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Out of the Bailout, New CEO: It's a Good Month for GM

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On: Wed, Dec 11, 2013 at 1:36PM | By: Elizabeth Puckett

Out of the Bailout, New CEO: It's a Good Month for GM

It’s been a great year for GM, including things like the success of their new Stingray and multiple quality awards symbolizing the end of the looming reputation of offering substandard products during the recession. This week, the company has been on fire with headline making success and company changes. Here’s what’s going on with GM of late.

Government Motors No More
The world learned Monday that the government bailout of General Motors has officially ended. The Treasury Department sold its final stake in GM, closing the book on its 2009 bailout of the auto industry. This sale ends a dark chapter, one auto makers have hopefully learned much from, and allows GM to shake the stigma as being Government Motors.

Since the bailout, the government has held about 60% of the shares for GM and the deal cost tax payers around $10 billion—but Jacob Lew, the Treasury Secretary, assures that the final share sales puts the tax payers back in the black. The Treasury Department has recovered $433 billion from the Troubled Asset Relief Program after initially investing about $422 billion.

GM will certainly win back customers that disapproved of the company taking bailout funds to financial collapse of the company. This deal lead to the end of Saturn and Pontiac, and also meant huge cuts within the company and for their dealers.

Post-bailout, GM is a much smaller company, but has been able to become more competitive with both Ford and Toyota. It’s also had 15 profitable quarters in a row and earning are strong in the North American market.

New Face of GM
Mary Barra has been officially named the CEO of General Motors—that makes her the first female CEO of a major auto company. This announcement came the day after the Treasury Department's sale of final shares of GM stock, but that’s not why the company made the change. The CEO on the way out, Dan Akerson, is stepping down due to a family health crisis. The rise of Barra is an inspiring story as she climbed the ranks from the factory floor.

The new CEO is a true car person who has had her hand in the making of the 2014 Chevy Silverado and GMC Sierra, the new Cadillac CTS, and even the new Corvette while she was the head of global product development. GM CEOs of the past have typically come from the world of finance, so her gender isn’t the only symbolic change.

While it’s hard to ignore that she’s the first female in the role, Barra has the credentials to show that talent got her in the position, not gender. Although her gender could be an advantage for GM as 52% of automobile purchases are decided by women, it will be interesting to see if having a woman as a CEO sways females to the brand.

This isn’t the first woman of power in the GM ranks—Helen Emsley headed a design team that was in charge of the new Corvette’s interior. Experts think that was a winning choice—the female touch in the design has undeniably made the car more popular among the gender as well as younger drivers.

2014 could be the year of the GM car with these new changes. It will be exciting to see what direction the brand moves in and what new models & technologies could spur from their new leadership and freedom from the bailout.


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