US Markets
Monday, January 15th, 2024 4:01 pm EDT
Key Points
- Barra’s Successful Leadership and Transformative Legacy: Mary Barra, serving as the CEO of General Motors for the past 10 years, has been recognized as a dynamic executive successfully steering the company through high-profile crises. Her leadership has resulted in record profits, cultural changes, and achievements, earning her a reputation as a visionary and inclusive leader. Barra’s tenure has been marked by addressing problems head-on, including managing a massive vehicle recall and restructuring GM’s safety operations. Her leadership philosophy emphasizes swift decision-making and has positioned her as a significant figure in GM’s transformative journey.
- Challenges in Recent Business Initiatives: Despite Barra’s overall success, recent business plans, especially those related to electric vehicles (EVs) and autonomous vehicles (AVs), have faced internal and external challenges. GM’s ambitious initiatives, including a $35 billion investment in EVs and AVs by 2025, have not met expectations. The EV rollout and demand have been slower than anticipated, and GM’s stock price has seen a decline, with Warren Buffett’s Berkshire Hathaway selling all its GM shares in 2023. Challenges in launching next-gen EV models, such as the Chevy Blazer EV, and the discontinuation of affordable EV development plans with Honda have added to the complexities.
- Crisis at GM’s Cruise Unit and Uncertainty in AVs: A significant setback for GM has been the sudden crisis at Cruise, its AV subsidiary, transforming from a potential business opportunity into a liability. An accident involving a pedestrian in San Francisco led to investigations, grounding Cruise’s robotaxi fleet and significant leadership changes. GM has been compelled to cut spending and pause the production of a new robotaxi. The turmoil at Cruise raises doubts about GM’s plans for personal autonomous vehicles and the Ultra Cruise driver-assistance system. These challenges, combined with uncertainties in EVs, highlight the complex landscape Barra faces as she aims to guide GM through a once-in-a-generation transformation in the automotive industry.
In the decade since Mary Barra assumed the role of CEO at General Motors (GM), she has navigated the company through significant challenges, earning praise for her dynamic leadership. Under her stewardship, GM achieved record profits, cultural changes, and exceeded Wall Street earnings forecasts in 34 out of the last 35 quarters. Despite her successes, Barra faces a critical year as GM’s stock price has declined by 10.5% during her tenure, and Berkshire Hathaway, led by Warren Buffett, sold all its GM shares in 2023. Barra’s recent initiatives involving electric vehicles (EVs) and autonomous vehicles (AVs) have not met expectations, with EV rollout and demand slower than anticipated. GM’s stock closed at $35.26 per share, down nearly 50% from its high in January 2022. Barra’s ambitious plans, including ending production of traditional internal combustion engine vehicles by 2035, have faced challenges, with next-gen EV models rolling out slowly due to production snags. GM’s recent EV model, the Chevy Blazer EV, paused sales due to significant software problems. While GM aims to exclusively offer EVs by 2035, the company acknowledges that customer demand will determine the pace of the transition. GM’s EV sales in 2023 totaled 75,883 units, constituting 2.9% of overall sales and ranking third behind Tesla and Hyundai Motor. The broader consumer demand for EVs has not materialized as expected, leading other automakers to reevaluate their electrification goals. GM’s foray into autonomous vehicles faced a setback when its Cruise unit, majority-owned by GM, encountered a crisis following an accident involving a pedestrian in San Francisco. Cruise’s robotaxi fleet was grounded pending safety probes, and the unit faced leadership changes and layoffs. The turmoil at Cruise raises questions about GM’s plans for personal autonomous vehicles and its next-gen driver-assistance system Ultra Cruise. Barra’s transformative legacy includes successfully navigating crises such as the ignition switch recall and restructuring GM’s safety operations. She also led the company through global restructurings and defended against activist-shareholder campaigns. However, the challenges of EVs, AVs, and shifting priorities pose new tests for Barra’s leadership. As GM focuses on righting the ship at Cruise and adjusts its EV goals, 2024 may determine whether it marks the pinnacle of Barra’s career or presents an unexpected dent in her track record. Despite the headwinds, Barra remains focused on GM’s ongoing transformation and sees the challenges as opportunities for a once-in-a-generation shift in the automotive industry.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/01/15/for-10-year-gm-ceo-mary-barra-2024-is-about-change-and-crisis.html
