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Tag >> General Motors
Chris Liddell announced that he will leave General Motors on April 1.
In a press release Thursday morning, the company stressed Liddell is stepping down after completing the largest public stock offering in history and stabilizing the company's financial operations.
Uh oh. Here we go again.
Merely hearing the word "sub-prime" is enough to make you squirm. But, put it in the same sentence as "automaker" and suddenly you want to puke, or sell all of your equity investments.
I couldn't help but think back a year and a half when I read the news of a leaked staff memo out of General Motors. Reuters reported on Monday that the automaker's chief executive, Ed Whitacre, wrote, "Our first quarter financial results will show us an important milestone, and I'm pleased to say that I anticipate solid operating results when we report our first quarter financials in May."
Those solid results, of course, were made possible by GM's bankruptcy, which it emerged from last July after 40 days.
Bloomberg scored an interview with Ford Motor's CFO, Lewis Booth. A few quick takeaways: The worst is probably behind the auto industry, though it all depends on the economy; despite a profitable 2009, don't expect a dividend anytime soon; and the same goes for an investment-grade credit rating.
If you look at Ford's balance sheet, it's a bit funny that someone would even ask about the last two things. Last year was its first annual profit in three years and, in order to avoid falling into bankruptcy like General Motors and Chrysler, Ford borrowed $23 billion in late 2006.
Back in October, former auto czar Steve Rattner wrote in Fortune that General Motors had "perhaps the weakest finance operation any of us had ever seen in a major company."
That left those of us at CFOZone wondering who would have the stomach to handle that kind of turnaround. Enter ex-Microsoft CFO Chris Liddell in December.
So what did the 51-year-old and native New Zealander find?
Dutch sports-car maker Spyker Cars wasn't the only one to continue eyeing General Motors' Saab business even as GM is planning to shut down the unit.
Private equity firms are also interested in the assets and are making offers, a European private equity professional told me in a recent conversation.
Although he didn't cite specific parties, earlier this month, private equity firm The Renco Group and investor group Merbanco were reportedly also interested in Saab.
The source said that it's becoming increasingly common for private equity firms to pursue targets that may not be officially for sale anymore.
GM said it has received several inquiries about Saab and it was looking at them. "Should something concrete develop we'll consider it, but in the meantime we're making the wind-down preparations," GM vice president John Smith, who is leading the Saab talks, told the Wall Street Journal Sunday.
My source said that private equity firms aren't necessarily pursuing Saab because it's an attractive deal from a pure financial perspective or to boost returns. Firms need to think beyond simple transactions these days, he argued.
A transaction like the Saab one can help polish a firm's overall acquisition strategy, adding some cachet to a portfolio and ultimately helping with fundraising, he said.
Earlier this week, former car czar Steve Rattner published his account of the auto bailout in Fortune magazine.
Considering the fact that Detroit is still in a lot of disarray, I'm not exactly sure if this was intended to be bragging. But, really, it's difficult to see how it's going to help any of the automakers. In particular, General Motors comes out looking bad. I mean, even worse than you'd expect, which is saying something.
By Ronald Fink
The idea that global corporations want one bank that can handle all their needs everywhere is absurd, and therefore no argument against breaking up megaliths like Citigroup. After all, investors were clamoring for its break-up even before the bailout had folks ranging from Simon Johnson to Yves Smith chiming in.
It seems like General Motor's CEO Fritz Henderson at least has a fighting chance.
The Treasury's auto task force told the automaker's board of directors that it ball-parked its chances of turning things around at 60 percent, according to Bloomberg , citing a person familiar with the briefing.
The meeting, which was closed to management, occurred about three weeks after GM emerged from bankruptcy on July 10.
Lead adviser Ron Bloom pegged the prospects of a turnaround at, "Sixty percent yes, 40 percent no, or 40-60, depending on who you ask."
Another adviser, Harry J. Wilson, chimed in that it was, "More 60-40."
Success is often a relative term. That's surely the case in the restructuring of General Motors.
Restructuring bankers at Evercore and turnaround specialist AlixPartners are in a battle with the U.S. trustee in the GM case over fee requests related to the work they've done both leading up to and during the automaker's bankruptcy. Those fees include "success" fees of $17.9 million and $13 million, respectively, even though the U.S. government had to step in to head the restructuring and take a stake in GM.