsky didn’t just make decisions. They committed to invest nearly $5 billion; negotiated a responsible closing of GM’s plant in Bochum, never an easy undertaking in Germany; brought GM directors to Adam Opel AG for the first time in 25 years; wooed a new CEO to Opel from rival Volkswagen AG, and rebuilt the management team.
They detailed three key GM executives — including Barra and then-CFO Dan Ammann — to Opel’s governing supervisory board. They mustered the discipline to sell their position in PSA Peugeot once it become clear the stake would likely prove more trouble than it’s worth. They stopped a 14-year market share slide in 2013.
They moved to pull Chevrolet from Europe to focus GM’s line-up, distribution and marketing on Opel and Vauxhall, its twin sister sold in the United Kingdom. And Girsky used the same no-nonsense style he developed managing relationships within the United Auto Workers to earn the trust of key union leaders in Germany.
Among his gestures: lifting high a Golden Steering Wheel award and thanking the employees — in public and in German — for earning it. After years of strategic shifts, a revolving door in the Opel executive suite and recurring attention deficit disorder in Detroit, it’s hard to overstate the recuperative power of their collective actions.
The challenge for Barra? Don’t squander the progress, the first meaningful steps forward for GM’s operations across Europe since the heady days of the 1990s. Heed the lesson that doing what you say, demanding accountability and respecting the locals through actions, not just words, can pay enormous dividends over time.
Akerson and Girsky “delivered on what they promised — the German plan,” a ranking company source said during the North American International Auto Show. “It will need hard work from new management to fill the void that will undeniably be there in the mind of Opel.”
Girsky, especially, began to exemplify a new ethos that practiced respect instead of a dismissiveness bordering on indifference. He and Akerson fought to keep Opel because of its strategic value instead of sell it to a Russo-Canadian consortium. They underscored its importance with product, investment and jawboning on Wall Street.
GM’s European operations are one of the most prominent open questions Akerson is bequeathing to Barra. This week, he touted the end of a 14-year market share slide; this year is expected to mark a transition (read: tougher numbers) as GM pays the bills for the Bochum closing and the Chevy pullout.
Lots of people who matter will be watching, starting with the Germans and GM employees across Europe ready for steady leadership committed to execution. No doubt, Barra’s personal style will be a marked difference from the plain-spoken Akerson and the gruff Girsky.
Her bias to be a “uniter, not a scatterer,” as one colleague described her this week at the auto show, should help maintain a building momentum in Germany that will prove critical to delivering the promise of break-even results by mid-decade (only a year away).
Preliminary signs are encouraging, but one-time expenses this year and the likelihood of a leveling sales gains from the past few years could make for some tough quarters to come. The art will not just be managing expectations on Wall Street, now relatively inured to GM’s endless European saga.
It will be demonstrating that playing as a team, a riff Barra already has appropriated from the departed Akerson, is a game that truly includes the people doing GM’s work in the heart of the European car business.
Daniel Howes’ column runs Tuesdays, Thursdays and Friday.