General Motors Co. CEO Mary Barra was named chairman of the automaker’s board of directors in a unanimous vote by the board Monday, indicating it is strongly behind Barra as the company’s leader and approves of her strategies for driving the business forward. She is believed to be the first female chairperson of an automaker.
The move comes two years after Barra, 54, took over as the company’s CEO on Jan. 15, 2014, rising from an intern on the factory floor to become the auto industry’s first female chief executive. Soon after, Barra navigated the company through a crisis over the delayed recall of ignition switches ultimately linked to 124 deaths.
Barra will succeed Tim Solso on the board immediately. Solso, the former CEO and chairman of diesel-engine manufacturer Cummins Inc. and a GM board member since June 2012, will continue as the board’s lead independent director.
Elevating Barra to chairman shows the board trusts her and has a great deal of confidence in her and her leadership, says David Cole, chairman emeritus of the Center for Automotive Research, and founder and chairman of the nonprofit AutoHarvest Foundation.
“It’s not a surprise. And I think with the excellent job she has done and with the team behavior we kind of see ... how well she works with people like Mark Reuss on the product side, it just makes a great deal of sense,” Cole said Monday. “She’s a very good leader.”
Cole told The Detroit News in December 2013, when Barra was named CEO but not chairman, that it was a smart move to separate the chairman and CEO jobs at that time. He said Barra did not yet have experience with the board and dealing with board issues, and needed to focus on the company internally.
GM President Dan Ammann said in a Monday interview that the naming of Barra as chairman is important for the company and for Barra.
“I think it’s a strong statement about where the company is at today, and the strong position we’re in,” he said. “And it’s a strong statement about Mary’s leadership over the last couple of years.”
Under Barra’s watch, GM’s profits have risen, despite a slowdown of sales in China and South America. And the company has set a direction as an innovator: On Monday, it announced a $500 million investment into the ride-sharing company Lyft Inc., and Barra will reveal the production Chevrolet Bolt all-electric car this week at a technology trade show in Las Vegas.
Solso said in a statement that Barra has established a clear vision for the automaker, has led the company to strong operating results and has formed a strong leadership team. The two worked closely together on strategies such as GM’s ongoing cultural change during the ignition switch crisis, and Solso advised Barra and her team when needed.
“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,” he said. “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.”
Barra, in a statement, said she is honored: “With the support of our board, we will continue to drive shareholder value by improving our core business and leading in the transformation of personal mobility.”
GM has in the past combined its CEO/chairman roles, though at times the board and company have opted to split the duties. For example, Kent Kresa led the company as chairman for a few months in 2009 while Fritz Henderson was CEO before Ed Whitacre took over as chairman. Whitacre later assumed the CEO role, too.
Solso took over the chairmanship of the company’s board following the departure of former CEO and Chairman Dan Akerson. Akerson took over as CEO in September 2010 and assumed the chairman role in January 2011.
Some investors prefer to have a split chairman and CEO to diffuse the power of one person, and have pressed for changes in some companies.
In a regulatory filing late Monday, GM said the board knows it is important to have strong independent leadership, and it believes Solso — its independent lead director — will continue that, plus provide “oversight and other benefits to the company.”
GM last year faced demands from an activist investor who wanted a seat on GM’s board of directors and for the company to buy back $8 billion in stock; the company ultimately opted to buy back $5 billion in company shares and Harry J. Wilson withdrew his request for a board seat and a shareholder proposal.
Solso said the board has improved the governance of the company and plans to “broaden its active engagement with shareholders as we go forward.”
GM stock closed down Monday 2 percent to $33.31 a share.