Column

Starkman: Why GM Employees Should Bail on CEO Mary Barra and Avoid Early Morning Termination Emails

December 16, 2024, 7:50 PM

The writer, a Los Angeles freelancer and former Detroit News business reporter, writes a  blog, Starkman Approved

By Eric Starkman


Mary Barra (GM photo)

I’m heartened that I’m not alone in my outrage about GM’s firing of 38-year veteran employee Adam Bernard.

I featured Bernard in my column a few weeks ago highlighting that under the leadership of CEO Mary Barra, GM is an undeniably soulless and dishonest company. Bernard, who holds a Harvard MBA and an engineering degree from MIT, dedicated his entire professional life to GM. He also was a mentor to many employees, having served for 16 years as chair of GM Plus, an employee resource group for lesbian, gay, bisexual, transgendered, and allied employees.

Bernard was among the latest round of 1,000 employees Barra has fired, most of them at GM’s Technical Center in Warren. He was notified of his termination in an email he received at 5:07 am.

Bernard’s firing sparked outrage online, and the hundreds of supportive comments posted on his LinkedIn page made clear he is well known and respected in the automotive industry. Veteran Detroit Free Press writer Susan Tompor, who specializes in consumer issues and notably doesn’t cover GM, last week wrote a feature story about the uproar over Bernard’s callous firing.

On Saturday, The Daily Mail, a UK publication looking to boost its U.S. presence, published this story headlined, “Brutal way loyal GM worker, 60, was laid off after 38 years of service sparks outrage across America.”

Global Lightning Rod

Barra should be concerned about becoming a global lightning rod for obscenely paid CEOs lacking an appreciation and compassion for their rank-and-file underlings, particularly since she served as 2022 chair of Business Roundtable, an association of America’s fat cat chief executives. Barra received $28 million in compensation in 2023, despite failing to achieve her previously stated goals and objectives.

My sense is that Barra is an imperial CEO very far removed from GM’s workforce, which explains the pangs of loneliness she claims to experience.

Barra’s indifference to GM employees was evident again last week with her decision to pull the plug on GM’s Cruise driverless taxi business, which she declared two years ago was “on the cusp of commercialization” and just a year ago was crowing it would be generating $50 billion in annual revenues by the end of the decade. Cruise’s employees have been put through the ringer and given that Barra says she wants to retain some of them, it might have behooved her to visit Cruise’s San Francisco headquarters and personally informed employees of her decision to pull the corporate rug from underneath them.

That’s not how Barra rolls.


Marc Whitten (Linkedin photo)

According to the trade publication TechCrunch, Cruise CEO Marc Whitten posted a message on the company’s announcements channel linking to GM’s press release announcing Cruise’s closure. One source told TechCrunch that employees learned about GM’s plans the same time the media did and that even Cruise’s senior management was surprised by the decision.

TechCrunch also reported that Cruise employees were told they “should be proud” of themselves and that “the technology will live on.”

Pathetic! I doubt that the patronizing message made even one Cruise employee feel better.

Whitten, a veteran tech executive, joined Cruise this past summer, as did former Rivian executive Nick Mulholland to oversee communications. Mulholland said he joined Cruise because the company’s “dedication to its mission will change the world.”

Careers Derailed

Whitten and Mulholland have joined an extensive and growing list of accomplished executives whose careers have been derailed hitching their reputations to Mary Barra’s GM wagon.

GM acquired Cruise, a company co-founded by tech wiz Kyle Vogt, for $1 billion in 2016. The visionary acquisition wasn’t spearheaded by Barra but rather then GM president Dan Ammann, a New Zealand-born executive who helped lead GM out of bankruptcy when he was a Morgan Stanley banker and was a candidate to become the automaker’s CEO. Multiple sources have told me that the Obama administration insisted on Barra.

In 2019, Ammann left GM to oversee Cruise and scaled up the operation. Three years later, Bloomberg pegged Cruise’s value at $30 billion. In late 2022, Barra reportedly ousted Ammann because he wanted to run Cruise independently of GM and Barra wanted to utilize Cruise’s autonomous driving technology in GM’s vehicles.

Barra reinstalled Vogt as CEO, who made it readily apparent that he was a cowboy when it came to safety and regulation. Cruise ran afoul of California and San Francisco regulators because its vehicles routinely interfered with first responders and wreaked havoc on city streets. Even the Bay area’s tech denizens came to despise the company.

Cruise last year was forced to ground its vehicles after one of its cars hit and dragged a pedestrian, causing severe injuries. Joe Biden’s Justice Department – Barra reportedly is close with the president – recently allowed Cruise to escape criminal prosecution for “providing a false record” to the NHTSA “with the intent to impede, obstruct, or influence the investigation of a crash involving one of Cruise’s autonomous vehicles.”

Measly Fine

The so-called deferred criminal prosecution agreement – the second one under Barra’s watch – only required Cruise to pay a measly $500,000 fine -- petty cash for a parent company with annual revenues of more than $170 billion.

Although Barra is chair of Cruise’s board and ultimately responsible for overseeing the company’s management, as has always been the case under Barra’s leadership, others took the fall. A law firm GM hired to investigate Cruise’s regulatory issues blamed the company’s “poor leadership” and “culture” for the repeated lapses.

Blame For Cruise's Issues

Vogt and more than a half dozen other executives were ousted, including COO Gil West, who Delta CEO Ed Bastian publicly praised for successfully integrating the merger of Delta and Northwest Airlines. West was promptly scooped up by Hertz to oversee that company’s operations.

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Kyle Vogt (Linkedin photo)

Some media critics blame Vogt for Cruise’s regulatory issues that led to the company’s demise, with one investor absolving Barra based on speculation that she was unaware of Cruise’s myriad technology issues.

I’m not so charitable.

Dishonesty and deception are allegedly pervasive at GM under Barra’s watch. In his GM data privacy lawsuit, Texas AG Ken Paxton outlined in considerable detail the lengths GM allegedly went to deceive buyers of the company’s vehicles into allowing the automaker to track record and monetize their driving habits.

“GM’s practice was to subject consumers who had just completed the time-consuming and stress process of buying or leasing a vehicle at a dealership to an ‘onboarding process,’” Paxton alleged in his lawsuit. “To customers, the onboarding process appeared to be a mandatory pre-requisite to taking ownership of the vehicle; however, it was no more than a deceptively designed sales flow to ensure that customers would sign up for GM’s products and unwittingly be enrolled in GM’s Driving Data collection scheme.”

A federal appeals court in August ruled that GM must face a class action claiming it violated laws of 26 U.S. states by knowingly selling several hundred thousand cars, trucks and SUVs with faulty transmissions. The lawsuit was filed on behalf of buyers of Cadillac, Chevrolet and GMC vehicles equipped with 8L45 or 8L90 eight-speed automatic transmissions and sold in the 2015 through 2019 model years.

Barra, who became CEO in 2014, routinely makes public statements revealing that she’s either dishonest or has a tenuous relationship with reality.

At a recent automotive press gathering, Barra told reporters she shared Donald Trump’s goal to foster “a strong manufacturing base” in the U.S.

Under Barra’s leadership, GM became Mexico’s biggest automotive manufacturer and was planning on significantly increasing its presence there. Within months of Barra’s friend Joe Biden getting elected, GM announced it would spend $1 billion to electrify one of its Mexican plants to build EVs there in 2023.

Built in Mexico

GM began building the electrified versions of its Chevy Blazer and Equinox models in Mexico last year, and the company has announced it will build its Cadillac Optiq there are as well. Barra would have moved even more jobs to Mexico, but Energy Secretary Jennifer Granholm before the election donated $500 million to GM to electrify its plant in Lansing, covering more than half the cost.

It speaks volumes that Barra shook down the Biden administration for $500 million, in wake of spending $16.5 billion to manipulate GM’s depressed stock with stock buybacks and then cashing out a big chunk of her holdings. Stock buybacks, which were once illegal, typically raise the value of a company’s share price because there are fewer shares outstanding.

Barra manages GM to please Wall Street and analysts like dial-a-quote expert Dan Ives, who is cited in almost every automotive story I read in the corporate media. Barra takes direction from Ives at her own peril.

Ives in late 2022 declared Tesla’s stock a “train wreck” and declared on CNBC that he removed it from his “best ideas” list. Tesla’s stock weeks later doubled from its 52-week low, allowing legendary investors George Soros and Steve Cohen to make a killing betting against Ives’s wisdom.

At this writing, Wall Street values Tesla at $1.5 trillion and GM at $57 billion.

Perhaps Barra one day will make good on her vow to transform GM into a world class EV manufacturer, but she’s a long way off.

Consumer Reports recently trashed GM’s EV Cadillac Lyriq and Blazer, warning they suffer from problems with their batteries, electrical accessories, climate systems, in-car electronics, and other components. Under Barra’s watch, Cadillac is ranked by CR as the second most unreliable automotive brand and the publication advised readers to avoid all of GMC’s trucks and pickups. Barra has admitted that GM expects its warranty costs to increase, another sign of trouble and potential costly litigation.

Silicon Valley

Barra earlier this year opened an office in Silicon Valley, declaring that’s where the tech talent is. Unceremoniously shuttering Cruise after touting the company’s potential for years isn’t going to bolster the company’s reputation in the Bay area, particularly with Vogt posting on X after GM announced it would shut down Cruise: “In case it was unclear before, it is clear now: GM are a bunch of dummies.”

Elon Musk responded with a laughing emoji, no doubt mindful that years ago Barra vowed she’d be selling more electric vehicles than Tesla by 2025 and President Biden hailing Barra for “electrifying the entire automobile industry.”

It takes considerable smarts and talent to design, engineer, and market automotive vehicles, and I imagine most GM employees appreciate they are possibly moments away from getting fired. My unsolicited advice is to learn from Barra and look out for yourself rather than wait to become yet another victim of her flailing and uninspiring leadership.

Reach the writer at Eric@starkmanapproved.com. Confidentiality is assured.



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