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GM CEO could exit in 2014; no formal search yet: Sources

GM CEO Dan Akerson
Arne Dedert | AFP | Getty Images

General Motors Chief Executive Dan Akerson could step down as early as next year though he has not formally notified the board of his plans and an official search for his successor has not yet begun, according to people close to the matter.

GM's board is not in any rush to see Akerson, 65, leave and has not set a timeframe for hiring an executive search firm to weigh potential internal or external candidates, said one of the sources, who is familiar with the board's thinking.

Speculation about Akerson's exit gained steam in April, when GM disclosed in a securities filing that his compensation plan had changed. The CEO was not awarded any restricted stock units last year "in acknowledgement of the possibility of his retirement before the completion of the three-year vesting period," which would be in 2015.

Investors have focused on four senior GM executives as the most likely successors to Akerson, with North American operations head Mark Reuss widely seen as the frontrunner. But the board will still launch an official search once Akerson formalizes his plans, said the person familiar with the board's thinking.

"I assume at some point he (Akerson) will decide he has done what he has wanted to do and will step down, but no one has a date for that," said the person, who like the other sources did not want to be identified discussing the sensitive topic.

GM representatives said the company has succession plans in place, but declined to give the details. "We're very comfortable with our succession planning, which we have in place for all our key officers," GM's head of communications Selim Bingol said.

Akerson was appointed CEO just before GM re-entered public markets on November 2010, following a $49.5 billion government bailout and bankruptcy reorganization. As he sets the road map for completing the No.1 U.S. automaker's restructuring, the timing of his departure has taken on added importance to investors.

Executives at GM's partner Peugeot believe Akerson will most likely hand over the reins next year, and certainly not stay beyond 2015, according to people with knowledge of talks that the French car maker had with GM earlier this year.

Akerson has not publicly addressed the timing of his exit. In January, when asked that question, he only said that he would be running the company at the same time in 2014.

To-Do List

Under Akerson, GM has moved to eliminate some of its historic bureaucracy and inefficiencies, recovered its investment grade credit rating, and started on the road to ending financial losses in its European business. The U.S. Treasury is also expected to sell its remaining shares in GM early next year, if not sooner.

As Akerson has ticked a lot off his to-do list, analysts said the succession issue will be the biggest question for GM to address in 2014.

"The drumbeat of this question has only grown louder," Guggenheim Securities analyst Matthew Stover said. "Dan stepped into the job as a reluctant CEO, and that started the clock."

Former GM CEO Ed Whitacre resigned just before the IPO in 2010, when he was 68, saying he was not going to be with the company for the long-haul. Then a board member, Akerson accepted the CEO job - in doing so he gave up a potentially lucrative stake in private equity firm Carlyle Group, which went public in 2012.

Investors are not in any rush to push out Akerson. One top 20 GM shareholder, who asked not be identified, said the CEO has done an "extraordinary" turnaround job and the preference would be to continue his strategy by appointing an internal candidate to succeed him.

In addition to Reuss, who is 50, the other GM executives seen as potential CEOs are global product development chief Mary Barra, 51; Vice Chairman Steve Girsky, 51; and Chief Financial Officer Dan Ammann, 41.

For many GM watchers, the next CEO will need to focus on product, given slowing growth in the U.S. market and intensifying competition in the emerging markets, and that favors Reuss. Former CEO Whitacre suggested Reuss as his replacement before Akerson was picked.

However, Barra is also highly esteemed by Akerson for bringing order to a disjointed vehicle development process. Some GM employees and analysts felt Akerson gave Barra's candidacy a boost in September when he said it was "inevitable" that a woman would one day run one of the U.S. automakers, something that has never occurred before. GM has several women executives in senior management as well as four women on its board.

The person familiar with the board's thinking said GM's succession planning is in early stages and no list of outside candidates exist at this point.

Next Steps

Reuss and Barra, both engineers by training, have been with GM their whole careers, while Girsky and Ammann joined from Wall Street.

Only Reuss has run a business unit, while Barra and Girsky are tackling jobs that could take years to complete, such as reducing costs by cutting the number of global vehicle platforms and ending losses in Europe, respectively.

A former GM executive, who asked not to be identified, predicted the board would split the top job, perhaps naming Girsky the visionary head and Reuss or Barra the hands-on operational executive in the No. 2 position. That approach would allow GM to promote several of the candidates, possibly keeping them from leaving after the succession decision is made.

Clifton Lambreth, a former Ford Motor Co executive and now a consultant for the auto industry, said it would be an effective strategy if GM in fact retained Akerson as chairman and elevated one of the others to CEO.

Jeffrey Sonnenfeld, a professor at the Yale School of Management, said GM could create tension with its four-way race, contrasting it with the smooth transition Ford put in place when it named Mark Fields its chief operating officer, signaling he was the lead candidate to succeed CEO Alan Mulally.

"There's a passing of the baton at Ford," he said. "These four at GM are being set up with a horse race instead of a relay race."

Sonnenfeld said it was ironic given Henry Ford II once told him Ford wanted to emulate GM's CEO succession process. "He thought it was 'as smooth as an assembly line belt."'