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 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 No. 1 U.S. 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 criticized 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.
"The promotion of Barra as CEO indicates there is more to come in
the evolution of the company and may attract some new longer-term
investors who were skeptical about an over finance-dominated
executive suite," Barclays analyst Brian Johnson said.
GM said on Tuesday that Akerson, who is also the chairman, will
leave on January 15. 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. GM might be trying to
address that by naming Solso to the chairman role.
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.
"CAR GAL"
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."
"The bankruptcy transformed the balance sheet, but the
transformation of the company is still a work in progress,"
Guggenheim Securities analyst Matthew Stover said. He added that
only time will tell whether Barra, who has spent her entire career
at GM, is the change agent as touted by Akerson.
As Akerson leaves the helm at GM, Ford Motor Co is also on the verge
of a possible change at the top. Ford CEO Alan Mulally is on a short
list to become the next CEO at Microsoft Corp.
CHOOSING 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 U.S. 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.
"Bottom-line is that investors need to focus on valuations, GM's
ability to grow its top-line, bottom-line and cash flow," said
Martin Gedja, an investment adviser at GM shareholder BMO Nesbitt
Burns.
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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.
"The key to General Motors' long-term success is great products,"
Barra said in a video posted on the company's website on Tuesday.
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 reorganization.
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. The topic was heavily discussed at
the late November board meeting before the plan was finalized over
last weekend, said the person, who asked not to be identified.
Some GM employees and analysts said Akerson gave Barra's candidacy a
boost in September when he said it was "inevitable" that a woman
would one day run one of the U.S. automakers. In addition to the
women on the board, GM has several women executives in senior
management.
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.
Independent auto analyst Maryann Keller said Barra has many of the
attributes that Mulally used to help turn around Ford after his
arrival in 2006.
"Akerson's tenure is too short and will be measured on whether or
not he has chosen the best successor," she said. "She is an
excellent choice, but you won't know that until she actually starts
the job and appoints the people she wants to help her finish a job
that is only partly done."
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.
OTHER EXECUTIVE CHANGES
In other management changes, GM said Chief Financial Officer Dan
Ammann, 41, would assume the title of president, while North
American chief Mark Reuss, 50, would replace Barra as head of
product development. Alan Batey, currently vice president of global
Chevrolet, will replace Reuss as head of North America.
Ammann will assume responsibility for managing the company's
regional operations around the world, as well as having the
Chevrolet and Cadillac brand operations and GM Financial report to
him. Analysts welcomed his promotion as it keeps the highly regarded
executive in the fold and gives him the operational experience many
felt he lacked to round out his resume.
GM did not name a replacement for Ammann as CFO. Ammann will retain
his CFO duties through the release of fourth-quarter results in
February.
Vice Chairman Steve Girsky, 51, will move to a senior adviser role
until leaving the company in April, GM said. He will remain on the
board.
Solso is the former chairman and CEO of Cummins Inc and has been a
member of the GM board since June 2012. Guggenheim's Stover expects
Solso to be an active chairman at GM.
(Additional reporting by Bernie Woodall
in Detroit and Ross Kerber in Boston; editing by Matthew Lewis,
Tiffany Wu and Grant McCool)
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