GM's Mary Barra is going all in on EVs

Contrary to other automakers, who in response to slowing consumer demand are scaling back plans to convert their car and truck lineups to all-electric, General Motors (GM) Chair & CEO Mary Barra is still all in on EVs.

"We will be selling more EVs in this country than anyone else, including Tesla," Barra told Yahoo Finance Executive Editor Brian Sozzi in an exclusive interview at GM's technical campus in Michigan.

It's a fitting stance for a leader who has overcome a host of issues over her 10 years at the helm of 100-year-old plus GM - by taking a different approach and applying a different vision than others before her.

At the time Barra took over as CEO, General Motors was still emerging from its 2009 bankruptcy and reeling from an ignition switch recall that led to over one hundred fatalities. Barra was tasked with completely changing GM's siloed culture and simultaneously changing how the public viewed the company’s cars, as well as regaining their trust.

And now she's looking to take GM into a future that she believes includes cars and trucks that run on batteries.

Yahoo Finance got the rare opportunity to sit shotgun with Barra in the newly designed E-Ray Corvette to hear how the change-maker CEO intends to make good on her bets to become the leader of electric and autonomous vehicles, despite stiff competition from Tesla (TLSA) and skepticism from shareholders.

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Editor's Note: This article was written by Brian Vitagliano

Video transcript

[MUSIC PLAYING]

MARY BARRA: Our mission is to create a world with zero crashes, zero emissions, and zero congestion.

I think a crisis is the time you really demonstrate to the entire team. You're going to live your values. 2024 is really a critical year.

BRIAN SOZZI: The leader of one of the largest automotive companies in the world, General Motors CEO Mary Barra has her work cut out for her. Over 100-year-old company, GM is facing a turning point in an industry racing into the future.

From her early days as crisis manager to her recent changemaking goals, Barra has made some big bets on where she intends to take the company. She promises to double GM's revenue by 2030, transition GM's fleet to be fully electric by 2035, and to have GM become the leader in autonomous vehicles within the next five years. Overtaking Elon Musk's Tesla and thwarting longtime rival Ford after being skeptical for some time on Barra's transformation plan, investors have started to kick the tires on shares of General Motors.

We met with Barra at GM's Global Technical Center in Warren, Michigan, where we were given rare access to tour the campus in a new era Corvette. She reflected on her bumpy start at the helm of GM, the corporate culture shift she was forced to initiate and how she plans to convince hesitant investors of her bold vision for the future.

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MARY BARRA: Are you ready?

BRIAN SOZZI: Yeah.

MARY BARRA: All right.

BRIAN SOZZI: Let's rock and roll. Yahoo Finance had the opportunity to ride shotgun with Barra inside a new era Corvette, a car that required Barra and her team to take a gamble with a total redesign of the classic American sports car. She says it showcases what she believes will be the future of GM electric vehicles, while those moves translate into shareholder value, though, despite previous headaches with EVs like the bolt Barra seems to think so.

You're making bold bets on EVs. You have a great number of EVs. You envision an EV future. How do you deal with someone that maybe haven't worked in the past? How do you deal with that feedback from the team and even shareholders?

MARY BARRA: Well, I think first is be transparent and be honest with a company of this size. And again, whether you're in the midst of the transformation, we're going to learn a lot. We're going to learn what works, what doesn't. We're going to learn what the customer really wants. And so I think you just have to be nimble and not--

The worst thing you could do is stick with something when it's not working. And you find out there's a better way. And so we learn and we make changes.

BRIAN SOZZI: What did you see 10 years ago that drove you to this conclusion that GM needed to be all electric by 2035?

MARY BARRA: Well, I think if you go back to EV1, I mean, GM was ahead of its time. And so we never stopped working on EVs and battery technologies. In 2010, we came out with the volt which was an extended range electric vehicle.

And then the bolt in the 2015 time frame. But then again as we really started to look at climate change really started to understand where the regulatory environment was going, that's what led us to do the Ultium platform where we could really provide, be able to do vehicles faster.

BRIAN SOZZI: Although GM's revenue grew by 10% from the prior year, 2023 didn't come without challenges as the company was forced to take a $1.1 billion production loss as a result of the UAW strike. Something it's now carrying over into 2024 as a doubles down on its EV bet.

It's been a challenging six months for the auto industry. Or if not a bit longer, given the strike. The UAW strike, what did you learn as a leader going through that process?

MARY BARRA: We knew that it was going to be a very important negotiation. Clearly, there was new leadership in the UAW. And we were just learning each other and had different priorities. So we had to do a lot of problem solving.

So it was a difficult time. But we got through it. I've been involved in Labor Relations in one sense or another for 20 years. And our employees that are represented, and we have to talk and understand.

Again, sometimes we have different priorities. But how do we find the solution. Because we have to do what's right for the employees, but we have to also have to do what's right for the company. Because without the company, the employees aren't going to have the job.

BRIAN SOZZI: From her early days inspecting fenders at a Pontiac plant to becoming the first female leader of one of the big three automakers, Barra has already honed her leadership chops in a variety of ways both intended and not.

Took over as a CEO of GM at a very tough time just following the bankruptcy of the company. Is there a different playbook to lead during a crisis?

MARY BARRA: I think a crisis is the time you really demonstrate to the entire team. You're going to live your values. You know, you're going to do what you've been saying.

It's easy to do the right thing, or it's easy to do live your values when everything's going well. But really showing them when it's tough, we're still going to do the right thing. We're still going to live our values. We're going to focus on the customer. All of that, I think, that's what you've got to demonstrate.

And when you do, it becomes much more ingrained. And people are like, OK, yes, I get it. They're committed. And that's so important when you lead a team the size of General Motors.

BRIAN SOZZI: Was it really important then to be visible and vocal?

MARY BARRA: Absolutely we needed to overcommunicate. And we did. Not only myself but several leaders.

One thing that happens in a crisis is you learn you have an issue. But it happens depending on what it is over the next several days, several weeks, sometimes even several months of what really happened.

BRIAN SOZZI: Barra never really had a choice about being visible or vocal. One of her first tasks and leadership tests was navigating the company through one of the most high profile and damaging recalls to hit a major automaker.

MARY BARRA: I am deeply sorry.

BRIAN SOZZI: Sorry not only for what happened, a faulty ignition switch that led to over 200 injuries and more than 100 fatalities, but for the internal culture that allowed a decade to go by before defective vehicles were recalled. A 325-page report made public after an internal investigation found a culture at GM that lacked accountability and ownership when it came to safety issues. The recall and internal investigation into how the company failed to address problems sooner forced Barra to change the siloed culture at GM to ensure an epic communication failure can never happen again.

How did you go about changing the culture at GM within those first six months on the job?

MARY BARRA: It was a really interesting time because everything was being written. Mary Barra can she change General Motors culture.

BRIAN WILLIAMS: The federal government today hit General Motors with the biggest fine ever levied on an automaker, the maximum penalty for failing to sound, the alarm about a serious safety defect.

MARY BARRA: And not everything in our culture was bad. It's a little bit daunting because when you read about culture change. People say it takes five years.

What is a culture? A culture is what people think of the company. You can't fake culture.

But what you can do to start changing the culture is change the way you behave. So as a senior leadership team, we said, OK, we're going to start living and demonstrating these behaviors. And if we aren't, we're going to respectfully call each other out.

- Thanks, Mary.

MARY BARRA: Thank you all very much. Thanks for what you do. This is so important for the company. Thank you.

BRIAN SOZZI: Changing and adapting how a company the size and scope of GM behaves is no small feat. Something Barra addressed with the ignition switch debacle, but is now addressing again in a different way, the company's future.

MARY BARRA: I gave it enough acceleration. We're out of stealth.

BRIAN SOZZI: What do you think this car represents about your leadership?

MARY BARRA: First, when you talk about mid-engine, that was a vehicle that had been discussed for years. Finally, we believe that we had taken the Corvette as far as we could and that we needed to move to a mid-engine. And so it was a big commitment because it was a big investment.

BRIAN SOZZI: How do you ensure that these risks pay off?

MARY BARRA: We look at decisions on what product we're going to do, what features we're going to put in the vehicle. We put a lot of thought into how we do that. We do customer research. But then there's some things you can't research because sometimes you just have to go with something you believe is going to be so spectacular, and different, and excite the customer.

BRIAN SOZZI: The latest iteration of the iconic Corvette is certainly emblematic of going with something spectacular and different. The question is whether it and other efforts will be spectacular and different enough to convince consumers and shareholders that GM can go from American Revolution to American evolution. Investors have put GM's stock in the show-me category amid volatile earnings reports the last few years.

GM shares trade at a massive discount on a PE basis not only to the market, but relative to its highest profile rival Tesla. GM stock is also trading at a big discount to what its own hard assets are worth, things like real estate and factories, even a $10 billion stock buyback plan, something GM announced in late 2023 is a big sign that the company itself thinks its stock is undervalued and will be worth more down the road. It hasn't yet won over all the naysayers.

What is the most important thing you need to execute on to win over shareholders?

MARY BARRA: Well, we clearly have to demonstrate that the Ultium platform allows us to have a portfolio of profitable EVs that customers want to buy. Critical. That we have software in our vehicles that enables a better customer experience and easier customer experience, and surprises, and delights. And then that we craft the future path for cruise.

I mean, I really think it comes down to doing those three things well while delivering the financial results. And doing the right thing for our owners, our shareholders.

BRIAN SOZZI: Which means not doing everything at once. That includes decisions like pausing all autonomous vehicle activities at the end of 2023 when one of GM's Cruise robotaxis ran over a woman causing injuries. GM revealed the self-driving unit is under two federal investigations into the incident.

Barra also announced on GM's latest earnings call the company is cutting spending on the cruise division by $1 billion. Despite recent setbacks, Barra is still committed to an autonomous driving future.

Where do you see GM in five years?

MARY BARRA: I'm working hard to make sure we're leading in electric vehicles in the countries that we operate. I'm also very focused that we have software that creates a whole new customer experience. And then autonomy, when you think about self-driving vehicles, it really takes us to a safer place. Our vision is to create a world with zero crashes, zero emissions, and zero congestion. And I hope people in five years say they've done that and they're in a leadership position because of it.

BRIAN SOZZI: While Barra remains hyper focused on keeping GM not only profitable, but relevant enrolling in the 21st century, she still makes family a priority in her life. And yes, she tries her best to unplug at night.

MARY BARRA: I think every leader is different. But for me, I do need a little bit of a break because I think it allows you to have a fresh perspective. And I think you need to not disconnect. You're still doing emails every day.

You're always on call. I think is really important to get that break to get to just-- many times, I've woken up with a fresh perspective.

BRIAN SOZZI: A fresh leadership perspective that Barra hopes keeps a legacy automaker like GM competitive and successful in the uncertain years to come.

How important is 2024 for GM?

MARY BARRA: 2024 is really a critical year because this is a year of execution. And we need to demonstrate. And we're on track now. We had some challenges last year with building battery modules to put into the packs.

We're on our ramp plan now. I'm really proud of how hard the team has worked. So this is a critical year-- also a critical year for software. We have really brought in a new software team from Silicon Valley last year.

And they've made a lot of change to improve how we develop software, to improve how we validate software. So this is definitely a year of execution. But I'm confident the team can do it. And I'm excited to show the world what we can do.

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