GM to shake up finance unit; CFO likely out

Wednesday, September 9, 2009

GM to shake up finance unit; CFO likely out

Robert Snell, David Shepardson and Christine Tierney / The Detroit News

company’s finance department, sources familiar with the situation said Tuesday. chief financial officer since March 2008.

Problems with task force

Young previously served as group vice president of finance and in overseas posts in Japan and Brazil. He also served on GM’s automotive strategy board, which was disbanded after the automaker emerged from bankruptcy and replaced by a smaller executive committee as part of a broader push to speed management decisions. Young also sits on the new committee.

The Obama auto task force had issues with Young and GM’s finance team over the last six months. In at least one instance, the task force took Young to task over a June 2 interview, a government official said.

Young told reporters and analysts that GM likely would not disclose financial information when it emerged from bankruptcy since it would be a private company. A day later, GM issued a statement that said the company "intends to make regular disclosures during the period it is private in order to provide appropriate information regarding our financial condition."

Young is not the only GM executive being scrutinized.

When GM’s new board of directors was briefed in early August, one member asked Bloom how he viewed Henderson’s ability to lead a GM turnaround. Bloom responded, 60 percent yes and 40 percent no, as did Harry J. Wilson, a former top auto adviser who has since left the auto task force. Bloomberg News first reported the exchange and government officials did not dispute the account.

Bloom declined to comment.

The task force also raised the issue of revamping GM management. To date, all of the members of the GM executive committee are long-time GM executives, though several top managers are leaving the company as part of GM’s efforts to cut its executive ranks by 35 percent by Oct. 1.

But as a recipient of government loans, GM faces federal pay restrictions — a hurdle to bringing in new talent.

Opel decision possible

GM’s board may make a decision regarding Opel today, company officials said.

Pressure is mounting on GM from the German government and labor unions to choose a buyer for Opel. They strongly favor the sale of Opel to Canadian supplier

GM is studying three other possibilities: keeping Opel, selling it to private equity firm RHJ International SA, or putting Opel into insolvency, with the last option considered the least likely.

"There are ways, even as a minority shareholder, to continue to participate in the European market with Opel-Vauxhall," said John Smith, GM’s chief negotiator in the Opel talks. The vehicles are branded Vauxhall in Britain and other markets.

Amid reports in Europe that GM was dragging its feet, Smith said negotiations on the bids had progressed well. "At this point, there aren’t any significant issues to resolve with the proposal from RHJI," he said. "The most significant open issues with Magna-Sberbank on the core agreements have recently been resolved. Some additional agreements relating to purchasing and information technology still need to be developed and agreed to prior to any closing."

GM and the Magna-led consortium have worked out agreements regarding governance, intellectual property and engineering services Opel would continue to provide to GM.

The German government has provided Opel with bridge loans and is offering more financing — but only if Opel is sold to Magna.

The stakes are high for the German government, which faces national elections on Sept. 27, and for GM, which views Opel as a key part of its global product development process.

"No matter which way we cut, we’re trying to preserve … the global platform sharing between GM and Opel," Smith said in an interview. "Either one of these two investors probably needs us as much as we need them."

Magna International Inc. and its Russian partner Sberbank.

General Motors Co. Chief Financial Officer Ray Young is expected to leave the automaker in coming weeks as part of a shake-up of the

The news emerged as GM’s board of directors launched a two-day meeting to assess the automaker’s management team and make a decision, perhaps as early as today, about the sale of its German carmaker Adam Opel GmbH.

GM has reportedly hired a search firm to help find Young’s replacement, according to a source familiar with discussions. GM spokesman Chris Preuss declined to comment and Young did not reply to an e-mail seeking comment.

Young’s expected departure is one of several possible changes among senior executives, and the board is reviewing other positions, the source said.

Two of Young’s predecessors as finance chief — Fritz Henderson and Rick Wagoner — were eventually promoted to chief executive officer. Young’s likely departure, and the shake-up within GM’s finance ranks, illustrate the strict control being applied by GM’s new board of directors, headed by former AT&T CEO Ed Whitacre.

Members of the Obama administration’s auto task force, led by Ron Bloom, briefed the board last month, and have raised questions about the performance of Young and the finance department as a whole. Bloom was named the government’s top adviser on manufacturing on Monday. GM, which emerged from bankruptcy court in July after shedding billions in debt, thousands of workers and four brands, has lost $88 billion since 2004. Young, 47, has been

Share
Seniority Lists
Recent Posts!
Bargaining Committee

Chairman
Mike Herron
President
Tim Stannard
Zone at Large – 1st
Danny Taylor
Zone at Large – 2nd
Mark Wilkerson
Committeepersons
Joe McClure
Chad Poynor
Steve Roberts
Derek Lewis
Bill Cundiff
Kirk Zebbs
Don Numinen
Jay Minella
Danny Bragg
Chris Hill
Rashad Thomas
Keith Oswald
Chris Brown

1853 Officers

President
Tim Stannard
Chairman
Mike Herron
Vice President
Darrell DeJean
Financial Secretary
Mark Wunderlin
Recording Secretary
Peggy Mullins
Trustee (3)
Jay Lowe
Dave Clements
Dave Spare
Sgt. at Arms
David C Spare
Guide
Ashley Holloway
E-Board at Large (2)
David Ryder
Steve Roberts
GM Unit Chair
Mike Herron
Leadec Unit Chair
Larry Poole
Ryder Unit Chair
Patrick Linck
AFV Unit Chair
Neil Osborne
Retiree Chair
Mike Martinez

Get Text Alerts



asdasdsd

*Standard text messaging rates may apply from your carrier