GMAC Financial Services said on Monday that Alvaro de Molina has stepped down as CEO, a surprise departure that comes as the troubled auto lender remains in negotiations with the government over its third round of taxpayer aid.
A person familiar with the situation said De Molina was asked to step down by GMAC’s board of directors. The person declined to be named because the reasons behind De Molina’s exit have not been made public.
US Treasury Department officials stressed that they had nothing to do with Molina’s departure, calling the decision “100 percent GMAC’s.”
That is in contrast to the government’s ouster earlier this year of General Motors (GM) CEO Rick Wagoner, who was pressured to step down as a condition for taxpayer aid.
GMAC director Michael Carpenter will take over as CEO. In an interview, Carpenter affirmed that no government entity had any say in De Molina’s departure.
“To the contrary, the board reached its own conclusions,” Carpenter said. “As the board looked forward, it decided that it really wanted some more strategic skills. It wanted more turnaround skills, more operations skills. So that is, in short, the basis I believe for a change.”
De Molina’s resignation comes as the lender is negotiating with the Treasury Department over additional taxpayer aid. GMAC is instrumental to the operations of automakers GM and Chrysler Group LLC, but its finances have been haunted by bad loans it made during the housing boom.
GMAC provides the financing for dealers and customers of GM and Chrysler and its survival is a crucial part of the US administration’s restructuring of the auto industry.
Carpenter said in an interview that providing auto financing was the company’s No. 1 priority. Paying back the federal government ranks No. 2.
GMAC, which became a bank holding company late last year, has received US$12.5 billion in taxpayer money and is 35 percent owned by the federal government.
The Federal Deposit Insurance Corp also took the rare step earlier this year of allowing the junk-rated company to gain access to its debt-guarantee program, called the Temporary Liquidity Guarantee Program.
It agreed to guarantee up to US$7.4 billion in GMAC-issued debt in case the company defaulted on payment.
However, results of the federal government’s “stress tests” earlier this year demanded that GMAC raise US$11.5 billion in capital cushion to help it weather further economic decline. Of 10 banks asked to raise additional cash, GMAC was the only one that failed to be able to raise the funds privately.
De Molina’s exit ends a tenure that lasted less than two years.
GMAC declined to make him available for interviews, but he said in a statement it was a “good time for me to move on to my next chapter.”
“I came to GMAC thinking that it was a short-term assignment working through a liquidity crisis. That crisis lasted two years,” De Molina said.
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