This past week included two major highlights for General Motors Co. The first highlight is that the U.S. government sold its last shares of GM, stemming back from the shares acquired in the government-led bankruptcy of GM in 2009. The second highlight is that GM has named its first female CEO, Mary Barra, smashing a century-old gender barrier in the auto industry for this position.
When the government sold its last shares of GM this past Monday, they did so for a loss of $10.5 billion. However, this move clears the way for GM to return cash to shareholders. Many consumers were left alienated by the bailout GM received in 2009. President Obama called the rescue of GM a success, pointing to strong profits and the 372,000 new jobs that were created in the U.S. auto business over the past five years, according to The Wall Street Journal.
The sale of the final owned shares by the U.S. Treasury marks the conclusion of a humbling chapter in the history of GM. Furthermore, the sale marks the potential end to government involvement in GM’s affairs.
Current CEO Dan Akerson said in a statement, “The U.S. Treasury’s ownership exit closes just one chapter in GM’s ongoing turnaround story. We will always be grateful for the second chance extended to us, and we are doing our best to make the most of it.”
The government’s departure now opens GM to new pressures from activist investors who may want GM to begin returning money to them through dividends, stock buybacks or both, according to the WSJ. These will be pressures that newly named CEO Mary Barra will have to accommodate.
“With an amazing portfolio of cars and trucks and the strongest financial performance in our recent history, this is an exciting time at today’s GM,” Barra said in a statement Tuesday morning. “I’m honored to lead the best team in the business and to keep our momentum at full speed.”
Barra will succeed Akerson as CEO next month. She will become the 22nd woman currently running a Fortune 500 company. This move also makes GM the largest company, by revenue, run by a female CEO.
“You have to have the executives with the right experience to take on the responsibility,” said former Ford Motor Co. chief operating officer Anne Stevens. “It takes years to have the right experience and to have the track record on which to base the decision.”
This statement points to Barra’s 33 years of experience with GM, starting as a college intern and eventually becoming an engineering manager before running one of GM’s big U.S. assembly plants, according to the WSJ.
GM also restructured its top executive ranks when naming Barra as CEO, splitting the role of CEO and board chairman, and shifting finance chief Dan Ammann to president, overseeing global operations.
The post currently held by Barra, head of worldwide vehicle development, will be taken over by Mark Reuss, who is currently the head of North American operations. GM’s image makeover brings with it a new sense of accountability for company goals, and investor confidence.
Information from The Wall Street Journal and Forbes was used in this article.