(Corrects spelling of hometown in ninth paragraph.)
Dennis Dammerman, the man Jack Welch picked to help extricate General Electric Co. (GE:US) from a bond-trading scandal at its former Kidder, Peabody Group Inc. unit, has died. He was 67.
Dammerman died July 23 at Saratoga Hospital in Saratoga Springs, New York, after a “long illness,” GE said in a statement.
“I loved him and respected him and will miss him terribly,” Welch, GE’s chief executive officer from 1981 to 2001, said in the statement.
Welch chose Dammerman, who was then 38, to become the youngest chief financial officer in GE’s history. He soon asked his new CFO to handle the scandal at Kidder, Peabody, where $350 million of false profits were created through what GE called “phantom trading” in U.S. Treasury securities. Dammerman took charge of the battered brokerage and helped sell it to PaineWebber in a deal that ultimately minimized GE’s financial pain.
To stem losses at Kidder, Dammerman oversaw the elimination of 10 percent of the workforce, paring costs by $100 million and cutting its balance sheet by as much as $30 billion.
Four years later, in 1998, Welch chose Dammerman to run GE Capital, where he more than doubled its assets to $567 billion. Dammerman retired from Fairfield, Connecticut-based GE in 2005.
“If Dammerman’s not going to be CEO of GE, you want him to have what’s arguably the next most important job there,” Tim Stevenson, an analyst with American Express Financial Advisors told Bloomberg in 1998.
In 2008, Timothy Geithner, as president of the Federal Reserve Bank of New York, and then-Treasury Secretary Henry Paulson, pulled Dammerman out of retirement and onto the board of American International Group Inc. (AIG:US) There, Dammerman discovered Robert Benmosche and hired him as CEO in 2009 to steer the troubled insurance giant back toward profitability.
Born on Nov. 4, 1945, in Grand Mound, Iowa, Dammerman received a bachelor’s degree from the University of Dubuque in Dubuque, Iowa, and joined GE’s financial management program in 1967.
A decade later, he met Welch, who was impressed with Dammerman’s understanding of the numbers as well as his grasp of which parts of the business would drive profit, according to a 1995 article in Fortune. He soon became Welch’s right-hand man.
Dammerman was known for having unwavering loyalty to GE and is credited with discovering GE’s current CEO, Jeff Immelt, at the time a Harvard MBA graduate, who walked into his office for a job interview in 1982. He became a powerful partner to Immelt as he rose through the ranks to take the top job in 2011.
“I will always be grateful to Dennis for the time he took to help me when I became CEO,” Immelt wrote in a note to GE employees and in the statement released by GE. “He was a great mentor, coach and partner. There were many times when I faced tough decisions that I knew Dennis would have the right answer.”
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