Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.
+1 212 318 2000
Europe, Middle East, & Africa
+44 20 7330 7500
+65 6212 1000
Posted by: David Welch on September 09, 2009
General Motors CFO Ray Young will soon be headed for the door. Sources in the company said he has been looking to leave for some time. But he was also under pressure following a review of the company’s finance operations that was completed for the new board by the Treasury Department’s Auto Task Force in early August. He hasn’t even left the company. But he is already exploring other opportunities.
Sources say Young was not fired, but he was certainly feeling the heat and decided to look outside. There could be even more departures coming. Company insiders say that executive headhunters are combing the company for talented veterans who may want to leave for greener pastures. One headhunter, who asked that he not be named, says he has received plenty of resumes from GM executives. Why not? Certainly many companies with publicly-traded stocks and better prospects can offer fatter salaries, bonuses and stock options.
Plus, GM managers are under a lot of pressure these days. GM’s new board wants to see that the company is moving to change its insular culture. They also want to see signs of growth fast. New Chairman Ed Whitacre has said in internal meetings with GM executives and staffers that he wants to see better sales results in a few months, say sources briefed on the meetings. If not, some managers may be booted out. The company has to demonstrate that it has a plan to grow market share and revenue. GM’s board is also pressuring management to get its new products to market faster. There is concern among the new directors that GM doesn’t have enough new cars in the pipeline to hit sales and profit targets, says one executive briefed on the board’s discussions. In recent reviews of GM’s future models, board members said they liked what they saw but can’t understand why it takes the company so long to get the cars to market. “If it’s a 48-month program they want it done in 36 months. If it’s 36 months, they want it in 24 months,” says one GM manager. “It’s being suggested that we have to work faster than ever.”
As the board watches over the current crop of managers and faces the possibility of more departures, Young’s case may show how much allure GM has to the budding executive. At 47, Young has to start making big money now. But with pay being limited and the stock still not listed, GM won’t give anyone a big payout for years, if ever. Sources say he was looking for a different situation that at least could offer a chance for a better payout. GM has already hired a search firm to find a replacement. But unless they can offer more money, getting top talent will be a challenge. GM may go public some time next year. That would at least create a stock that executives can cash in if their labors spark a turnaround. But that will be a gamble for anyone who will sign on.
Want the straight scoop on the auto industry? Detroit bureau chief David Welch , Dexter Roberts and Ian Rowley bring daily scoop, keen observations and provocative perspective on the auto business from around the globe. Read their take on such weighty issues as Detroit’s attempt at a comeback, Toyota’s quest for dominance and the search for an efficient car.