By on September 9, 2009

What a funny coincidence. On the very same day that a government oversight panel rips GM a new one for disappearing billions of taxpayer bucks, the Detroit News brings word that GM’s CFO, Ray Young, will be leaving the company. Young’s departure comes as GM is shaking up its finance department, the division which gave the company such fine leaders as Rick Wagoner and Fritz Henderson. The DetN identifies Young’s announcement that GM would not disclose all of its financial information as a publicly-funded private company as a major cause for his ouster. And if the DetN‘s reporting is to be believed, Young isn’t the only GM exec who should be worried.

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.

So, while the search for Young’s replacement is already under way, GM’s CEO is living on a razor’s edge with his federal taskmasters. GM’s board is currently bogged down in Opel negotiations, but once that issue is settled, more shakeups seem likely to follow.

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20 Comments on “GM CFO on the Way Out...”


  • avatar
    CyCarConsulting

    What about Bernanke he won’t answer questions either? Put him on the list too.

  • avatar

    As soon as GM’s financials released, Henderson’s gone. And LaNeve. Lutz. The lot of ’em. GM’s Kristallnacht, only backwards (Mr. Godwin).

  • avatar
    JSF22

    Figures. My friends at GM say he’s the only person in top management who’s worth a shit.

    It’s hard to believe you could get in trouble just for telling the Task Force things they didn’t want to hear. The government is strictly hands off.

  • avatar

    Ray Young will be leaving the company.

    Is that “leaving the company” as in “you screwed up; here’s a box and you have 30 minutes to clear your desk and leave the building,” or as in “thanks for your years of service and enjoy your golden parachute?”

  • avatar

    Who the heck would want to work at GM these days?

  • avatar
    psarhjinian

    As soon as GM’s financials released, Henderson’s gone. And LaNeve. Lutz. The lot of ‘em. GM’s Kristallnacht, only backwards (Mr. Godwin).

    I’ll give you La Neve (because he was demoted already), but I thin Henderson might hang on. Lutz probably will too. Sadly, so will Susan Docherty and her equivalents. I don’t think the government has the stones for this kind of housecleaning, and I don’t think the BoD has the pull, not with some of the guys and gals who currently sit on it.

    I really want to believe. I really do.

  • avatar
    rnc

    Who the heck would want to work at GM these days?

    In terms of a CEO/President type position a) someone who has already had a very successful career and would now like to live the Patton dream (achieving victory in the face of impossible odds) and be remembered as one of the greats and b) would very much like the payday that would come if they were successful, they’re already rich, probably miss the power and challenge. Geistner from IBM would be an example.

    CFO and below would a) love to work with/for such a person and b) would very much enjoy the payday they would receive if successful.

  • avatar
    rnc

    For once I tend to agree with RF, the top will be gone shortly, they were kept for maintance purposes until the board could get its feet on the ground, but then it’s bye bye, if you look at the people on the board they all come from successful companies, none of the top management at GM has ever experienced that or knows how to get there. I agree after Q3 financials there will be a special outside CEO appointed and the rest will fall and be replaced with his/her people down through the “E” ranks with maybe 1 holdover.

    I’ve worked for two companies in BK (intentionally for the experience out of college) and the above scenerio is how it happened at both places.

  • avatar
    mikey

    @Robert Farago….When will GMs financials be available to the public?

  • avatar

    rnc,

    I was not thinking of the business challenge but rather the hassle of having government overseers. “Would you like to run GM?” and “Would you like to run government owned GM?” are two different questions.

    I was thinking of a different challenge today. There is a lot of unemployed talent and skilled labor plus manufacturing facilities available for pennies on the dollar. Could somebody start a successful new car company these days?

  • avatar
    mtymsi

    The sooner Henderson, Lutz and La Neve are history the better. I feel the same way about them as I did Nardelli at Chryco, it can’t happen fast enough.

    So long as those three are on board there will be no “new” GM which is absolutely imperative if GM is to have even a remote chance of succeeding.

    They are products and followers of the failed past as they don’t know any other way. The replacements should be from successful companies even if they aren’t automobile related.

    The expression “good riddance to bad rubbish” comes to mind.

  • avatar
    fincar1

    “Could somebody start a successful new car company these days?”

    No. At least not to sell cars in the United States, because they will have to meet all the expensive and time-consuming requirements imposed by a government which already owns some of the companies one would compete against.

  • avatar
    Logans_Run

    Young wasn’t a bad guy. Very smart but likely corrupted by the GM thinking. We will soon see if GM has changed. Will they bring in a CFO from the outside or will they promote yet another GM finance understudy? The one guy that GM can’t afford to lose is Nick Cyprus who is the Chief Accounting Officer and general “no more bullshit on my watch” guy. He is an outsider that was very instrumental in turnarounds at both AT&T and Interpublic Group. He has made great strides in providing clarity and accountability in the GM accounting operations. GM needs more guys like this that will not put up with the old culture and accounting games (see SEC investigations of financial statements for years prior to 2006).

  • avatar
    KixStart

    This is, perhaps, one way to prevent another CFO from becoming CEO.

  • avatar
    GarbageMotorsCo.

    Aw, c’mon GM! Give him 10 million for his troubles. You did for Dick Wagoner.

    Why not? You’ve got 50 billion in tax money to pay for your failure, why not reward all your bigwigs like always.

    It’s called a “Golden Parachutte” You’re notorious for them.

    GM. Reward failure.

  • avatar
    rnc

    GarbageMotorsCo:

    If I had to make a guess most of that money went towards funding pension obligations, GM is paying benefits for a company that had 50% market share with a company that has 19% (I imagine that they were heavily invested in alot of AAA rated securities that didn’t quite work out.)

    Above is also the primary reason that I believe that the whole purpose of the government provided DIP/BK was to put them in a position that they could obtain private DIP financing in the near future and dispose of pension obligations (and probably most of the US manufacturing) during better economic conditions.

    Imagine the cost of supporting all of the towns and counties that would have basically gone under if GM would have just collapsed (and most of thier suppliers) medicaid, food stamps, unemployment, bank failures, defaults on muni bonds (requiring an additional bailout of the mono-lines), foreclosures leading to loss of property taxes all leading to funding for education and other municiple services, etc. Taking everything into consideration, the $50 billion spent to keep GM on life support probably saved several hundreds of billions.

    I would have preferred to let GM fail, but given everything I understand why they didn’t. All of the above people and communities have been given a warning and time to prepare (they all believed that they wouldn’t let GM go bankrupt in the first place, they can’t hold onto that anymore).

  • avatar
    mikey

    @ rnc..Well said. As a senior hourly employee,now retired,I started my “what if plan” five years ago. I hope and pray that somehow GM and my pension will survive. That being said,I treat every pension check as if it was my last one.

    In conversation’s with my former coworkers “denial” is alive and well.

    IMHO I can’t see the taxpayers or the politicos having the stomach for anymore bailout cash. If GM can’t,or won’t put the right mangement team together,the end will come sooner than later.

  • avatar
    Lorenzo

    “Who the heck would want to work at GM these days?”

    “In terms of a CEO/President type position a) someone who has already had a very successful career and would now like to live the Patton dream (achieving victory in the face of impossible odds) and be remembered as one of the greats and b) would very much like the payday that would come if they were successful, they’re already rich, probably miss the power and challenge.”

    That’s how Bob Nardelli was suckered into his Chrysler job.

  • avatar
    GarbageMotorsCo.

    “Imagine the cost of supporting all of the towns and counties that would have basically gone under if GM would have just collapsed (and most of thier suppliers) medicaid, food stamps, unemployment, bank failures, defaults on muni bonds (requiring an additional bailout of the mono-lines), foreclosures leading to loss of property taxes all leading to funding for education and other municiple services, etc. Taking everything into consideration, the $50 billion spent to keep GM on life support probably saved several hundreds of billions.”

    Seriously? These are the same scare tactic lines I read back in February before GM even declared bancruptcy. Sorry, but I don’t agree with the whole doomsday theory that goes along with the loss of an Automaker. Especially one that has clearly been going down the path of failure for decades now. Look at the UK, did it all of a sudden implode when it lost it’s Auto manufacturing base? Nope. They had it coming, let the free market decide.

  • avatar
    rnc

    Seriously – It wasn’t really about GM it just the reality of the “macro-economic” situation at the time.

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