CEO Barra leans on small circle of GM veterans

DETROIT Wed Apr 30, 2014 4:37pm EDT

General Motors CEO Mary Barra appears onstage during a launch event for new Chevrolet cars before the New York Auto Show in New York April 15, 2014. REUTERS/Carlo Allegri

General Motors CEO Mary Barra appears onstage during a launch event for new Chevrolet cars before the New York Auto Show in New York April 15, 2014.

Credit: Reuters/Carlo Allegri

DETROIT (Reuters) - In the midst of General Motors Co's (GM.N) biggest crisis since bankruptcy, new Chief Executive Mary Barra is turning to an inner circle dominated by company "lifers," believing the team is up to handling a massive recall and reinvigorating the company without much outside help, former and current GM executives say.

Barra's every move is being dissected in the wake of the recall of 2.6 million cars for an ignition switch defect linked to at least 13 deaths.

One question is whether the "New GM" that emerged from bankruptcy in 2009 is a different company from the old one.

Barra's inner circle includes one relative newcomer, and GM has hired three outside consultants for help with the switch crisis, but most of her core team, like Barra, are long-time GM veterans.

Products chief Mark Reuss may be her closest ally, even though the two vied to become CEO, according to a consensus of eight current and former executives, who asked not to be identified. He's a "car guy" and she's a "car gal," an accolade in Detroit for true driving enthusiasts.

The second close advisor is chief counsel Michael Millikin, who has risen in influence as he has helped guide the company's guarded response to the ignition switch defect. He is co-leading the internal probe of the switch.

GM declined to comment on Barra's closest team.

Barra has said she meets with her team daily by phone or in person. She also makes nearly daily calls to non-executive Chairman Tim Solso, the 67-year-old former Cummins (CMI.N) CEO, who was chosen by the board as chair at the same time Barra was named CEO, in order to mentor her. Solso is not part of the core team running the company's day-to-day operations, though.

When Barra, 52, went to Congress for a grilling, Milliken and Reuss sat behind her as she repeatedly apologized, promised to take care of customers and offered limited details of what actually happened.

The inner team is rounded out by Human Relations head John Quattrone, Alan Batey, the company's point person with U.S. dealers, and former Wall Street banker Dan Ammann, who as chief financial officer reworked the company's opaque financial systems after bankruptcy. All of the five but Ammann have been at GM for more than three decades.

"She's not looking for personal advisors who would be separate from the management team," said a person familiar with GM's operations. Barra, a 34-year GM veteran, believes that looking outside the GM executive ranks and board room is not necessary, given the management team's crisis experience surviving the U.S. economic meltdown in 2008 and the company's bankruptcy the following year, the person added. Most have worked around the world for GM.

AKERSON'S PLAN

Barra's team was assembled to rebuild the company from the inside, not to take on the switch crisis.

They are a legacy of former CEO Dan Akerson, who anointed Barra and set the key elements of the company's post-bankruptcy strategy: launch better cars and trucks for which the automaker could charge higher prices, while repairing overseas operations, especially in money-losing Europe.

Millikin, 65, was "connected at the hip with Akerson" and North American chief Batey, 51, was also a confidant, sources said. Quattrone, 61, though, is a former lieutenant of Barra, when she ran HR following the company's 2009 bankruptcy.

"Your inner circle has to include product development, because that's where most of the people are; customer sales and service, because the dealers are the face of the company; and HR, because it's recruiting, promoting and rewarding the right people," a second person familiar with GM's operations said, referring to jobs held by Reuss, Batey and Quattrone.

Reuss, 50, is a fellow engineer who succeeded Barra as GM's global product development chief and speaks the same language.

"They have similar backgrounds, are about the same age and obviously have spent a lot of time together the last few years," one of the former GM executives said. The two together faced reporters in March for the first time after the recall.

Sitting next to each other at a table with several journalists at the company's Detroit riverfront headquarters, Barra fielded most questions, occasionally calling on Reuss, who explained how GM tracked potential defect issues, for instance.

Relative newcomer Ammann, 42, was recruited from Wall Street in April 2010 to be treasurer and manage GM's reintroduction to the public stock market that fall. Now president and charged with running GM's regional operations, he was the third prominent executive considered along with Barra and Reuss for GM's top job.

Ammann advised GM during its bankruptcy reorganization as head of industrial investment banking at Morgan Stanley, and sources said the New Zealand native is seen as representing an outsider voice given his shorter history at GM. But he has an insider's approach to cars: he spent his first bonus from Morgan Stanley on a light blue 1961 Cadillac Series 62 convertible.

Barra and GM have turned to outsiders in some cases to help in its handling of the recall. Former U.S. Attorney Anton Valukas is co-leading the company's internal probe, attorney Kenneth Feinberg has been hired to examine what step GM might take for families of crash victims, and crisis consultant Jeff Eller was recruited to help in the company's overall response.

There is room for a sixth adviser as well. Public relations chief Selim Bingol stepped down earlier this month, one of a small flurry of executive departures sources saw as giving Barra room to pick her own team. HR chief Melissa Howell left, replaced by Barra's old lieutenant, Quattrone.

(This story corrects Ammann job description in paragraph 19 to "charged with running GM's regional operations" from "charged with running GM's operations outside North America" because his regional responsibilities include North America)

(Reporting by Ben Klayman in Detroit, editing by Paul Lienert and Peter Henderson)