General Motors (GM) on Monday named Chief Executive Mary Barra as the chairman of its board, effective immediately, following a year in which Barra delivered strong financial results, quelled a shareholder uprising and put the worst of a recall scandal behind the automaker.
Barra takes over as chairman from former Cummins Chief Executive Theodore Solso, who will continue serving as the board’s lead independent director, the company said.
GM has over the years swung back and forth on the issue of whether the CEO and chairman’s jobs should be held by different people. In the early 1990s, after a close brush with financial collapse, GM’s board separated the two jobs in a move hailed by corporate governance experts.
Barra’s predecessor, Dan Akerson, held both titles.
Barra’s appointment as GM’s chief executive in 2014 made her the first woman to lead a major automaker. But almost immediately upon taking over, Barra was hit with the fallout from a scandal over long-delayed recalls of GM cars with a potentially deadly ignition switch defect.
Much of her first year as CEO was spent dealing with that crisis. Among other moves, Barra agreed to set up an independent fund to compensate victims of accidents involving cars with defective switches.
GM in September paid $900 million to settle a Justice Department criminal investigation. Experts said Barra’s decision to bring in an independent investigator and take a number of steps to overhaul GM’s handling of safety problems and provide more information to regulators helped limit the size of the penalty.
In early 2015, a shareholder group challenged Barra over GM’s management of its growing cash hoard. Barra reached a deal in March under which GM agreed to return $10 billion to shareholders in stock buybacks and increased dividends by the end of this year and commit to hitting certain financial targets, including generating a 20 percent return on invested capital.
In October, GM reported record third-quarter profits and projected it will hit its major financial targets for the year, including a 10 percent profit margin in North America. Booming U.S. sales of trucks and sport utility vehicles have helped GM weather weak results in Latin America and Europe and a slowdown in China.