Tag Archive | "Mary Barra"

General Motors Names New Vice President of Global Quality

DETROIT — General Motors Co. has named Tony Francavilla as vice president of global quality, according to a company announcement. In his new role, he will be responsible or leading the company’s global quality efforts, aimed at providing customers with the highest quality vehicles.

“We intend to earn customers for life by delivering exceptional quality,” Mary Barra said. “Tony’s diverse technical expertise and global leadership experience position him well to further accelerate GM’s progress in every aspect of vehicle quality.”

Francavilla began his career with GM in 1979 as a co-op student. Before receiving this promotion, Francavilla served as the executive director of global supplier quality, according to the company.

Francavilla will report to Mary Barra, chairman and CEO of GM.

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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 Confident About Value of Company’s Stock

General Motors Co’s chief executive said on Monday she is confident the company will convince investors of the value of holding on to GM’s stock, which has dropped nearly 9 percent since mid-March despite a $5 billion share buyback plan, reported Reuters.

The automaker’s shares have declined as investors are concerned the U.S. auto cycle has peaked, analysts said. The company makes its profit in North America and in China, where margins are likely to be squeezed.

“This is a business that is not made on a quarter-by-quarter basis,” CEO Mary Barra told reporters at a roundtable interview at GM’s assembly plant in Kansas City, Kansas.

“We just need to continue to have strong performance, which we did in the first quarter, quarter after quarter, year after year, focus on the right products, the right technology, quality and our customers and over time, we will earn that reputation.”

Barra spoke at the Fairfax Assembly plant, where she led a celebration to mark the company producing the 500 millionth vehicle in its history.

Alan Batey, GM’s North American president, told Fairfax workers and Kansas politicians that the company will invest $174 million in the plant for new equipment and technology to produce the 2016 Chevrolet Malibu midsize sedan. That vehicle will go on sale later this year.

The investment is part of GM’s plan to spend $5.4 billion at its U.S. plants over the next three years.

GM shares were up 0.5 percent at $35.58 on Monday afternoon. That compares with $33 at the post-bankruptcy initial public offering in 2010. GM announced the $5 billion share buyback in March to appease frustrated investors.

Barra said she has not met with Fiat Chrysler Automobiles Chief Executive Sergio Marchionne and that GM will continue to follow its own plan regarding investing in product development.

She also said GM will continue to work with partners in particular areas, such as Honda Motor Co for fuel cell development and SAIC Motor Corp Ltd in China.

Barra declined to discuss U.S. labor costs in detail. The company and the United Auto Workers union enter contact talks this summer.

“We’re going to work very hard in constructive problem-solving with our union partners to make sure we have agreements that are good for the company, good for the workers, allow us to maintain our competitiveness,” she said.

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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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GM CEO Mary Barra Brushes Off Merger Talks

DETROIT – General Motors CEO Mary Barra said the automaker has a comprehensive plan in place through the early part of the next decade, and a merger with a large, competing automaker does not appear to be part of that, reported MLive.

Speaking in a conference call Thursday morning to discuss the Detroit company’s first quarter financial results, Barra was asked about Fiat Chrysler CEO Sergio Marchionne’s remarks on the possibility of merging with a large automaker, such as GM or Ford Motor Co., and about general chatter on the need for consolidation in the industry.

Barra said the plan GM currently has in place includes “plenty of areas for efficiency,” and that the company is already one of the top-tier, global OEMs. The company’s plan includes several milestones to ensure it remains at the top.

“We’re not going to entertain anything that’s going to distract us from accomplishing that,” Barra said.

Marchionne, who led Italian automaker Fiat SpA’s merger with Chrysler Group, said in March during an interview with Bloomberg News in Geneva that he would be open to combining the company with one if its larger Detroit rivals.

He called a combination with GM or Ford “technically feasible,” and said there’s always banter to that effect, but added that there is still “nothing substantive.”

At that time, both Ford and GM generally balked at the notion.

General Motors on Thursday reported net income of $945 million for the first quarter of 2015. That compares to net income of $108 million for the Detroit automaker in the comparable period one year ago.

The result came on revenues that dipped to $35.7 billion from $37.4 billion in the year-ago quarter.

Ford plans to report its first quarter results April 28, and FCA is set to do the same on April 29.

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GM Sets Buyback, Placating Activists

General Motors Co. on Monday became the latest company to return billions of dollars to shareholders amid tussles with investors over how to better allocate corporate cash, reported The WSJ.

Facing a potentially contentious fight over a board seat and a larger buyback, the car maker tried to walk the line between placating big investors and spending more on its future.

GM disclosed a $5 billion stock repurchase, a sum that comes on top of a previously announced dividend increase, and an additional $9 billion it will spend this year to improve brands including Cadillac, boost fuel efficiency and develop electric and driverless cars, among other things.

GM’s decision highlights a dilemma facing many companies as activists cement their toehold in boardrooms: Who is better at determining the appropriate use of cash as corporate balances grow?

Some data suggest activists discourage companies from investing in their businesses, something many activists would readily admit, citing wasteful spending.

Companies in the S&P 500 targeted by activists between 2003 and 2013 reduced their spending on plants, equipment and research to 29% of their cash from operations in the five years after activists bought their shares from a median of 42%, according to an analysis conducted for The Wall Street Journal by S&P Capital IQ’s Quantamental Research unit.

That compares with the much smaller drop to 25% from 27% for nontargeted companies over the same period.

Meantime, corporations targeted by activists boosted dividends and stock repurchases to a median of 37% of operating cash flow in the first year after being approached by activists, from 22%. S&P 500 companies that weren’t targeted by activists showed a 10-point increase, to 36%.

“Companies only have a finite amount of cash,” said David Pope, a managing director at S&P Capital IQ. “If they spend it on shareholder returns, there is less cash to spend on everything else.”

GM made its buyback decision after top officials determined its $25 billion in cash was more than enough to fulfill spending plans and handle uncertainties like the federal investigation into a botched ignition-switch recall. People familiar with the decision said a buyback already was under consideration and investor talks sped it up.

“We believe an initial $5 billion share buyback is good for our owners because we cannot earn better returns by investing that cash in the business at this time,” GM finance chief Chuck Stevens said on a conference call.

Separately, on Tuesday, some large investors and corporate chiefs are gathering in New York to debate the social and economic impact of rising shareholder pressure.

The nation’s largest auto maker had come under fire from Harry Wilson, a former architect of GM’s federal bailout, who wanted an $8 billion buyback and had the backing of four hedge funds in his bid to get a seat on the company’s board.

“Capital allocation is an underappreciated discipline,” Mr. Wilson said in an interview on Monday.

“When activism works well, one of the things it does is try to create a disciplined framework around this decision.”

GM had said last month that it would discuss more capital returns later this year.

The company was waiting for clarity around any fine the Justice Department might levy as well as other litigation that may result from a massive recall due to faulty ignition switches, the people said.

Mr. Wilson and the funds have dropped the request for a board seat in light of the buyback and GM’s pledge to better explain its spending and goals.

GM stock rose 3.1% to $37.66 in 4 p.m. New York Stock Exchange trading on Monday.

Not all investors were excited. James Potkul, a Parsippany, N.J., investment manager who controls about 10,000 GM shares, said the auto maker should instead marshal its cash to protect against uncertainties. “Are they worried about a downturn? They should be,” he said. “These companies can burn cash pretty badly when a downturn comes.”

How and when to use capital will be the topic of debate when the group of prominent investors and executives calling itself Focusing Capital on the Long Term meets in New York.

As a sign of the issue’s weight, U.S. Treasury Secretary Jacob Lew is expected to discuss how public policy can support the goals of the group’s members, including chief executives such as BlackRock Inc. ’s Laurence Fink , Unilever PLC’s Paul Polman and Barclays PLC Chairman Sir David Walker.

Elliott Management Corp., a New York-based hedge fund, last year started criticizing networking-equipment manufacturer Juniper Networks Inc. for spending $7 billion on acquisitions and nearly $8 billion in research and development while its stock price greatly underperformed the Nasdaq Composite Index since the company’s 1999 initial public offering.

Last year, after settling with Elliott to change the board, Juniper cut spending and repurchased $2.3 billion of stock. It plans to buy back almost $2 billion more through 2016.

The company paid its first-ever dividend and borrowed money to fund some of the returns.

“The Juniper share repurchase and cost-cutting efforts are the largest contributor to the stock staying stable,” said Scott Thompson , an analyst with Wedbush Securities.

At the same time, he warned that continued cuts could eventually hamper Juniper’s ability to keep pace with innovation in the industry.

Some efforts haven’t garnered the same praise. In early 2012, New York investment firm Clinton Group Inc. took a stake in teen fashion retailer Wet Seal Inc. and began urging a share buyback. By February 2013, the company disclosed it was cutting jobs and expenses and would repurchase $25 million of stock after appointing four Clinton representatives to its board.

This January, Wet Seal closed two-thirds of its stores and filed for bankruptcy protection.

In court documents, executives cited a broader drag on teen retailers as well as missteps that alienated core customers. People familiar with the bankruptcy say that in hindsight the buyback was a bad decision.

“If we had rewound and said they hadn’t done the buyback, that would have given them substantially more flexibility,” said Jeff Van Sinderen, an analyst at B. Riley & Co. “In those situations, $25 million dollars can go a long way.”

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