General Motors hands top job to Mary Barra

Tuesday 10 December 2013 18.28
Mary Barra becomes the first female CEO of a major US car company
Mary Barra becomes the first female CEO of a major US car company

General Motors has said its chief executive Dan Akerson will step down next month and be replaced by Mary Barra, the company's global product development chief.

This marks the first time a major US car company has been led by a woman.

The company said that Akerson, who is also the chairman, will leave on January 15, pulling ahead his planned departure by several months. His wife was recently diagnosed with an advanced stage of cancer.

Barra, 51, the executive vice president for global product development, purchasing and supply chain, was elected by the company board as the next CEO and will become a director. 

US exits GM stake in $10 billon loss for taxpayers

The US government has sold its last shares of car maker General Motors, marking an end to a historic bailout of one of America's most famous companies.

The sale leaves taxpayers short about $10 billion of the funds that the Treasury sank into the company in 2009.

Washington came to the rescue of the US car sector during the darkest days of the country's 2007-09 financial crisis, as the nation was sinking further into what would become its deepest recession since the Great Depression.

"This important chapter in our nation’s history is now closed," US Treasury Secretary Jack Lew said.

The money pumped into the industry came from a $700 billion pool of funds Congress had assembled to shore up the banking system and fight a growing panic on Wall Street.

Taxpayers could still turn a profit from those rescue efforts, despite losses on programmes to help housing and cars.

The government took a loss of more than $1 billion on its investments in Detroit automaker Chrysler, while taxpayers remain intertwined with GM's former lending arm, Ally Financial.

But the car bailout helped Detroit's carmakers return to profitability, and a study released by the Center for Automotive Research said it saved 1.5 million US jobs and preserved $105.3 billion in personal and social insurance tax collections. 

America's largest automaker, General Motors was seen for generations as a symbol of the country's industrial prowess. The crisis, however, humbled the firm and it briefly entered bankruptcy in 2009.

"We will always be grateful for the second chance extended to us and we are doing our best to make the most of it," outgoing GM Chairman and chief executive Dan Akerson said in a statement.

The company is currently benefiting from rising consumer demand in the US. Across the US car market last month, Americans bought vehicles at their fastest pace in over six years.

GM recorded a profit of $4.3 billion for the first nine months of this year. Shareholders have also profited, although gains in the company's shares since its 2010 public offering have trailed far behind a broader stock market rally.

With the government's exit, GM will now be allowed to pay dividends for the first time since the IPO. GM also may be able to offer a more generous and competitive compensation package if its board elects to search for outside candidates to succeed Akerson.

And over the coming years, the closing of the bailout chapter might help the company lose some of the stigma from taking $49.5 billion in government money.