UPDATED: See below
Yesterday was a big day for General Motors. Four-and-a-half years after the automaker zipped through a restructuring process facilitated by the U.S. and Canadian governments, three years after its return to the stock market, the U.S. government sold off the last of its shares in the company.
To many observers, that sell-off marked the official conclusion of a nearly $50 billion bailout project -- one that's been highly controversial but which, in the end, seems to have done far more good than harm. An analysis from the Center for Automotive Research says that the federal government stands to lose about $14 billion of its investment in GM, but that sum is massively outweighed by the $389 billion in household income, tax revenue, and other losses that the U.S. would've endured if GM had gone under.
Markets reacted positively to the sell-off: GM shares hit a record-high yesterday, closing at $40.90.
But all that may be overshadowed by today's even bigger news: GM's Dan Akerson is rumored to be stepping down from his role as CEO, and he'll be replaced by none other than longtime GM employee Mary Barra.
According to Bloomberg, Akerson will announce the changeover to employees today, with Barra's promotion to take effect in January (perhaps coinciding with the Detroit Auto Show).
We admit, the timing of the announcement is a little suspicious. Since the bailout, GM has often been dubbed "Government Motors" in the press, and yesterday's sell-off by the feds simply opened up old wounds. Like Suzuki's revelation that it was exiting the U.S. market on the day of the 2012 U.S. presidential election, we have a strong hunch that word of Barra's appointment was kept secret until the federal government confirmed that yesterday was the big sell-off day. Presumably, the hope was that hubbub around the new CEO would overshadow any negative publicity about the end of the bailout.
Then again, we can't blame GM's marketing staff for being strategic. After all, they're paid to make the company look good.
Nor can we blame GM for picking Barra. She's got a great resume, and there are several factors that make her a perfect choice for CEO:
1. She's a car person. Now 51, Barra has worked with cars for over 30 years. In that time, she's acquired a deep understanding of how the various cogs in the auto industry wheel fit together. No other Detroit CEO can make a claim like that.
2. She has a long history with GM. Barra -- whose father also worked in the auto industry -- began her career as an intern at GM in the 1980s. She rose through the ranks, most recently serving as the head of product development and quality for all four GM brands. In this day of office-hopping and mergers, institutional memory like Barra's is very hard to come by.
3. She's the first woman to lead a major automaker. Today, in 2013, it's generally agreed that the sex, race, and other immutable characteristics shouldn't have any impact on an employee's qualifications or expectations of how she/he will perform on the job. But the reality isn't so rosy: women, African Americans, Hispanics, LGBT workers, and others constantly find themselves butting against glass ceilings. Picking Barra as GM's CEO makes a great statement and, as an added bonus, draws positive attention to the automaker.
In our opinion, not only is Barra a perfectly qualified candidate, she's also a great figurehead for GM -- one that says the company is willing to do things that other automakers aren't. Put another way, Barra brings loads of experience to the table, and she gives GM a quick makeover in the press. Hopefully, Barra will continue her long string of successes in her new position as CEO.
UPDATE: General Motors has issued a statement confirming the news of Barra's promotion. The first few paragraphs of that statement contain some interesting information:
General Motors today announced that Dan Akerson, who guided today’s GM to record profits and dramatic improvement in vehicle quality while closing the chapter on government ownership in the company, will step down as chairman and CEO on Jan. 15, 2014.
Mary Barra, 51, executive vice president, Global Product Development, Purchasing and Supply Chain, was elected by the Board of Directors to become the next CEO of the company. Barra will also join the GM Board.
Akerson, 65, pulled ahead his succession plan by several months after his wife was recently diagnosed with an advanced stage of cancer.
The Board also named Theodore (Tim) Solso to succeed Akerson as Chairman. Solso, 66, is the former chairman and CEO of Cummins, Inc., and has been a member of the GM Board since June 2012.
We congratulate Ms. Barra and wish Mr. Akerson's wife the best of luck and the speediest of recoveries.