As former GM executive Bob Lutz explained in his recent book, Car Guys vs. Bean Counters, automobile executives tend to be people who love cars or people who love numbers. By all accounts, Mary Barra, the next CEO of General Motors, is the former—a “car guy” (or “car gal,” as some are now calling her).
“Her career has included time as vice president of global manufacturing engineering, head of GM’s Detroit Hamtramck Assembly plant and executive director of competitive operations engineering,” Crain’s Detroit Business noted. Barra also led the company’s human resources department and, most recently, its vehicle development operations. She started out on the factory floor.
This has a lot of observers of the U.S. auto industry excited and pleased. Even Barra’s predecessor, current GM chief Dan Akerson, recently complained that “the Detroit Three are all run by non-car guys.” And some people think that bringing in a car guy is just the change that’s needed.
“There’s nobody with more years of honest ‘car-guy’ credentials than she has,” Erik Gordon, a professor at the University of Michigan’s Ross School of Business, told the Associated Press. “She’s the one to do the breakthrough.” Lutz, for his part, has predicted Barra “will have a learning curve, but will be an excellent CEO.”
Peter Drucker took an interest in the car-guy/bean-counter divide, but he had no strong commitment to one party or the other being in control. GM’s legendary Alfred P. Sloan, who led the company from the 1920s to the 1950s, seems, in Drucker’s description, to have been a bean-counting car guy—or maybe a car-guy bean counter. “He himself was not a financial person but an engineer with strong marketing instincts,” Drucker recalled in Management Challenges for the 21st Century. “But as an engineer he had been trained to look first at figures.”
It was in fact GM that first developed “cost accounting” in its business, back in Sloan’s early days as head of the company. This was a triumph at first, before the approach later drove the company into a cul-de-sac, with “ineffectual” results from “30-year GM veterans who had never worked for any other company or, for that matter, outside of finance and accounting departments,” as Drucker put it.
The accounting model caused the company to do things that the marketing people thought were unwise, like building all car models from a small number of frames and engines. That might have saved on production costs, but it caused the cars to “lose customer appeal as they looked more and more alike.”
What do you think of GM’s new pick?