* Akerson accelerates exit after wife's cancer diagnosis
* CFO Ammann named president, ex-Cummins CEO named chairman
* Barra will be GM's fifth CEO in less than five years
* Barra's task is to complete turnaround begun under Akerson
By Ben Klayman
DETROIT, Dec 10 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 No. 1 U.S.
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
GM said on Tuesday that Akerson, who is also the chairman,
will leave on Jan. 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
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
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
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
"The key to General Motors' long-term success is great
products," Barra said in a video posted on the company's website
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
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