A decade after the financial crisis, General Motors is led by the best management team it’s ever had. CEO Mary Barra, president Dan Ammann, and executive vice-president Mark Reuss have overseen the birth of a New GM that’s moving aggressively to define the future of transportation.
GM has made it through two world wars, drastic shifts in the global economy, the Great Depression, the Great Recession, and shortly after devastating product recall placed the company on the verge of Bankruptcy.
The turnaround has been impressive, as GM has racked up billions of profits and is preparing to launch 20 new electrified vehicles by 2023. Before its 2009 bankruptcy, GM was organised for conflict…it was a fragile, if enormous, group of people who had to work together to survive and prosper.
Surviving the GFC and a $2b shortfall
“The ignition-switch recall permanently changed me,” CEO Barra says. “It was a tragic situation, and if I could roll back the clock, I would. But it made me impatient. When’s the best time to solve a problem? The minute you know you have it.”
Getting GM up and running after bankruptcy was serious business. While the banking crisis that had triggered the Great Recession had largely been resolved in 2010, the US auto industry was reeling. Externally, it was unclear the car business would recover. But Barra, Ammann, and Reuss weren’t panicking.
“Those years set a strong foundation, when we worked together as peers,” Ammann recalls. “We were getting the place up and running.”
Building a culture of trust
The core concept for all three executives is trust, built on a mutual respect for what Barra calls “leveraging diversity of thought.” That’s critical because GM is huge; it combines manufacturing, financing, and technology on a mass scale, so it’s always grappling with what Reuss calls’ “big, complex problems.” That requires frequent communication.
Barra has made tough calls at GM, calls that had been avoided by previous leaders. Reuss, Ammann, and Barra know that since 2010 the auto industry has enjoyed nearly a decade of expansion, and that booming sales can’t last forever. A downturn will arrive, and as skilful as the team has been so far, the real test is over the horizon.
Reuss has seen his share of recessions and is unflinching about what’s in store for him and colleagues. He knows they won’t find out if they’re truly up to the task of running GM until the business gets hard. The worst aspect of this difficult yet important task is uncertainty.
“Every auto recession has been a surprise,” she says. “You don’t know what will drive it. But I’m confident in the work we’ve done. We’ll figure it out.”
- GM has made it through two world wars, drastic shifts in the global economy, the Great Depression, and the Great Recession
- The company used Global Financial Crisis to build a strong foundation, understanding where GM was making money and where it wasn’t.
- Through this, long overdue decisions were made – hard decisions that couldn’t have been made otherwise – selling brands that had been part of GM for decades (e.g. Opel – Vauxhaull – sold to Peugeot).
- Now, they are using the laser focus developed during the recession to invest cash coming in from surges in pick-up and SUV sales to invest into the future, strengthening their EV fleet and technology.
This is an extract from Business Insiders “How GM went from bankrupt and on the brink of death to being one of the world’s best-run car companies”