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GM Shake-Up: Liddell Out as CFO

Former Microsoft exec led GM through largest IPO in history.

by on Mar.10, 2011

Chris Liddell steps down as GM CFO.

This is an updated report on the original story posted by TheDetroitBureau.com earlier this morning.

There’s another management shake-up at General Motors, this morning, with Chris Liddell stepping down as the Detroit maker’s chief financial officer.  He will be replaced by Dan Ammann, currently GM’s treasurer.

Liddell’s planned April 1 departure comes as something of a surprise – and for several reasons.  After a series of management shake-ups following its emergence from Chapter 11 bankruptcy, in July 2009, GM’s senior ranks have been relatively stable in recent months, something insiders said was critical if the maker wanted to renew its focus on the business of designing, building and selling cars.

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But Liddell also was considered the key to General Motors’ wildly successful initial public offering.  The company initially expected to sell its new shares for as little as $26, but ultimately boosted the price to $33 – and sold a significantly larger large of the U.S. Treasury’s holdings than originally planned, ultimately raising about $23 billion in the process.

“Chris was instrumental in establishing a strong financial future for the company,” declared GM Chairman and CEO Dan Akerson during a Thursday morning news conference called to discuss the management shift.  Akerson described Liddell as “a catalyst for change” who “created a lower-risk profile” for the automaker after its emergence from bankruptcy.

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GM Beats Analyst Expectations With First Profit Since 2004

“We still have a lot to do,” says CEO Akerson.

by on Feb.24, 2011

Still plenty to do, said CEO Akerson, despite GM's first reported yearly profit since 2004.

General Motors Corp. made a profit of $4.7 billion during 2010, including $500 million in net income during the fourth quarter despite a 25% drop in earnings from its Asian operations and continuing losses in its struggling European automotive business.

GM also confirmed Thursday it will distribute a record profit sharing checks averaging $4,300 to 45,000 hourly workers in the United States. The payments, which will cost the GM about $189 million, are substantially larger any GM has distributed to workers since profit sharing was first included in its union contract in 1982.

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“Last year was one of foundation building,” Dan Akerson, chairman and chief executive officer, said, adding that, “Particularly pleasing was that we demonstrated GM’s ability to achieve sustainable profitability near the bottom of the U.S. industry cycle, with four consecutive profitable quarters.

It was the first time GM was profitable during all four quarters of the calendar year since 2004.  The maker subsequently ran up about $80 billion in losses before plunging into bankruptcy in May 2009.  It emerged from Chapter 11 protection two months later, but only after receiving $49.5 billion in federal assistance.

“We know we still have a lot to do,” Akerson said Thursday during a conference call with analysts and reporters.

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GM Aims to Stabilize Capital Spending

Maker hopes to “eliminate the big swings,” says CFO Liddell.

by on Jan.12, 2011

GM moving to put its financial house in order, says CFO Liddell.

In the future, General Motors expects to hold capital spending steady from year to year and to avoid dramatic peaks and equally dramatic valleys.

“We want to eliminate the big swings in capital spending,” GM Vice Chairman and Chief Financial Officer Chris Liddell said.

Over the years, capital spending has been reduced dramatically and many projects cancelled during recessions, he said.  “But that’s enormously expensive,” he added.   “A lot of money was wasted,” he said.

(GM now struggling with bankruptcy-related product delays. Click Here for the story.)

It’s better in the long run for GM to hold capital spending steady during both good times and bad, he said. “You have to have control of spending,” stressed Liddell, who joined GM after serving as Microsoft’s CFO.

Stronger finances, he asserted, will enable GM to hold capital spending level during a downturn.  And, as General Motors enters 2011, its finances are steadily improving  –though the company still faces challenges, GM’s top financial officer said Tuesday.

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GM Slashes Another $4 Bil In Debt

Maker moves to cover under-funded pension programs.

by on Dec.02, 2010

GM moving to put its financial house in order, says CFO Liddell.

General Motors Company has contributed $4 billion to its long-underfunded hourly and salaried pension plans in the United States.
Chris Liddell, GM vice chairman and chief financial officer, said $2.7 billion was contributed to the hourly plan and another $1.3 billion to the salaried plan.

The $4 billion contribution was another step towards putting the company’s financial house in order. GM’s U.S. pension plans currently provide benefits to approximately 688,000 participants, said Liddell.

“This pension contribution puts us another step closer to our goal of fully funding our pension plans and achieving minimal debt. With a healthy balance sheet, a lower cost structure and focus on revenue generation, we continue to put in place the fundamentals for sustainable success,” Liddell said.

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All of the company’s U.S. pension plans were, as of December 31, 2009 underfunded in total by $17.1 billion.  The company will next re-measure its U.S. pension plans at year end 2010 and their funded status will be included in the 2010 Form 10-K.

The pension liabilities were one of the key debts that remained after GM completed its bankruptcy, last year.

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GM Stock Ends First-Day Trading Over $33

Rise follows biggest IPO in history.

by on Nov.18, 2010

General Motors CEO Dan Akerson (center) rings the opening bell at the New York Stock Exchange Wednesday morning.

General Motors Co.’s new stock closed above the IPO asking price, reaping more than $20 billion for the principal sellers — including the U.S. Treasury – finishing first-day trading on the New York Stock Exchange at $33 per share.

“They marketed the heck out of this thing. It was bigger than the iPad and the iPhone,” said one analyst, who credited the apparent success of the GM IPO to the skillful sales job done by CEO Dan Akerson.  Akerson marked the milestone day by ringing the opening bell at the New York Stock Exchange, colleagues GM CFO Chris Liddell and vice chairman Steve Girsky at his side.

Akerson said the IPO was a great day for the company, which can put aside its government motors tag for  good.  Before the IPO, the U.S. Treasury owned 61% of GM under the terms of the 2009 bailout.  After the IPO the stake was reduced to about 33 percent, Liddell said, adding that when additional shares demanded by underwriters are accounted for, and while considering the convertible preferred stock also issued through the IPO, the Treasury share slips closer to 28%.

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Liddell also noted that while some sovereign wealth funds from abroad did participate in the initial public offering, 90% of the new GM shares were sold within North America. The allocations to various buyers included a $4 billion for retail buyers in the U.S.

“We thought it was important for there to be a retail allocation,” Liddell said.
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General Motors IPO Now Could Be Largest-Ever

On track to raise as much as $23 billion.

by on Nov.18, 2010

Judgment day on Wall Street for GM.

General Motors’ eagerly-awaited Initial Public Offering is now on track to be the largest first-time stock sale in history.

The maker, which only emerged from Chapter 11 protection 16 months ago, now estimates the public offering of common and convertible junior preferred stock will raise between $20.1 billion and $23.1 billion if the underwriters’ over-allotment options are fully exercised.

“As we prepare to enter the equity markets, all of us at GM are excited about this historic milestone.  We are especially appreciative of those who stood by us through the toughest times, and we are dedicated to creating value for all of our stakeholders,” proclaimed GM Vice Chairman and Chief Financial Officer Chris Liddell, finally breaking the SEC-imposed silence hours before the maker’s stock offering was set to go on Thursday.
Initially taking a conservative approach, GM intended to price the opening shares at $26 to $29 – even then exceeding the guess of its more conservative underwriters.  That would have raised between $10 billion and $12 billion, with the U.S. Treasury – the largest stakeholder – reducing its holdings from 60.1% to around 40%.

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But going into the final days before the IPO it became clear demand had far exceeded expectations, leading GM and the government to agree to expand the number of shares on the block by a third – to 478 million – and at a boost price of $32 to $33 each.

The mandatory convertible junior preferred stock portion of the offering, intended to raise cash for GM itself, was bumped up from 60 million to 80 million shares.

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GM Posts $2.0 Bil For Third Quarter

Third consecutive black quarter for long-troubled maker.

by on Nov.10, 2010

GM "demonstrated...significant progress," said CFO Chris Liddell.

Landing right in the middle of its forecasted range, General Motors is reporting a third-quarter profit of $2.0 billion, and the maker is predicting a full-year profit, as well, although the pace is slowing down.  It would be the first full year in the black since 2004.

The third-quarter net, which works out to $1.20 a share after a three-for-one split, marks the third consecutive quarter in the row GM has run in the black, a significant turnaround from its situation prior to last year’s bankruptcy – all the more so considering current U.S. car sales remain at deep recessionary levels.

“As demonstrated by our third consecutive quarter of profitability and positive cash flow, these results continue our significant progress,” said Chris Liddell, vice chairman and chief financial officer, in a prepared release.

Last week, when announcing details of its long-awaited IPO, GM had indicated it would post a roughly $2 billion profit for the quarter, with an upside of $2.1 billion, so there are few surprises in this morning’s announcement.  Nonetheless, confirmation of the forecast will help GM officials, including Liddell and his boss, CEO Dan Akerson, as they head out to win over potential investors who will be asked to support the anticipated $13 billion General Motors IPO.

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The maker has indicated it will seek between $26 and $29 per share during the initial public offering.  A specific date has yet to be announced, but industry insiders believe the stock sale will occur on November 18th.

As part of its bankruptcy-led restructuring, GM aimed to be able to break even at an annual North American sales rate of around 10.5 million.  While the industry has yet to post a significant recovery, the third quarter saw a modest upturn into the low 11-million range.  That generated revenues of $34.1 billion GM reported.

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GM Profits Could Hit $13 Billion Annually, Company Claims

Maker using huge upside potential to sell upcoming IPO.

by on Nov.05, 2010

GM could post a profit of $13 billion, new CEO Akerson suggests.

General Motors could turn a profit of as much as $13 billion a year, the maker is touting, as it begins the nonetheless challenging task of selling investors on its upcoming IPO.

Though the maker has yet to set a final date for the initial public offering, it is expected to take itself public again on November 18th, and has confirmed that it will offer its new shares for somewhere between $26 and $29 apiece.  The sale is expected to reduce the U.S. government’s holdings in the company from 60.1% to around 40%, though it is being estimated that the Treasury could lose as much as $5.4 billion on the sale.

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But both the automaker and government officials are hoping to not just sell out the anticipated offering of 365 million shares but build buzz that could drive demand for future stock sales – at a higher price.

And, with GM officials setting out to meet with potential investors, they are prepared to make some sweeping, upbeat forecasts.

“I know a great investment opportunity and the new GM is just that,” GM CEO Daniel Akerson said in an online video presentation. “We can make significant profit even in today’s difficult environment.”

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GM Back in Auto Financing with AmeriCredit Buy

Cash transaction creates a new captive finance company at General Motors to provide more vehicle loans and leasing.

by on Jul.22, 2010

Is Whitacre creating his own empire, just as he did at SBC, in effect reassembling AT&T ?

General Motors Company and AmeriCredit Corp. (NYSE: ACF) today announced they have entered into an agreement for GM to acquire AmeriCredit, an independent – and more importantly successful – auto finance company in an all-cash transaction valued at about $3.5 billion.

The acquisition creates a new GM captive financing arm that will enable GM to provide potential customers with more credit options. GM claimed it would not change its current incentive plans in the U.S., which are among the industry’s highest. If true, this means that taxpayers would not incur increased costs from more of the kinds of subsidized financing that auto companies often use to bolster sales.

Thus far this year GM sales are not increasing as fast as the overall market. Auto companies continue to incur loses because of overly optimistic residual values for returning lease vehicles.

GM said it needs to provide financing to “non-prime” customers – 40% of the U.S. population but only 4% of its current car buyers – who are remain pariahs in the credit markets despite lavish taxpayer financed bailouts of Wall Street firms and big banks that totaled almost a trillion borrowed dollars  – and were designed to free up credit, according to the Obama Administration.

Under the terms of the agreement approved by both companies’ boards of directors, AmeriCredit shareholders will receive $24.50 in cash for each share of stock held as of the closing date, which is due by the end of the fourth quarter of 2010, pending various conditions, including the approval of AmeriCredit shareholders

GM’s proposed purchase price is about a 25% premium over AmeriCredit’s closing share price on Wednesday. AmeriCredit has traded for as high as $26.49 a share this year.

“Adding AmeriCredit to our team will improve our competitiveness in auto financing offerings, and I am very pleased to have them on board,” said GM Chairman and Chief Executive Officer, Ed Whitacre about the Texas based financing company.

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GM claimed it will maintain its relationship with Ally Financial, the renamed GMAC, which is and now an independent taxpayer-owned company that provides retail and wholesale financing to GM and Chrysler Group. Currently GM has 57% of its transactions in the retail prime market through Ally and other banks, above the industry average of 53%.

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GM Global Business Conference Reveals Little New

It is mostly a rehash of previously available info as a run up to an impending IPO. But two key things emerged for taxpayers.

by on Jun.29, 2010

The man whose product development team will ultimately pay back the taxpayer debtors?

General Motors Company today hosted a group of 200 members of the financial community and other stakeholders during a Global Business Conference at its Technical Center in Warren, Michigan.

The event was the first of its kind since the debut of the new company in July 2009 when it emerged from bankruptcy as a taxpayer-owned private firm and former ATT telephone executive Ed Whitacre took over as Chairman.

The conference had all the appearances of a hastily arrange public relations event that was likely constrained in content by an impending filing with the U.S. Securities and Exchange Commission to take the taxpayer held company public.

Once GM files, it will be subject to a “blackout period” on such events until its public offering is complete – a process that is largely outside of GM’s control. Such a filing could come as early as next month when second quarter earnings become available, which the best companies do within weeks of closing, if not sooner.

GM had revenue of $31.5 billion and operating income of $1.2 billion during the first quarter of 2010. GM’s net income attributable to common stockholders was $865 million, resulting in earnings per share on a diluted basis of $1.66. It was the first quarterly profit at the company since 2007, and a necessary prelude to an initial public offering or IPO.

The conference featured a review of GM’s global business, with updates by Chairman and CEO Ed Whitacre, Vice Chairman Steve Girsky, Vice Chairman and CFO, Chris Liddell, and GM’s regional presidents. Vice Chairman of Global Product Operations Tom Stephens provided a review of GM’s global product portfolio, and an early preview of some upcoming products, including the next versions of the Opel Insignia, Chevrolet Malibu, and Cadillac CTS.

Most of it was boilerplate and platitudes, which if bottled could prove to be a great benefit to insomniacs.

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However, two things were notable for close followers of the company. One concerned finance, while the other dealt with product development – two areas that need to work together better than previously if GM is to survive the ongoing “take no prisoners car wars.”

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