Call it trial by fire. Last year, as General Motors began the meltdown that ultimately led to its bankruptcy filing, last week, senior company officials frequently sat down with reporters to outline the latest cutbacks in jobs and production. There were the familiar faces, like former CEO Rick Wagoner, as well as the man who replaced him, in March, Fritz Henderson. But less familiar was Ray Young, the traditionally soft-spoken veteran who was appointed Chief Financial Officer, in March 2008.
It was clearly not a great time to be counting the beans at the fast-failing automaker, but it puts Young in a key strategic position, now that GM is shedding billions of debt, half of its North American brands and more than a third of its dealers under a court-managed restructuring largely crafted under the heavy hand of the Obama Administration.
A 23-year GM employee, Young was born in Guangzhou, China, emigrating to Canada as a youngster. After earning an MBA at the University of Chicago, in 1986, he signed on with GM and has followed an increasingly familiar career path that included the GM Treasurer’s office, in New York, and several stints overseas. Young spoke with TheDetroitBureau’s Paul A. Eisenstein about opening GM’s books to its shareholders – the American taxpayer – the lessons learned in bankruptcy, and the threat of a GM boycott by the right wing.
TDB: When the White House forced out CEO Rick Wagoner, in March, there seemed to be a change in attitude by GM towards accepting a bankruptcy. Is this accurate?
Young: It’s hard to say when it became more evident. Time worked against us. The Obama Administration set some pretty tough targets. In March, $26 billion worth of debt had to be converted into equity. If you recall the original, December 31st agreement, Treasury had called for a two-third reduction. When President Obama increased that to 90%, that increased the risk that bankruptcy would have to be the tool to reach those objectives. So, March 30th, the stakes got raised. Without being able to restructure the unsecured debt, we would not be able to restructure outside bankruptcy. (more…)