Auto adviser: Barra’s rise to GM chairman ‘tone-deaf’
Harry Wilson, a former Obama administration auto adviser who last year pressured GM to buy back billions in stock, said Thursday that the Detroit automaker’s naming of Mary Barra as chairman in addition to CEO is “remarkably tone-deaf.”
Wilson, speaking at the Automotive News World Congress in Detroit, said the chairman job is to be completely focused on the board of directors, and it will be hard to do that and focus on running the company as CEO.
“I think Mary’s doing a great job,” Wilson said. “The chairman role is a different job. ... To get the best out of the role, the chairman of the board should do the best job maximizing the knowledge base of those members, and that’s a distraction I think Mary doesn’t need.”
Last year, an activist investment group sought to have Wilson elected to GM’s board. Wilson wanted the automaker to repurchase $8 billion in stock by mid-2016. He said at the time he felt GM was holding on to too much cash and felt a buyback would boost the value of the remaining shares. Wilson’s move last year was the biggest challenge to GM’s board and management since billionaire investor Kirk Kerkorian bought 9.9 percent of the company’s stock and tried to force an alliance with Renault-Nissan in 2006.
GM eventually announced a $5 billion buyback through 2016. On Thursday — hours before Wilson’s comments — GM’s board approved boosting the company’s common stock buyback program to $9 billion through 2017.
“Our focus was really on how do you build a really great long-term General Motors,” Wilson said. “They have an enormous amount of investment taking place, so (Thursday’s announcement) is just a function of having substantial cash flow.”
GM’s stock price closed Thursday up 19 cents to $30.49 a share. GM’s stock, as well as Ford Motor Co.’s, have not performed as well as many had hoped recently. Wilson says Wall Street misunderstands the companies.
“The market fundamentally misunderstands how different these businesses are than they were pre-crisis,” he said.
Wilson’s speech touched on the importance of having a good corporate governance structure. The core problem surrounding auto industry scandals the past few years have been poor governance. He said companies need to have smart goals, centered around good product as opposed to chasing market share or sales. Wilson said that was the case with Old GM, before its bankruptcy. Wilson played a key role, under Obama’s auto task force, of reorganizing the company into the New GM.
“I’ve never seen so many great people work so hard and then still fail,” he said. “You need the right governance.”
Detroit News Staff Writer Melissa Burden contributed.