Tim Solso, who relinquishes the chairman post, becomes "lead director," the board's point man representing the interests of shareholders -- which is what he did as chairman. Barra still reports to Solso and the board. Thus, the change of titles appears to be more an expression of confidence in Barra than a substantive change.
The appointment does underscore the board's satisfaction with her performance since taking office two years ago. She managed the crisis over defective ignition switches with aplomb, shepherded the introduction of several successful vehicles models, fended off unwanted advances from Fiat Chrysler Automobiles N.V. (FCAU - Get Report) attracted top non-GM talent and drew far-flung global operations into tighter cooperation.
Yet, Barra and the board haven't delivered on one critical component, the price of GM shares. Since the initial public offering in late 2010, the stock is down 12% compared with a stock market that is up 63% over the same period. Since her appointment as CEO, shares are down 26% compared to a market that is up 7.6%.
The automaker has proven it can design and manufacture vehicles that consumers around the world will buy. It's also exercising better discipline in the number of vehicles produced, avoiding the bloated inventories that result in profit-destroying discounts.
But capital markets will brutalize any enterprise that can't generate a fair return. Anecdotally, many who do business with GM wonder if the same organizational profligacy and inefficiency that contributed to the automaker's bankruptcy in 2009 are creeping back. Ultimately, Barra and the board will answer doubts about financial performance by profitably weathering recessions and industry downturns.
That goal isn't unreasonable. Honda Motor (HMC - Get Report) has done it. Closer to home, Delphi Automotive (DLPH - Get Report) , GM's former parts subsidiary that was reorganized after its own bankruptcy, has performed impressively, its stock up fourfold since its IPO in 2011.
Under the leadership of Chief Executive Rodney O'Neal, Delphi jettisoned a number of unprofitable and marginal businesses, reinventing itself into a automotive supplier that concentrates on high-margin, knowledge-intensive global businesses. The transition required discipline, planning, patience and and effort.
Barra and the GM board could do worse than study what one of its biggest suppliers, Delphi, was able to accomplish under many of the same conditions that the automaker faces.
Here's an idea: Why not invite the recently-retired O'Neal, a former GM employee who knows the industry like the back of his hand, to be a GM director? His experience at Delphi could prove invaluable in helping to turbocharge the No. 1 U.S. automaker's financial performance. Barra's recent promotion certainly confers her the standing to make such a move.