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GM chief financial officer resigns unexpectedly

- Associated Press - Thursday, March 10, 2011

DETROIT (AP) — General Motors' finance chief is leaving after being passed over for chief executive officer.

Chris Liddell, who guided the company to its first profitable year since 2004 and led its successful public stock offering, will step down April 1 after just 15 months at GM. He'll be replaced by Treasurer Dan Ammann, a former Wall Street banker, the company announced Thursday.

Mr. Liddell, the former CFO of Microsoft Corp., once was considered a candidate to succeed Chief Executive Ed Whitacre, but GM's board instead picked current Chairman and CEO Dan Akerson when Mr. Whitacre left last August.

During a hastily arranged conference call with reporters, Mr. Liddell said he had no job lined up, but he doesn't want to be a chief financial officer any longer. He said he achieved his goals of pulling off GM's IPO, fixing its accounting problems and getting the company back on sound financial footing.

Mr. Ackerson's appointment as CEO meant that Mr. Liddell, 52, could wait years before getting the job.

The move is another in a series of management changes that started soon after GM emerged from bankruptcy protection in July 2009. The company has had four CEOs in less than two years, and it recently changed its top executives in sales, marketing, product development and engineering.

Shares of GM fell 85 cents, or 2.6 percent, to $31.40 in afternoon trading Thursday, below the November initial public offering price of $33.

Itay Michaeli, auto analyst with Citi Investment Research, blamed most of Thursday's stock drop on the broader market decline but said Mr. Liddell's departure would have an impact.

"To see a major management change just when you thought there would be no more management changes is going to rattle things a little bit," he said.

In 2009, Mr. Liddell said he was leaving Microsoft with an eye on taking a higher position, and Mr. Whitacre even told reporters that Mr. Liddell would be a candidate to replace him. Mr. Akerson's getting the job led to speculation that Mr. Liddell was unhappy about being passed over.

Mr. Liddell has held the CFO job at three companies: GM, Microsoft and International Paper.

He said he has not looked for another job while at GM, but he indicated Thursday that a CEO post might be in the offing.

"I have a number of interesting ideas which I have in the back of my mind, but none of them have CFO on it," he said during the conference call.

Under Mr. Liddell, GM posted four straight profitable quarters and began to repair accounting troubles that had plagued it for years. He joined the company in January 2010 with a reputation as a problem solver.

GM's stock stayed above the IPO price until late February, when the company posted fourth-quarter earnings that were below the three previous quarters and unrest in the Middle East drove up oil prices.

Mr. Akerson said Mr. Liddell was a major contributor to GM during a pivotal time in company history.

"He guided the company's IPO process and established a good financial foundation for the future," he said.

Mr. Ammann, 38, joined GM as treasurer in March 2010. Before GM, he was managing director and head of industrial investment banking for Morgan Stanley. His replacement will be announced later.

Mr. Ammann told reporters that he is committed to GM for the long term, and he agrees with Mr. Liddell's financial strategies. Investors, he said, could expect "more of the same."

Some industry analysts wonder if Mr. Liddell's departure was prompted by GM's decision in the past two months to raise such incentives as low-interest loans and lease deals — moves that could hurt GM's bottom line in the first quarter.

But Mr. Liddell said his leaving has nothing to do with the company's first-quarter performance, and Mr. Akerson said the company was off to a fast start for the quarter.

GM was plagued with financial reporting problems heading into and emerging from bankruptcy protection. Going into its IPO last year, the company said weaknesses in its financial controls meant many of its numbers could not be considered reliable.

Steven Rattner, former head of the government's autos task force, has said that GM had the weakest finance operation that task force members had seen in a major company.

But just two weeks ago, when GM released its 2010 earnings, the company said those problems had been fixed.

GM reported net income of $4.7 billion last year, fueled by strong sales in China and the United States as the global auto market began to recover. It was the company's best performance since earning $6 billion in 1999 during the height of the pickup truck and SUV sales boom.

GM accepted nearly $50 billion in government help to help it survive in 2009, but the company has since made an impressive recovery, with global sales growing 12 percent last year.

The company still must pay back more of its rescue aid. GM's owners — the U.S. Treasury Department, the Canadian and Ontario governments, and a union health care trust fund — sold common stock in the November IPO. The U.S. government got $13.5 billion from the sale and will have to sell its remaining shares for $53 each to break even on its aid to GM.

AP auto writer Sharon Silke Carty in Detroit contributed to this report.

 

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