The CEO of GMAC Financial Services (a joint-venture of the United States government) has been forced to resign on the eve of the company’s third recourse to taxpayer money.
Alvaro de Molina resigned at the request of GMAC Financial’s board of directors due to “mounting concerns in recent weeks about his leadership and his vision for the company,” The Wall Street Journal reports. It also notes that de Molina totally did not see it coming. The mutiny came at noon today.
Despite running the company for more than a year and a half, de Molina wasn’t exactly best friends with anyone on the board: It got an extreme makeover in May after GMAC Financial got a second round of federal money. Two of the company’s directors are Treasury appointees; he apparently had even lost the support of the guy who got him the job, Cerberus Capital Management chief Stephen Feinberg, whose private equity firm continues to own 22% of GMAC Financial. Feinberg was apparently none too pleased when de Molina moved to make the lender a bank-holding company, which resulted in a serious diminution of Cerberus’ control over GMAC Financial.
The departure of de Molina also means a delay in GMAC Financial’s third government bailout. While the company has requested up to $5.6 billion in new capital–it’s already gotten $12.5 billion–new CEO Michael Carpenter, the former Citigroup banker, has asked the Treasury to cool it for a bit while he checks out GMAC Financial’s finances.
As for its old CEO, might we suggest a comfortable landing in lovely Charlotte, N.C.? De Molina is a Ken Lewis protégé who served as CFO of Bank of America before leaving the firm in 2006. Now, his popularity with the company’s investors and employees may have been tarred by the fact that he’s lured 130 of the latter away from BofA over the last three years. But otherwise, he’s the perfect candidate: He’s an insider, he’s an outsider, he’s a Ken Lewis guy, he has experience working with boards of directors that don’t like him and he knows how to spend billions of Tim Geithner’s dollars.
Oh yea, and he’s unemployed and might actually take a job that literally no one else wants.
Let’s hear it: Give Al de Molina the Worst Job on Wall Street.
GMAC Chief Resigns [WSJ]
Al is most definitely NOT a Lewis guy. He left BAC because he was one of the few execs willing to stand up to KDL.
@1 yes totally agree here on the KDL reference. Al is by all means the anti Lewis. Come on Dealbreaker you usually are so good! Know this is a hot story, but maybe spend a little more time researching while trying to come up with a catchy intro line.
Speaking of BAC and potential successors, I’m looking forward to reading the running commentary on Moynihan’s congressional appearance tomorrow.
I hereby submit that the Maestro de Molina be given the blue convertible of Seinfeld’s Maestro and that he serve as Bess Levin’s chauffeur while they listen to angelic Baroque hymns emanating from the SuperSquid Blankfein’s newest CD, Just Doin’God’s Work for Man and Cephalopod Alike.
This is less about Ken Lewis and more about bailouts (in this case delayed GMAC 3rd bailout), GM’s continued massive unprofitability and Cerebus cutting its losses.
With de molina out, Fineberg has pulled the plug, watch now as Cerebus gets out and this whole operation folds.
Bye bye GMAC
There is nothing Al would rather do than come in and try to fix BAC, but the board has already crossed him off the list. And it’s unfortunate because he probably is the best candidate who is also willing to take the job. BAC’s board blows.
di molina is a very controversial figure. That is because he stands for integrity and excellence. He is possibly the most talented exec in banking. While in the public this makes him damaged goods, the reality is that this is just another example of his standards. he was pressured from all sides and never bent. I dont know him but I would workl for him in a heartbeat and would by any bank of america in size if he were chosen. not holding my breath though. the bac board does not have the same standards of excellence as dimolina
GMAC is toast and GM is in a world of hurt (even with C4C). Think De Molina wanted to double down with another bailout and the plug was plugged. If GMAC can’t make money with fresh bailout money and near 0% loans (and they couldn’t) then this company is done. Tough to make money with that ResCap shackle too!
Now watch Citibank take over GMAC’s business. How many tarp banks do we need to finance the trickle of carfinancing biz? Funny that they brought in a Citibank exec!