GM’s Incoming CEO Barra Faces Detroit Car-Show Swarm – Bloomberg

Posted: Wednesday, January 15, 2014

Visitors to this week’s Detroit auto show could be forgiven for thinking they had stumbled into a Mary Barra welcome parade.

Barra, a 52-year-old General Motors Co. (GM) lifer who takes over tomorrow as the company’s chief executive officer, unveiled the GMC Canyon truck at Jan. 12’s pre-show festivities and was engulfed by dozens of shoving and craning reporters. She was swarmed again the next morning when the North American Car and Truck of the Year awards went to a pair of Chevrolets released on Barra’s watch as product-development chief.

The first female CEO of a global automaker, Barra will take the helm of a company in its best fighting position in a generation. Her challenge will be to expand GM as rivals counter with similarly competitive lineups and industry growth is projected to slow.

“The expectations are high — probably unreasonably high – – for her,” Michelle Krebs, an independent analyst who has been in the auto industry for more than 30 years, said yesterday on the show floor near GM’s Cadillac display.

Chevy’s first-ever sweep in the show’s car and truck awards — which went yesterday to its Corvette Stingray sports car and Silverado pickup — was an endorsement of the car chops Barra showed as the global product chief under CEO Dan Akerson, who is retiring to care for his ailing wife.

Photographer: Paul Sancya/AP Photo

Incoming General Motors CEO Mary Barra watches the North American Truck of the Year and… Read More

Incoming General Motors CEO Mary Barra watches the North American Truck of the Year and Car of the Year awards at the North American International Auto Show in Detroit on Jan. 13, 2014. Close


Photographer: Paul Sancya/AP Photo

Incoming General Motors CEO Mary Barra watches the North American Truck of the Year and Car of the Year awards at the North American International Auto Show in Detroit on Jan. 13, 2014.

GM’s Challenges

The show also provided instant proof of the challenges GM will face under its new leader. Ford Motor Co. (FORD) yesterday unveiled its aluminum-sided F-Series pickup, with improved fuel economy to challenge the award-winning Silverado. While the Corvette added a more muscular brother with the ZO6, also revealed yesterday, it faces new challenges from a redesigned Ford Mustang and Porsche 911 Targa.

There’s also pressure on GM’s Cadillac brand from a redesigned Mercedes C-Class and new BMWs. Toyota Motor Corp. (7203) showed a new concept vehicle yesterday that the company said drew from its past sports cars including the Supra.

The Detroit Three, after slashing costs and turning out some of their best vehicles in a generation, came within about one-20th of a percentage point last year of posting market share gains in the same year for the first time since 1988, according to data compiled by Bloomberg.

While Ford has effectively slimmed down globally, GM has further to go in cutting costs, said Xavier Mosquet, co-leader of the Boston Consulting Group’s automotive practice and a Detroit-based senior partner.

“The transition of GM is not over yet. This is the first generation of trying to leverage GM globally to be a more efficient company,” said Mosquet. “If it continues — if Mary Barra is able to marshal that energy — it will be one of the world leaders in five years.”

Revamped Products

Optimism for GM has been building, with shares rising 42 percent last year, as the U.S. Treasury sold its remaining ownership stake from the bankruptcy reorganization and as new products began arriving in showrooms. Working to transform a lineup that was one of the industry’s oldest, GM brought out 18 new or refreshed products last year and plans 14 more this year. As product chief, Barra oversaw the final stages for those vehicles.

“My hope is that as we continue to get more of these award-winning products out into the marketplace that we’ll get attention and continue to win customers,” Barra told reporters after winning the car and truck honors.

She made those comments after a crowd had surrounded her as she made her way across the Detroit auto show convention center’s atrium, up a flight of steps and through a hall. Security guards screened her from the crush. Videographers and reporters tripped over each other in the scrum.

Role Model

Over two days, she fielded questions about her plans for GM and her thoughts on being a role model for young women.

“It’s really an honor,” she said of being the first female CEO of a global automaker. “If I can motivate young women and young men to pursue a career in science” and technology area “that would be a huge win.”

As for her future plans, she praised her team and promised to keep up the momentum. “Our focus is still: design, build and sell the world’s best vehicles, continue to build strong brands.”

GM has been helped by a U.S. auto industry that saw its best sales year since 2007, with industrywide deliveries increasing 7.6 percent to 15.6 million.

Slowing Growth

Growth may level off this year. Deliveries of new cars and light trucks may rise to 16.1 million in 2014, the average estimate of 13 analysts in a survey by Bloomberg News in September. That compares with 16.15 million sold in 2007.

“That just means the competition will be hotter, more intense. We’re liable to see more incentivizing, more discounting,” said Jack Nerad, a Kelley Blue Book analyst. There will be “big-time pressures on all of the CEOs, not just Mary.”

Shortly after GM won its truck award, Ford revealed its redesigned F-150 pickup to journalists. The truck, which goes on sale later this year, uses military-grade aluminum alloy throughout its body to shed as much as 700 pounds. That promises to give it better fuel economy than the Silverado. The 2014 Silverado with a 5.3-liter V-8 engine and two-wheel drive gets 23 miles (37 kilometers) per gallon in highway driving.

Alan Mulally, Ford’s CEO, declined to say whether the new F-150 would achieve a milestone of 30 miles per gallon.

“We’re looking forward to sharing with you what the number is later,” Mulally said. “We’re clearly going to have the best fuel economy ever, that we’ve ever had on the F-Series.”

F-Series Lead

Mullaly said he was eager to work with Barra on joint initiatives and congratulated her and GM for winning the car and truck of the year awards. He added that the F-Series extended its lead last year in the full-size truck segment.

GM also faces new threats from Volkswagen AG, which seeks to become the best-selling automaker in the world by 2018. It unseated GM in China last year as the top-selling foreign automaker, a position the U.S. automaker had held for eight years.

In Detroit, the German automaker announced plans to spend more than $7 billion during the next five years in North America to redouble efforts to boost sales of its VW and Audi brands to 1 million vehicles by 2018 in the U.S. from last year’s 565,000. Part of those plans include introducing a mid-size sport-utility vehicle designed for the region.

Cadillac Sales

GM today will show a two-door version of its Cadillac ATS as the automaker works to boost its luxury-brand sales. The ATS sedan helped Cadillac increase its car sales 48 percent last year.

Daimler AG’s Mercedes-Benz, meanwhile, revealed a redesigned C-Class loaded with gadgetry to help the brand battle BMW and Audi to become the top-selling luxury brand around the world, from its current third-place spot.

“When you look around the show, GM has a very competitive lineup,” said Dave Sullivan, an analyst with AutoPacific Inc. “They were at rock bottom. They’ve now recovered. They have a very fresh lineup. Now they need to go to the next step — they’ve got to come up to the ‘Wow’ level.”

GM executives acknowledge the pressure is building for them to deliver. Market-share increases aren’t instantaneous, said Mark Reuss, who replaces Barra as head of product development from his role as president of North America operations.

“We’ve got a lot of baggage. We haven’t been producing fundamental excellence in our products for two or three cycles yet — we’re into one. Don’t underestimate what people thought of us or what they thought of these brands through these hardships,” he told reporters yesterday. “My message to my team is that we’ve got to celebrate on the run and put our focus right into launching, launching, launching.”

To contact the reporter on this story: Tim Higgins in Detroit at

To contact the editor responsible for this story: Jamie Butters at


Write a Reply or Comment:

Your email address will not be published.*