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Girsky Named General Motors Vice Chairman

Is Lutz being put out to pasture?

by on Feb.22, 2010

Will Stephen Girsky's promotion to Vice Chairman be followed by Bob Lutz's departure?

General Motors has named Stephen J. Girsky its new Vice Chairman of Corporate Strategy and Business Development, a move that coincides with yet another round of changes in the automaker’s corporate suite — and it is triggering debate – once again – over the future of GM’s long-time product chief, Bob Lutz, who turned 78 this month.

Girsky, a former Wall Street analyst has been serving a variety of rolls at GM since joining the company on July 10, 2009, as it emerged from bankruptcy.  He initially joined the automaker’s board of directors as the representative for the United Auto Workers Union, which took a major stake in GM as it emerged from Chapter 11.

But on December 1, following the ouster of former Chief Executive Officer Fritz Henderson, Girsky became a special adviser to Edward Whitacre, as he added CEO to his initial title of non-executive Chairman.

In recent months, Whitacre has acknowledged his heavy reliance on Girsky, a former Morgan Stanley analyst, to sort through some of the basics of the car business, which Whitacre, the former CEO of AT&T, admits he doesn’t fully understand.

“Steve brings a depth of experience to this position that will serve the company well as we continue with our restructuring efforts,” said Whitacre, following Girsky’s appointment to the Vice Chairman’s post. “He is a trusted adviser who has made a major contribution through the company’s transition. We look forward to benefiting from Steve’s counsel and insights as we move the company forward.”

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A frequent critic of GM during his years on Wall Street, Girsky has generated good marks from those who have worked with him, over the years, including Joe Phillippi, former auto analyst with Lehman Brothers and now head of the consulting firm, AutoTrends.

“He’s obviously got a lot of background in the auto industry,” said Phillippi.  “And Ed (Whitacre) feels he needs a good sounding board and an outside voice.”


UAW Picks Its GM Board Member from within

The union's right to appoint directors has been controversial.

by on Jun.19, 2009

Stephen J. Girsky

Funding is a challenge.

The United Auto Workers and the trustees of the Voluntary Employee Beneficiary Association (VEBA) for retired workers selected Stephen J. Girsky yesterday  to fill its seat on General Motors’ board of directors. How the process worked was not revealed.

The VEBA trustees have the right to name a director of the corporation, with consent of the UAW. Starting on 1 January 2010, the VEBA will assume responsibility for paying the health-care bills of GM’s retired workers.

The idea of the VEBA has been around for years, but as adopted by GM, Ford Motor and Chrysler it was a piece of financial engineering that removed obligations from their balance sheets by shifting the responsibility for retiree health care to an independent trust, which in theory will have its own income stream. It lowered automaker borrowing costs for a time. But the funding never appeared in anywhere near the amounts promised to the UAW.

Girsky is president of S.J. Girsky and Company, an advisory firm based in New York. For the past three years, Girsky also has been an advisor to UAW President Ron Gettelfinger and the UAW’s executive board as the union dealt with demands for major concessions from automakers, Congressional critics and even the U.S. Treasury. He also previously worked for GM.

A significant part of the concessions involve retiree health care, which is now completely dependent on the VEBA. The union’s right to appoint directors at both GM and Chrysler Group has been controversial because critics suggest it gives the union too much power. However, Gettelfinger has said directors selected by the union would have solid credentials.

GM will be allowed replace more than half of the contributions that it owed to the VEBA with stock, and the remainder of the contributions will be replaced with a $2.5 billion note and $6.5 billion in preferred stock. These changes will save GM billions of dollars. “They also greatly increase the risks being assumed by retirees. Depending on the value of the company’s stock, the trustees of the retiree health-care trust fund may have to make further reductions in benefits in the coming years,” the UAW said.