GMAC promotes COO De Molina to CEO
GMAC promotes COO De Molina to CEO
No changes seen in how GMAC runs auto lending business
Automotive News | March 18, 2008 - 10:10 am EST
NEW YORK (Reuters) — GMAC, in the midst of struggles with mortgage-related losses, on Tuesday named Alvaro de Molina CEO effective April 1.
De Molina, 50, will succeed Eric Feldstein, 48, who will join Cerberus Capital Management LP, the private equity firm that controls 51 percent of GMAC. General Motors owns the other 49 percent.
De Molina was named COO of GMAC last August. He had joined Cerberus two months earlier following 17 years at Bank of America Corp., where he had been chief financial officer.
De Molina has been gaining an understanding of the entire business since joining GMAC in August, Gina Proia, a GMAC spokeswoman, told Automotive News today. His new position will not impact how GMAC run its auto finance business, she said.
“Our auto finance operation is not going to be changed as a result of the announcement today in fact the company is focusing on our core strengths, which includes our large share of auto finance,” Proia said. “It’s a priority to keep the needs of our customers, including our dealer customers, in mind.”
In his new role, de Molina will be responsible for deciding the fate of Residential Capital LLC, a GMAC mortgage unit that lost $4.35 billion in 2007 as the housing crisis caused higher defaults and lower loan volume.
GMAC has said it is exploring asset sales and other ventures for ResCap. The unit’s problems led to a $2.33 billion overall loss for GMAC in 2007.
Credit rating agencies have slashed GMAC’s and ResCap’s ratings to medium "junk" status.
Cerberus founder Stephen Feinberg wrote investors on Jan 22: "GMAC is an investment about which we have significant concerns. If the credit markets continue to decline and we find ourselves in a prolonged environment of capital market shutdown, GMAC could run into substantial difficulty."
De Molina was not immediately available for comment.
Feldstein took over GMAC in November 2006. He previously spent 25 years at GM, including four years as chairman of the former General Motors Acceptance Corp. In his new role, he will advise Cerberus on its financial services portfolio and new investment opportunities.
