Tags: General Motors | CEO Mary Barra | Chairman | Woman

GM's Barra Adds Chairman Role, Breaking Gender Ground Again

Image: GM's Barra Adds Chairman Role, Breaking Gender Ground Again
Mary Barra (AP)

Monday, 04 Jan 2016 07:05 PM

General Motors Co.’s board elected Chief Executive Officer Mary Barra as chairman, signaling its approval of the job she’s done almost two years after becoming the biggest U.S. automaker’s first female CEO.

Barra, who has spent her entire career at the company, succeeds Tim Solso, who will remain on the board as lead independent director, GM said in a statement Monday.

In making Barra, 54, the company’s first female chairman, GM’s board provided an endorsement of her leadership and the automaker’s direction. With profits increasing and the legal issues from the ignition-switch recall mostly behind the Detroit-based company, the board indicated that GM is on sound footing with her at the helm.

“It says that she has done a good job and set the right tone for the company,” said Maryann Keller, an independent auto analyst who wrote two books on GM management under past Chairmen Jack Smith and Roger Smith. “She takes responsibility for what happens at GM. With past management, it was always the blame game.”

Under Barra, GM voluntarily took responsibility for the ignition-switch fiasco that was linked to 124 deaths and cost the company $900 million in a settlement with the U.S. Justice Department and $600 million in payments to victims. GM set up a fund to pay victims who could not sue because the switches were installed before the company’s 2009 bankruptcy.

Barra took over as CEO in January 2014 and much of her first year in that job was consumed by the ignition-switch defect. But GM has proceeded to make a number of strategic decisions, such as pulling out of Russia and ending Chevrolet operations in Europe. Earlier Monday, GM said it will invest $500 million in ride-hailing startup Lyft Inc., gaining a major ally in a fast-growing market.

‘Right Time’

“At a time of unprecedented industry change, the board concluded it is in the best interests of the company to combine the roles of chair and CEO in order to drive the most efficient execution of our plan and vision for the future,” Solso said in the statement. “With GM consistently delivering on its targets and on track to generate significant value for its shareholders, this is the right time for Mary to assume this role.”

In China, GM managed to keep profits stable even as sales in the region slumped. While the car market weakened, the automaker dedicated production to more-profitable sport utility vehicles and higher-priced Buicks.

Barra has also pushed a technology agenda. GM is racing to stay in step with Google’s efforts to build a self-driving car. This week at the CES electronics show in Las Vegas, she will unveil the Chevrolet Bolt, a pure-electric car.

Women held the CEO post at 21 of the Standard & Poor’s 500 companies as of mid-December, according to Catalyst. About 20 companies had a female chairperson, according to data compiled by Bloomberg. Only 11 have women in both roles. Among those are soft-drinks company PepsiCo Inc., led by Indra Nooyi; Xerox Corp., headed by Ursula Burns; and defense contractor General Dynamics Corp.,whose board Barra is a member of, led by Phebe Novakovic.

Dan Akerson, who was Barra’s predecessor as GM’s CEO, also held the chairman post. The company split the two jobs when she took over as chief executive.

‘Big Mistake’

Bringing the jobs back together “is a big mistake, particularly given GM’s history,” said Charles Elson, director of the John L. Weinberg Center for Corporate Governance at the University of Delaware. “The trend today is to go to a split of the two roles.”

GM’s governance guidelines leave that decision to the board, said Ira Millstein, who is a senior partner at the law firm Weil, Gotshal & Manges LLP and has advised the automaker on corporate-governance issues.

“We can all have our preferences, but in the end it’s the board’s decision,” Millstein said in an e-mail.

The chairman and CEO jobs were combined in 52 percent of S&P 500 companies in 2015, down from 60 percent in 2010 and 71 percent in 2005, according to an annual report by executive recruiter Spencer Stuart.

Solso, the former chairman and CEO of Cummins Inc., joined GM’s board in 2012. He became chairman in 2014 and forged a good working relationship with Barra, he said after she took on the CEO role. She handled the switch crisis with calm and “as a good leader, she’s used the challenge as a catalyst for change,” he said.

Before bankruptcy, GM faced a host of challenges, which management often blamed for the company’s weak profits and poor balance sheet. 

“There was a belligerence about GM in the past,” said Keller, the auto analyst. “It was Japanese manipulation of the yen, unfair Japanese competition, it was the union or consumers who didn’t realize how great their cars were.”

Barra took responsibility for the company’s problems, even with ignition switches that were designed two decades ago, Keller said.

“She doesn’t pass the buck,” Keller said. “Clearly the board had a trial period and getting both jobs is her reward.”

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General Motors Co.'s board elected Chief Executive Officer Mary Barra as chairman, signaling its approval of the job she's done almost two years after becoming the biggest U.S. automaker's first female CEO.Barra, who has spent her entire career at the company, succeeds Tim...
General Motors, CEO Mary Barra, Chairman, Woman
Monday, 04 Jan 2016 07:05 PM
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