Mary Barra named the next CEO of GM

For the first time in history, a woman will lead one of the 3 great American automakers when she takes the helm of General Motors where she currently serves as the Executive Vice President of Global Product Development, Purchasing and Supply Chain.

That woman is Mary Barra.

Mary Barra’s career at GM started in 1980, when she went to the Pontiac division as a “co-op student” through General Motors Institute, now Kettering University. She earned a bachelor’s degree in Electrical Engineering and in 1990, earned her MBA from Stanford University through a GM fellowship. She had been with the company ever since, steadily rising through the ranks.

This article by USA Today aptly describes why this is such a good move by GM.

For much of its history, the auto industry has been a guy thing — a fraternity of male engineers and executives more excited by Mustangs than minivans, more interested in horsepower than highway fuel economy.

While that might seem perfectly normal given the industry’s affiliation with auto racing, women actually make the majority of car-buying decisions. By some estimates they are the principal decider in 80% of vehicle purchases in America.

So General Motors’ decision to make 51-year-old Mary Barraits first female CEO, while groundbreaking to be sure, might best be seen as a bow to reality, a strategic decision by the company to get closer to its customers.

The milestone, however, might never have happened as a natural evolution. It took a complete rethinking of the company in the wake of its 2009 reorganization to bring it about.

This is true in a direct sense because current CEO Daniel Akerson, in his determination to bring change to the executive ranks, plucked Barra out of a job often staffed by women (head of human resources) and put her in the more upwardly mobile post of product development chief.

It’s also true in a more general sense, because the pre-bankruptcy GM simply couldn’t afford to care much about the types of cars that women wanted. The company was so bloated and inefficient that it could only make money off of cars with huge markups — big SUVs and pickups, full-sized sedans and muscle cars. Now the company is efficient enough to invest heavily in models of all sizes and shapes.

It’s an important lesson. Sometimes what a company needs is not a new and different CEO, but a new and different company. The CEO will come as a matter of course.

This lesson could be applied in other industries, most notably finance, where women are in short supply as CEOs and senior executives at major institutions.

That’s a problem. One of the major causes of the financial crisis of 2007-09 was a shift away from a client focus at major institutions to one of quick profits from trades and complex transactions. This shift flourished in a testosterone-fueled culture, one chronicled in best-selling author Michael Lewis’ first book, Liar’s Poker, which describes major bond traders going by a moniker derived from the male anatomy.

A remade financial services industry, one rededicated to client services, would make for a more stable banking system. It would be less contemptuous of shareholders and taxpayers. And, inevitably, it would have more women in top positions.

Female CEOs are still relatively scarce. In the Fortune 500, there are only 22 (not including Barra), which comes to 4.4%. This reflects, among other factors, societal attitudes and the decision by many women to take time off for parenthood. Yet often it reflects a corporate culture stuck in its ways and averse to change. 

Congratulations to Mrs. Barra! I look forward to seeing what direction she will take GM under her leadership and I wish her absolute success in her new role.

Facebook to file for IPO on Wednesday, Feb 1st

Mark Zuckerberg, probably one of the coolest people on the planet, is about to become the 23rd richest person on Earth.

Not too bad for a 27 year old!

The Wall Street Journal is reporting that Facebook Inc., the world’s uber giant social-networking site, is aiming to file for its IPO as early as Wednesday, February 1st, 2012, though timing of the filing is still being discussed and might change.

The company is discussing a valuation of $75 billion to $100 billion and the IPO would provide funds to help Facebook maintain its expansion and fend off competition from Internet rivals such as Google and Twitter Inc. The company has discussed raising $10 billion in the offering, and supposedly, Facebook plans to set its price at the low end of the valuation range to entice investors and ensure the stock rises after the IPO.

Morgan Stanley and Goldman Sachs are rumored to be orchestrating the deal.

The hype behind Facebook’s IPO is huge, but is it worth it? Social media IPOs have not faired well in recent times. In fact, something around 80% of such IPOs are now trading below their offering price or near it (Groupon comes to mind). Furthermore, when you invest in a company, you are banking on their potential to grow. Can Facebook possibly grow any bigger? Perhaps, but I think they are very close to maxing out on growth (users).

However, the stock does look promising. Facebook’s hype is HUGE as I mentioned, so especially if they do end up employing the strategy of pricing low at first, many people will partake in the IPO, thereby driving up the price. There has also been a lot of work on top line revenue growth which is projected to gain some traction (though many people would never pay a dime to use facebook, they are finding other avenues, such as advertising, to capitalize).

Will you be buying (stock price is speculated around $40)? Despite the cautionary flags, I am a Facebook fan, and I do have a strong inkling Facebook will take off just like Google did when it first IPO’ed, so yes, I will be drinking the Facebook kool-aid and will purchase a few shares. I just won’t be putting my life savings into it.

Rosalind Brewer named CEO of Sam’s Club (Walmart)

I recall the moment I found out Ursula Burns had been promoted to CEO of Xerox Corporation like it was yesterday. As one of the very few African American women at the top of the corporate ladder, I had long admired Ms. Burns. Finding out she was going to become the first African-American woman to run a Fortune 500 company came as great news to me, almost sort of like an adrenaline rush. As cheesy as it may sound, I recall breathing a sigh of relief  and saying to myself, “the ceiling has been broken..”.

But it would take 2-3 years before another African-American woman would successfully break that ceiling as well.

Rosalind Brewer

Yesterday, Walmart announced that Rosalind Brewer has been named CEO of Sam’s Club, making her the first woman and the first African-American to hold a CEO position at one of the company’s business units.

Mrs. Brewer comes very well qualified for the job. She holds a B.S in Chemistry from Spelman College and attended the Advanced Management Program at the Wharton School of Business, University of Pennsylvania. In addition, she graduated from Director’s College at the University of Chicago School of Business and Stanford School of Law.

Career wise, she has held various positions at Kimberly-Clark where she initially started as a scientist and worked her way to becoming a VP. She joined Walmart in 2006 as VP of Georgia Operations and became Divisional President for the Southeastern Operations. In 2011 she was promoted to EVP and President of Walmart East Division were she was responsible for a $100 billion book if business. And now, she has been named the CEO of Sam’s Club.

In addition, she sits of the Board of Directors for Lockheed Martin, Board of Trustees for Spelman College, Board of Trustees for Westminster Schools (Atlanta), Board of Councilors for the Carter Presidential Center and was on the Board of Directors of the Molson Coors Brewing Company from 2006 to 2011.

In 2010, she was named one of CNN’s FORTUNE Magazine “50 Most Powerful Women”.

Mrs. Brewer is a force to reckon with indeed!

I am incredibly proud of what she has and continues to accomplish and I hope her appointment serves as an inspiration to women (not only African American), that the ever so elusive CEO position is attainable after all.

I’m inspired. :)

 

Karl Lagerfeld to launch two new lines next year

Now here’s something to forward to!

According to Yahoo News:

The German multitasker will release two new ranges in January designed to relaunch his namesake brand.

Set to launch during haute couture week in Paris, a 100-piece collection simply named Karl will become available on designer shopping site Net-à-Porter.com. But as opposed to much of the e-store’s usual offerings, the range will retail at affordable prices, ranging from €60 to €300.

Besides designing for Chanel, the designer recently demonstrated his “love for the masses,” collaborating with budget retailers including Macy’s, while putting his own label on hold for a year.

Those prices are very attractive, for a semi-high end line. I’m sure it will sell out like hot cakes on National Free Pancake Day.

Congratulations to the St. Louis Cardinals

I’m going to swallow my pride and give props where it’s due. The Cardinals deserved to win it this year. The Yankees did not.

Congrats to the team who battled, played with heart and persevered. I know St. Louis must be crazy right now… I was in St. Louis at the start of the series and the excitement in the air was contagious. Literally everyone was talking baseball and so proud of the home team. I feel very excited for them.

Obama Unveils Plan to Ease Burden of Student Loans

Not quite the forgiveness of student loans that the petition floating around the web is calling for, but some relief may be ahead.

 

Highlights.

  • Under the plan, Americans would be able to consolidate and reduce interest rates on their student loans.
  • The start of a program approved by Congress that caps monthly student-loan payments for borrowers with low incomes will be moved from 2014 to 2012.
  • The centerpiece of the plan would allow the estimated 5.8 million people who hold both direct government student loans and government-backed private loans to consolidate their debts into one government loan.
  • Speaking to a largely student crowd at the University of Colorado Denver, Mr. Obama said neither he nor his wife, Michelle, grew up with much money, and when they finished law school, they had about $120,000 in combined student debt.
  • Repayment would be capped. Currently, rules allow graduates to limit payments to 15% of their income, with all debt forgiven after 25 years of payments. Congress has changed the program to allow borrowers in 2014 to pay 10% of income, with loans forgiven after 20 years. Under the changes, the program will start next year, not 2014.
I’m going to wait until this goes in effect first before I pop the celebratory bottle of Apple Cider.