GM names first female CEO
The newly appointed CEO will be the first woman to lead a global automaker.
DETROIT - General Motors Co CEO Dan Akerson will step down next month and be replaced by GM 'lifer' and global product chief Mary Barra, a sign that the development of new vehicles will be the paramount focus of the company that emerged from bankruptcy four years ago.
The appointment of Barra, 51, is at once groundbreaking - she will be the first woman to lead a global automaker - and yet also very traditional. Her father is a long-time GM employee and Barra has spent her entire 33-year career at the Number one US automaker.
Barra's ascension also marks the re-emergence of an engineer at the helm of GM, a company long dominated by financial executives who were sometimes criticised by investors as lacking experience on the product side of the business.
With her engineering background, plant experience, time spent running human resources and her current job in charge of product development, purchasing and suppliers, Barra has the expertise needed to help continue the company's turnaround, analysts and investors said. The big question is whether someone so steeped in GM tradition can continue to drive the cultural transformation Akerson started.
GM said on Tuesday that Akerson, who is also the chairman, will leave on 15 January. He had planned to step down in mid- to late-2014, but brought that forward after learning about two months ago that his wife had an advanced stage of cancer.
Barra will be GM's fifth CEO in less than five years since Rick Wagoner was forced out by the Obama administration in March 2009 as the company headed towards its bankruptcy filing. She is currently an executive vice president.
The Michigan native will be GM's fifth female director. Theodore Solso, 66, will succeed Akerson, 65, as chairman.
Before the new CEO was named, some analysts and investors were concerned about whether Barra and the three other internal candidates had enough experience for the job.
Akerson said Barra had "brought order to chaos" in the global product development process. He said her task would be to finish the job he started: further raising profits by making product development more efficient, bolstering operations in Asia outside China and building on the small progress made in money-losing Europe.
In a town hall meeting with employees, Akerson called Barra a 'car gal', playing on the 'car guy' term used heavily in the industry to describe male executives who know vehicles well.
He said Barra was chosen for her talent, not gender, and that the board had not looked at any outside candidates. He said Barra's selection was unanimous and it was the board's decision to split the chairman and CEO jobs, a move he supported.
Under Akerson, GM moved to eliminate some of its historic bureaucracy and inefficiencies, recovered its investment grade credit rating and pared financial losses in its European business. He said history would view him as a 'transition CEO'.
PICKING A SUCCESSOR
Investor reaction to the news was muted: GM shares closed down 1.2 percent at $40.40 on the New York Stock exchange.
However, they hit an all-time high of $41.16 on Monday after the US Treasury announced it had sold the last of its GM shares, something investors believe could lead to the restoration of a common stock dividend.
Some investors see a possible dividend as a bigger stock catalyst than a new CEO.
Barra has risen through a series of manufacturing, engineering and senior staff positions, and is currently in charge of reducing the number of platforms on which GM builds its vehicles. Her father worked as a die maker at GM for 39 years.
Sources told Reuters last month that Akerson might step down in 2014, a move widely expected once the government exited its stake. He was appointed CEO just before GM re-entered public markets on November 2010, following a $49.5 billion government bailout and bankruptcy reorganisation.
Speculation on his exit gained steam in April, when GM disclosed in a securities filing that his compensation plan had changed.
GM's board began discussing the succession issue about a year ago, but Akerson's wife's cancer sped up the decision, a person familiar with the board's thinking said.
In 2013, women accounted for 4 percent of CEOs in Fortune 500 companies and only 3.3 percent of those at durable goods manufacturers, according to advocacy group Catalyst.org.
GM has not yet disclosed the new CEO's compensation package. Akerson said with Treasury's exit as a shareholder, GM's executive compensation will become more performance-oriented with as much as a quarter tied to quality.