Rebecca Quick and Senior Vice President of Global Market Development of General Motors Mary Barra speak onstage at the FORTUNE Most Powerful Women Summit on October 16, 2013 in Washington, DC. Barra has now been chosen as the company's new CEO.
General Motors has a new CEO today -- Mary Barra, the first woman to head a U.S. automaker. Her appointment was announced just after the federal government said it had sold its remaining stake in GM. The Treasury Department bought nearly $50 billion in shares as part of the bailout of GM, which cost taxpayers $10.5 billion by the time the last share was sold.
There's no doubt GM needed the bailout. It had a reputation for designing cars that few Americans wanted. But the much needed taxpayer money came with a great gnashing of teeth because there were strings attached.
"Big bonuses were frowned upon in a big way," says Jack Nerad, the executive editorial director at Kelly Blue Book.
He says now that GM is out from under the thumb of the U.S. government, it can raise executive compensation, which could help it attract top talent. And the hiring of Mary Barra, a lifelong GM employee, is another sign that normalcy is returning to GM.
"This returns the company to the way it operated during its heyday," says Nerad. But he warns, "you could also look at it as a return to the kind of management that got it into the problems that led to its bankruptcy."
GM most recently has had CEO's with financial backgrounds, ending with the most recent, Dan Akerson who is stepping down. These top executives saw cars as just another financial instrument says Nerad. Mary Barra on the other hand, is a car person. Her father was a die-maker for Pontiac for 39 years. "Mary Barra certainly understands automobiles in a much deeper way then the typical business executive would," Nerad says. "So I think that bodes well because it is a product driven industry. Good products win overall."
Today at the Detroit Athletic club, finalists for the 2014 North American Car and Truck of the Year were announced. GM had six of the 24 entries. "That's huge. Ford has none," says Edmund's analyst Michelle Krebs, who attended the event.
Three of GM's vehicles ended up among the six finalists. Krebs says GM is doing what other successful automakers have done for decades, offer compact fuel efficient cars.
"You know, General Motors and Detroit automakers were never known for building great small cars. But they are now."