Wednesday, December 23, 2009

GM Hires New CFO

Cost cutting seems to be the focus for new GM CFO Christopher Liddell, who will be coming over from Microsoft, where he was their CFO; the one bullet point on his resume seems to be overseeing a $3 billion cost-cutting plan there. He has an engineering background, which should serve him well, for he can understand the development process better than a pure finance guy.

The difference between GM and Microsoft is that he’ll be working from a position of weakness, where the cost-cutting will be a necessity, rather than a desired item for a very profitable company. Also, having to work in a very competitive industry will be different from a company where they are used to a near-monopoly in the operating system business and some strong pricing power in the office-software business; that seems more like the GM of the 1960s rather than the 2010s.

He comes on board just after GM came to terms with the Teamsters over a car-hauling contract, so those cost-cutting measures are unlikely to directly impact the car-transport industry. Working with the UAW will be a challenge, but lessened by the fact that they own a majority of the company; cost cutting will be harder in a blue-collar unionized environment rather than a white-collar non-unionized setting.

However, the secondary effects may be as dramatic. There are still ongoing negotiations over how many dealerships to close, as a lot of dealers shuttered during the closings from earlier this year. If Liddell holds a hard line on those closures, it will be harmful to car haulers, since there will be fewer dealers to haul to.


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