Tag Archive | "CEO"

Mary Barra Named New Chairman of GM

DETROIT — The General Motors Board of Directors unanimously elected Mary Barra as its next chairman, effective immediately. She succeeds Theodore Solso, who will serve as the Board’s Lead Independent Director.

“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,” Solso 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 has served as CEO of GM since Jan. 15, 2014, a role she will retain. Solso said that Barra has set a clear vision for the organization over the past two years, formed a strong leadership team from within and outside the company, delivered strong operating results, and led the introduction of breakthrough vehicles and technologies.

“The board has improved the overall governance of the company over the past two years and as lead independent director, I expect to continue to build on this solid foundation,” Solso said. “The board also plans to broaden its active engagement with shareholders as we go forward.”

Prior to becoming CEO in 2014, Barra had served as executive vice president of global product development, purchasing and supply chain since August 2013, and as senior vice president of global product development since February 2011. She was responsible for the design, engineering, program management and quality of GM vehicles around the world.

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GM CEO Barra Received $16.2 Million in 2014 Compensation

General Motors Co Chief Executive Officer Mary Barra, who last year became the first woman to lead a major U.S. automaker, received $16.2 million in 2014 compensation, up 78 percent from her predecessor’s total the previous year, reported Reuters.

Most of Barra’s compensation is tied to stock awards that she cannot cash in yet. She received $4.55 million in salary and other liquid compensation for 2014, GM said in a proxy filed on Friday with the U.S. Securities and Exchange Commission.

Barra, 53, replaced Dan Akerson, now 66, as CEO in January 2014. Akerson’s 2013 compensation was $9.1 million.

Barra was paid $5.2 million in cash and stock in 2013, when her title was executive vice president and she headed global product development.

Detroit-based GM is now linking executive compensation more closely to performance, as other big companies have done, as it moves beyond the more restrictive guidelines it followed after its 2009 U.S. government-led restructuring.

Barra and other top GM executives attained 74 percent of the company’s targets for profit, automotive cash flow and global market share and quality. The quality metric included “customer enthusiasm” and loyalty, as well as warranty expense.

Soon after Barra’s ascension to CEO, GM became embroiled in a massive recall of older vehicles with faulty ignition switches that have been linked to at least 87 deaths. She testified several times before Congress to explain GM’s botched response which included an 11-year gap before the recalls.

GM’s board of directors chose not to award discretionary bonuses to any of its top executives last year.

Ford Motor Co also changed leaders last year as Mark Fields replaced Alan Mulally, who was largely credited with helping Ford avoid the bankruptcies that in 2009 ensnared GM and what was then Chrysler, now Fiat Chrysler Automobiles.

Fields, who became CEO in July 2014, received $18.6 million in compensation for last year, and Mulally was compensated for the full year to the tune of $22 million. Ford Executive Chairman Bill Ford made $15.1 million.

FCA Chief Sergio Marchionne received compensation valued at about $38 million based on currency exchange rates at the end of last year.

GM’s annual meeting will be held on June 9 in Detroit. Shareholders will consider company nominee Joseph Jimenez to join the board. Jimenez, 55, is CEO of Novartis AG.

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Volkswagen’s CEO Gets Backing of Key Shareholders in Leadership Feud

Volkswagen AG Chairman Ferdinand Piech may have lost the battle to oust Chief Executive Martin Winterkorn, but the war isn’t over, reported The WSJ.

Key members of VW’s supervisory board Friday proposed extending Mr. Winterkorn’s contract, one week after Mr. Piech expressed a lack of confidence in the CEO and threw his future into doubt. The supervisory board group, its executive committee, said Mr. Winterkorn was the “best possible” leader for Volkswagen and had its full support.

The committee proposed that the supervisory board extend Mr. Winterkorn’s contract in February next year. The move was welcomed by a major Volkswagen shareholder, the state of Lower Saxony, which holds 20% of Volkswagen’s voting rights and two seats on its supervisory board.

“The committee’s conclusion provides the clarity Volkswagen needs,” state Premier Stephan Weil said. Lower Saxony has confidence in Mr. Winterkorn and wants to continue working closely with him, he said, praising the company’s “excellent development” in recent years.

The backing is seen as a defeat for Mr. Piech, who couldn’t convince the committee to withdraw support for Mr. Winterkorn, according to people familiar with the matter.

Mr. Piech and five other members of the VW supervisory board’s executive committee met with Mr. Winterkorn on Thursday at Mr. Piech’s private estate in Salzburg, Austria, in an attempt to resolve the leadership crisis.

Mr. Winterkorn, 67, had signaled his determination to serve out his term to the end of next year. Late Thursday, he was able to sway members of the supervisory board with his strategic plans, according to a person familiar with the content of the meeting.

But Friday’s endorsement leaves unresolved whether Mr. Winterkorn will eventually become the head of the auto maker’s supervisory board when he finishes his term, as had been planned. Mr. Piech is set to head the supervisory board until the spring of 2017, meaning he could have two years to push his agenda.

Few observers familiar with VW were willing to call Mr. Piech’s setback an absolute defeat.

“Mr. Piech isn’t easily dissuaded from his ideas,” as previous clashes have shown, said Stefan Bratzel at the Center of Automotive Management at Bergisch-Gladbach’s University of Applied Sciences.

It may be business as usual in the near term, said Arndt Ellinghorst at Evercore ISI, but a debate on leadership isn’t likely to subside entirely.

“It seems (Mr.) Piech has lost the battle and an apparent desire for change at the top of VW,” Mr. Ellinghorst said. “What is not clear, however, is whether this puts an end to the war.”

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Nissan CEO Says He Needs More North America Capacity

Nissan Motor Co Chief Executive Carlos Ghosn said on Thursday the automaker needs more capacity in North America to fuel its growth, reported Reuters.

Demand for Nissan Rogue sport utility vehicles can be supplied in the short term from plants in Korea and Japan, but longer term “we obviously need more capacity in North America,” Ghosn told reporters at the New York auto show.

Nissan is driving to boost its market share in the United States to a “sustainable 10 percent” by 2017, he said. Nissan, including its Infiniti luxury brand, had a 9.3 percent share of the U.S. market as of the end of March and Ghosn said it aims to keep growing from there.

He did not lay out a timetable for further expansion of North American production, or say whether Nissan would build new plants or increase production within the factories it has.

Ghosn’s signal of further investment in North America comes at a time when several rival automakers have also spoken of plans to add factories or assembly capacity in Mexico, the United States or Canada.

Volvo Cars, the Swedish luxury brand owned by China’s Zhejiang Geely Holdings, said earlier this week it planned to invest $500 million in a U.S. factory and Korea’s Hyundai Motor Co is considering an expansion of North American production capacity. German automakers Volkswagen AG, Daimler AG and BMW AG have also expanded their U.S. or Mexican production in recent years.

The United States and China are the two largest and most profitable auto markets in the world. As automakers have encountered obstacles in emerging markets such as Russia, India and Southeast Asia, they are turning again toward the United States for growth.

On a separate matter, Ghosn said reworking the capital structure of the Renault-Nissan alliance will “take a back seat” to hitting the targets for operating performance he has laid out for the companies. Nissan, for example, is aiming for 8 percent operating profit margins and 8 percent global market share by the end of its 2016 fiscal year in early 2017.

Some shareholders have pressed for Renault to free up capital now held in its 43.4 percent holding in Nissan. The French and Japanese automakers forged their alliance in 1999, when Nissan was near collapse. Now, Nissan’s market capitalization of about $46 billion is larger than Renault’s, which stands at about $27 billion.

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Ford CEO Fields Received $18.6 Million in 2014 Compensation

Ford Motor Co Chief Executive Officer Mark Fields made $18.6 million in salary and other compensation last year, below the $23.2 million that predecessor Alan Mulally received in 2013, the company said on Friday, reported Reuters.

Last year’s compensation for Fields, 54, was for half the year as CEO and half as chief operating officer. For 2013, he made $10.2 million as COO.

Mulally, who was replaced by Fields on July 1, made $22 million in salary and other compensation for 2014. Ford’s board decided he deserved a full year’s worth of stock awards because the company felt his impact for the full year, a spokesman said.

Earlier this month, Fiat Chrysler Automobiles said its CEO, Sergio Marchionne, received 31.3 million euros (about $38 million at end-2014 exchange rates).

General Motors Co has said its CEO, Mary Barra, would make about $14.4 million for 2014. The company has not yet disclosed her specific 2014 compensation.

Fields, Marchionne and Barra will have their compensation compared with that of unionized assembly line workers ahead of and during this summer’s labor talks with the United Auto Workers.

The Center for Automotive Research last week estimated that Ford labor costs for each of its U.S. union workers averaged $57 per hour, including benefits. Hourly pay is between $15.78 and $28.50 for Ford line workers.

Ford Executive Chairman Bill Ford made $15.1 million in 2014, up from $12 million in 2013.

“We remain absolutely committed to aligning executive compensation with the company’s business performance and to tying a significant portion of executive compensation to long-term shareholder value,” the company said in a statement.

Ford executives are compensated in part on meeting performance targets. The company achieved 91 percent of the targets last year, compared with 112 percent in 2013. It surpassed targets for automotive cash flow, Ford Credit earnings and quality, but missed on automotive revenue and operating profit margin.

The company’s pretax profit in 2014 was $6.3 billion, down from $8.6 billion the previous year, while net income fell to $3.2 billion from $7.2 billion. North American pretax profit in 2014 was $6.9 billion.

Ford shares closed on Thursday at $16.01, compared with $15.25 a year ago.

Ford will hold its annual shareholders meeting in Delaware on May 14.

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Honda Turns to New CEO After Crisis-Filled Era

Honda Motor Co.’s chief executive officer will step aside later this year as Japan’s third-largest carmaker reels from one of the biggest setbacks over quality in its history, reported Bloomberg.

In a surprise announcement on Monday in Tokyo, 61-year-old Takanobu Ito said he’ll hand over the reins to Managing Officer Takahiro Hachigo, 55, after the annual shareholders’ meeting in late June. Ito, the motorcycle-racing engineer who’s led Honda since 2009, said he handpicked Hachigo for his experiences running Honda’s various overseas businesses.

The CEO is ceding his job after leading the company through a tumultuous era that began with a global recession, followed by natural disasters and unfavorable exchange rates. Ito’s successor will face the challenge of navigating Honda past the latest crises, record recalls involving deadly Takata Corp. air bags and flaws with the popular Fit compact car, which have tarnished the company’s reputation for quality.

“Honda just got through its worst-ever period of quality problems,” said Takeshi Miyao, a Tokyo-based auto analyst at researcher Carnorama. “They’re getting a fresh start.”

Honda made the announcement at the 3 p.m. close of trading in Tokyo on Monday, after the carmaker’s stock fell 0.9 percent to 3,928.50 yen, paring this year’s gain to 11 percent.

While Ito will give up his roles as CEO and president, Honda said he will remain on the company’s board and serve as an adviser. Takashi Yamamoto, currently in charge of production, and Yoshiharu Yamamoto, head of Honda R&D, will also step down, according to the company.

Lowered Forecasts

The management overhaul comes weeks after Honda cut its profit forecasts for the second time in as many quarters because of recalls tied to Takata and new hybrid systems installed in the company’s Fit cars and Vezel SUVs. The quality missteps derailed Honda’s plans to introduce new models and led the carmaker to project its first profit drop in three years.

Ito this month also said the company will scrap its target of selling 6 million vehicles by 2017, which he said will ease a burden on engineers so they can focus on quality.
“It does a big favor to his successor,” said Christopher Richter, a Tokyo-based analyst at CLSA Ltd. “That was a sales program that Ito put in place. It’s very appropriate that he was the one then to say that we’re going to step back from that, rather than to have somebody new come in and then say ’oh, we’re not going to do this’ and create an image of discord.”

Chassis Roots

In choosing Hachigo, Ito turned to someone with similar roots. Both started their careers at Honda more than three decades ago as engineers designing chassis, the frame underneath that holds the key parts of a car together.

As an engineer, Hachigo was responsible for high-profile projects such as the U.S.-built Odyssey minivans that were launched in 1999 and the second-generation CR-V SUV that debuted in 2001. He then rose through the ranks with executive roles across the U.S., Europe and China before he was promoted to managing officer last year. Hachigo said he was in China soon after the new year when he learned of his next role. “I was surprised when I received a call from Ito,” Hachigo said in Tokyo on Monday. “I understand this is a major responsibility.”

Hachigo pledged Honda’s past efforts will bear fruit in 2015 and said that the company needs to step up development of products and technologies. He also said he plans to build on Honda’s six regional operations — an organizational structure his predecessor set up to shift Honda away from a U.S.-centric business mindset.
Era of Disasters

While Hachigo will follow the footsteps of a CEO who returned Honda to Formula One in 2015 and brought back the NSX supercar, he’ll also seek to avoid his predecessor’s misfortunes. Under Ito, Honda was roiled by the 2011 tsunami in Japan and mass floods in Thailand the following year. More recently, Ito has been plagued by recalls.

Honda has called back 14 million vehicles worldwide since 2008 to replace air bags made by Takata, in which it has a 1.2 percent ownership stake. Takata’s defective air bags, which can rupture during deployment and propel metal shards at passengers, have been linked to five fatalities in the U.S. and the deaths of a pregnant woman and her unborn child in Malaysia.

While at least nine other carmakers have been hit with air-bag-related recalls, Honda is Takata’s biggest customer. Scrutiny of how Honda responded to the flaws led to the U.S. government slapping the company with a record $70 million fine for failing to report more than 1,700 death and injury incidents to regulators over 11 years.

Air Bags

Honda’s quality problems go beyond air bags. The carmaker has called back the Fit — its top-selling model in Japan — five times since its introduction in late 2013, and recalled its Vezel crossover three times. Those fixes delayed the roll-out of other new vehicles by as long as six months.
As Honda takes steps to address quality shortfalls, Honda’s shares have begun rebounding. This month, the stock has climbed 10 percent through Monday, double the Nikkei 225 Stock Average’s gain.
“We knew this was coming sometime, although it was probably a little bit sooner than we expected,” said CLSA’s Richter. “Maybe this is a good time for a fresh face.”

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