GM CFO Ray Young to Leave. More to follow?

Posted by: David Welch on September 9, 2009

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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.

Reader Comments

BIGWEEDS

September 9, 2009 10:19 PM

Folks,
I hope the last person that leaves GM will turn out the lights which will help the USA save energy.
Regards

Mauricio Rio

September 10, 2009 9:08 AM

I can understand Ray living GM for better payouts. Ray is a very special man, brilliant, highly capable not only in Finance but also Master in "real" Business Administration including a special touch for people. He did the impossible in GM do Brazil, turning this operation aroung on sustainable basis. Unquestionable since results are there. Replication on a bigger scale would be a matter of time. GM is now driven by huge fight for survival, but we can clearly see political decisions given US Government majority. In this case it will be a shame if GM is forced to loose Ray. I keep my best wish for this great and unique Company, the same for some great and unique Executives

GM Daughter

September 10, 2009 10:27 AM

When will Corporate America get over it's "top-talent-itis" and start paying realistic salaries for realistic expectations? A mediocre company can outperform a star if the wages, salaries, and benefits are kept low enough. We're not talking about minimum-wage monkeys, we're talking about setting pay in the fiftieth percentile rather than the ninety-ninth.

AJ

September 10, 2009 12:19 PM

Surprise, surprise ... GM, What's the definition of insanity ...

affie54

September 10, 2009 9:36 PM

The "new" GM has no publicly traded securities. Nor will it, not for a long, long time. Not with this line up...

CJ

September 11, 2009 2:37 AM

BETTER Than Working In SWEATSHOPS in the Toyota company. Bet their making high profits by having theirs sweatshops work twice as hard maybe we should do that. AN IDEA! ;)

Lingohocken

September 11, 2009 3:24 PM

Faster development and cheaper production, but nary a word about better repair record/fit & finish.

Where have we seen this movie before?

Snoz

September 12, 2009 2:44 AM

At GM,i.e., Government Motors, the witch hunt is on for escape goats, misfits, and fall-guys. Ray Young fits the bill. Others, like wise, have been identified. GM's high flying CEOs are like old buzzers that swoop down to pounce on middle management made vulnerable due to bankruptcy. To secure their lofty position within GM, the old boys of the Old-Boys Network are hard at work closing ranks against those whom they perceive as outsiders. In time, whatever talent residing in GM will have vanished. Even after its IPO in 2010, Chapter 7 is just around the corner.

Dave

January 11, 2010 3:55 PM

I don't think you understand that 99% of the company is actually paid less than market value. The top managers are the ones getting paid the big money...Obviously you don't know anything about GM.


GM Daughter
September 10, 2009 10:27 AM
When will Corporate America get over it's "top-talent-itis" and start paying realistic salaries for realistic expectations? A mediocre company can outperform a star if the wages, salaries, and benefits are kept low enough. We're not talking about minimum-wage monkeys, we're talking about setting pay in the fiftieth percentile rather than the ninety-ninth.

James

February 19, 2010 8:55 PM

Ray was Rick Wagnor's boy. So the day they fired Rick, Ray's days at GM was counting. Good for Ray, now he can make a lot of money without doing much work at GM ... what a deal. Sadly, GM had or has too many of these who have much to do about anything, while picking up sizable pay checks .., it is just GM way.

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Want the straight scoop on the auto industry? Our man in Detroit David Welch, brings keen observations and provocative perspective on the auto business.

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