GM Faces Some Tough Choices as It Searches for a New Finance Chief

By Nina Trentmann 

General Motors Co. faces a variety of challenges as it looks to recruit a new chief financial officer following the unexpected departure of incumbent Dhivya Suryadevara.

Chief Executive Mary Barra and GM's board of directors have to decide whether they want an internal successor -- with deep automotive and company knowledge -- or an outside candidate, potentially from the technology sector, recruiters and analysts said.

GM in recent years has shifted its focus toward electric and autonomous vehicles and pledged to spend billions of dollars to expand these businesses. But, it is facing competition from the likes of Tesla Inc. as well as other U.S. car makers such as Ford Motor Co. The company is also under pressure to reduce costs and streamline processes as new vehicle sales lag due to the coronavirus pandemic and the economic downturn.

The Detroit, Mich.-based auto maker on Tuesday named John Stapleton, the finance chief of its North America business, as acting CFO while it is looking for a permanent replacement for Ms. Suryadevara. She leaves after about two years in the role following a 15-year career at GM to become the CFO of payments company Stripe Inc.

GM said it is considering internal and external candidates but declined to provide additional insights into its CFO search. Mr. Stapleton, who joined GM in 1990, took on his current role in January 2014, the company said.

GM could follow the example set by Ford, which last year hired Tim Stone, a former Snap Inc. and Amazon.com Inc. executive, as its CFO, said Cathy Logue, head of the chief financial officers' practice at recruiter Stanton Chase.

"The automotive industry is going through so much change right now," Ms. Logue said. "I would expect them to opt for someone from a disruptive industry," she said, adding that that person would have to have CFO experience.

The GM search comes as more businesses look to bring in external talent. Nearly 40% of CFOs at S&P 500 and Fortune 500 companies in 2019 were recruited from outside, up from about 30% in 2018, according to the Crist|Kolder Volatility Report, which tracks recruitment trends in corporate leadership.

GM could also consider hiring another female executive or a person of color, Ms. Logue said, pointing to growing expectations from the public toward more representative leadership teams at companies. Ms. Suryadevara was GM's first female CFO when she took on the job in September 2018.

However, becoming GM's next CFO might not appeal to all candidates given the size of the task ahead.

The company is still reeling from the effects of two-months-long factory closures in North America -- it booked a $758 million net loss for the second quarter -- and will take time to return to its pre-pandemic financial strength. Apart from vehicles, GM is producing 30,000 ventilators to fulfill a contract with the U.S. Department of Health and Human Services by the end of August, a company spokesman said.

GM's share price, which closed about 2% higher Tuesday at $28.52, is still trading lower than in 2010 when the company returned to the public markets. "General Motors cannot compete with technology companies in terms of stock awards," said David Whiston, an equity analyst at Morningstar Research Services LLC.

Acting CFO Mr. Stapleton could use his tenure to audition for the top job if he wants it, Mr. Whiston said. Opting for him or another internal candidate would mean hiring someone who is familiar with the complexities of GM's business as well as its corporate culture, he said.

Both Ms. Barra and departing CFO Ms. Suryadevara rose through the ranks from within the organization. "There is plenty of good talent within GM, " Mr. Whiston said. "But going for that might be seen as just another candidate from inside," he said.

Write to Nina Trentmann at [e-mail]

(END) Dow Jones Newswires

August 11, 2020 18:29 ET (22:29 GMT)

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