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How Mary Barra Will Lead GM

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Mary Barra succeeds Dan Akerson in January

A middle-aged staffer at General Motors felt goose bumps when she saw Mary Barra enter a room for the first time after she was named General Motors’ new chief executive. “I’m not kidding – the hair stood up on my arms,” she said. “It’s like we have our own queen!”

But Barra, 51, the first woman to ascend to the GM throne, is no monarch. Nor is she a dictator. She’s just a soft-spoken, math-loving nerd with a passion for problem-solving. And that’s encouraging, given GM’s recent history as one of the most dysfunctional companies on Earth.

“I know what this place can be. I know what it’s capable of,” Barra told me during a 2011 interview, after taking over GM’s global product development. “I know how hard people work. We just have to be sure we’re working on the right things.”

Barra doesn’t take over for the retiring Dan Akerson until Jan. 15, so for now, she’s not saying much about how she’ll run the company. Most of her career has been spent in the trenches, running factories or trying to standardize GM’s manufacturing process around the world. More recently, as head of the most expensive and complex part of GM’s business, she’s been working to cut waste by designing more vehicles that share parts and by getting GM's powerful purchasing and product development units to work together. She cut an entire layer of management, giving chief engineers more responsibility for product cost, quality and competitiveness. “Mary went into an organization that was in chaos and brought order,” says Akerson, calling her “one of the most gifted executives I’ve met in my career.”

She got a view from the top in the mid-1990s while working as an executive assistant to former Chairman and Chief Executive Jack Smith. She even did a brief stint as head of human resources in the traumatic post-bankruptcy days, a tribute to her knack for getting people to work together. But if she has a larger strategic vision for GM, she hasn’t articulated it yet.

But running GM won’t be entirely on Barra’s shoulders, either. For the first time in decades, GM’s board of directors opted to split the job of chairman and chief executive, something most corporate governance experts recommend to avoid giving one individual too much power and to protect shareholder interests. Theodore (Tim) Solso was named chairman, succeeding Akerson. Solso, 66, is the former chairman and CEO of Cummins , Inc., and has been a member of the GM board since June 2012.

GM also elevated Chief Financial Officer Dan Amman, 41, to president and gave him a huge portfolio of responsibility -- all of GM’s regional operations around the world, as well as its global Chevrolet and Cadillac brands and its lending arm, GM Financial. Mark Reuss, who had been president of GM North America, takes over Barra’s job heading global product development and purchasing. Alan Batey, global Chevrolet boss and head of U.S. sales and marketing, replaces Reuss.

“What we have here is a culture of team rather than of personality,” said Akerson, explaining the management changes. “They play well as a team. That’s part and parcel of Mary’s success, and the rest of the team plays well together too.”

Not one to haul around a big ego, Barra’s leadership style as CEO will likely involve the same traits that propelled her from a GM factory intern in 1980 to the pinnacle of American industry. She’s open and inclusive, yet at the same time probing and methodical. She actively solicits others’ opinions, but it’s the self-described “nerd” qualities that guide her gut. Emotional arguments just don’t cut it with Barra, says Melissa Howell, GM’s global vice president of human resources. “She’ll always come back to the facts.”

The facts about GM are these: the company is healthier than it’s been in years, but Barra still has much work to do. Akerson spent most of his three-year tenure trying to pick up the pieces from GM’s historic government bailout. A quick, 39-day rinse in bankruptcy enabled GM to start fresh with less debt, lower labor costs and fewer brands to support. But it was still a very sick company.

Akerson attacked GM’s operational issues -- its “plumbing and wiring,” as he called it -- as well as the structural risks that had destabilized the company for decades. In 2012, for instance, GM whacked $29 billion from its pension liability by offering lump sum buyouts to white-collar retirees and transferring the rest to an annuitized trust. He also rebuilt GM’s information technology system, which had been outsourced for decades, arguing that GM needed a better handle on critical information in order to make smart decisions. The company also overhauled its fuzzy accounting practices to the point where it can now track the profitability of each car down to the serial number, no matter where it’s sold in the world. And after selling its GMAC lending arm during the depths of its crisis, GM rebuilt a captive finance company through acquisitions, making it easier for customers and dealers to get loans. A string of well-received products like the Cadillac ATS, Chevrolet Impala and Chevrolet Silverado prove that GM is capable of designing and making high-quality vehicles.

In 2010, GM had the second-biggest initial public offering in U.S. history, and on Dec. 9, the company shed its “Government Motors” moniker for good when the federal government sold the last of its GM shares. The carmaker returned to the Standard & Poor’s 500-stock index and regained its investment-grade credit rating from Moody’s. It’s been profitable 15 quarters in a row, earning almost $30 billion before interest and taxes.

Now it’s up to Barra to continue that momentum. “It’s about no-kidding results,” she told me back in 2011. “Don’t tell me the dog ate your homework, because the customer doesn’t care.”

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