Printer Friendly

GMAC IMPLEMENTS EXTENSIVE PROGRAM APPROVED BY GM BOARD AND AUDIT COMMITTEE

 GMAC IMPLEMENTS EXTENSIVE PROGRAM APPROVED
 BY GM BOARD AND AUDIT COMMITTEE
 DETROIT, June 11 /PRNewswire/ -- The General Motors Corporation (NYSE: GM) Board of Directors and its Audit Committee have approved a comprehensive series of actions which the management of General Motors Acceptance Corporation (GMAC) is implementing to address the McNamara fraudulent export sales incident and to ensure there will be no recurrence of any such losses in the future, GM Chairman Robert C. Stempel announced today.
 Following a detailed review of the findings of a far-reaching internal investigation requested by the Board's Audit Committee, which uncovered no criminal activity or self-dealing by any officer, executive or employe of GMAC, the GM Board has approved a four-part program which includes: reinforcement of efforts to recover a significant portion of the McNamara loss; expansion of operating and control procedures at GMAC; replacement of the GMAC president and chief financial officer as well as the creation of a new senior management position to oversee major credit exposures; and disciplinary actions against a number of GMAC employes.
 "The General Motors Board and its Audit Committee believe the program announced today is necessary to further strengthen GMAC's organizational capability with respect to unusual financing activities and large credit exposures," Stempel said. "It follows the appointment of Robert T. O'Connell as chairman and chief executive officer of GMAC, succeeding John R. Edman who retired May 1, 1992.
 "The program provides assurance that substantial losses similar to the $171 million after-tax loss on the McNamara export fraud recorded in the fourth quarter of 1991 will not be repeated, and it also promotes continued confidence in GMAC's ability to sustain its record of otherwise outstanding performance, including total net income of $1.3 billion in 1991."
 The components of the GMAC program were detailed by O'Connell, senior vice president of General Motors and chairman of GMAC:
 -- The Reinforcement of Recovery Efforts. GMAC will vigorously
 pursue its efforts to seek recovery of a significant portion
 of the McNamara loss. Recently, substantially all of the
 assets of various entities owned by McNamara were
 forfeited and the U.S. District Court for the Eastern
 District of New York appointed a special trustee to control
 those assets. As a creditor and a victimized financial
 institution, GMAC will, among other things, present its
 claim to recover from the proceeds of the liquidation of
 those assets. GMAC is hopeful that the government's civil
 forfeiture process will prove, as intended when enacted, to
 be of assistance to defrauded institutions like GMAC.
 -- The Expansion of Operating and Control Procedures. The
 internal investigation did not reveal systemic problems with
 GMAC's operating and control procedures in its core business
 functions. However, GMAC is expanding its operating and
 control procedures, particularly those relating to unusual
 financing activities and major credit exposures.
 Specifically, procedures are being strengthened in the areas
 of export transactions, non-GM sourced and upfitter
 inventory financing, large credit concentrations, risk-based
 audit approaches and other areas. Many of these procedures
 are already being implemented and will provide further
 assurance that losses similar to those incurred as a result
 of McNamara's actions will not be repeated.
 -- GMAC Management Changes. The following changes are being
 made:
 - The promotion of John R. Rines to president and chief
 operating officer of GMAC, effective immediately,
 reporting to O'Connell. Rines has also been
 appointed a member of the General Motors Administration
 Committee. Rines, 44, previously was general manager
 of GM's Service Parts Operation in Flint. He held a
 variety of GM operating and financial assignments in the
 U.S. and overseas, including service as senior financial
 officer in Brazil and general manager of GM's Motors
 Holding Division. Rines replaces William J. Lovejoy.
 - The promotion of John D. Finnegan to executive vice
 president and chief financial officer of GMAC, effective
 immediately, reporting to O'Connell. Finnegan,
 43, was an assistant treasurer of General Motors in New
 York responsible for worldwide banking relations and
 overseas financing activity. Previously, he served as
 director of GMAC Strategic Planning in Detroit and as
 vice president of Finance of GMAC Mortgage Corporation in
 Philadelphia. Finnegan replaces George G. Fenner.
 - Fenner is retiring. Lovejoy will be on
 special assignment.
 - The appointment of a senior executive to fill the newly
 created post of vice president for Major Credit Exposures
 will be announced shortly. It will be the responsibility
 of this position to successfully manage unusual financing
 activities and large credit exposures.
 - The placement of Gene P. Whitlinger, currently executive
 vice president operations, on special assignment pending
 retirement on Sept. 1, 1992.
 - The appointment of John E. Gibson as group vice president
 of GMAC's North American Operations, effective
 immediately. Gibson, 49, previously investment
 manager at GM's Motors Holding Division, reports to
 Rines.
 - The appointment of Richard J. S. Clout as group vice
 president of GMAC's International Operations reporting to
 Rines, recognizing the growing importance and overall
 potential of this business sector which Clout, 43,
 currently heads.
 - The appointment of Dieter L. Nicodemus, 52, currently
 regional manager-Europe, as vice president-Europe,
 reporting to Clout.
 - The appointment of Jack R. Barrett as area vice president-
 Eastern U.S. and Canada, replacing Harry W. Yergey who is
 retiring. Barrett, 54, previously director of
 Corporate Communications for GMAC, reports to Gibson.
 - The appointment of Terrence P. Sullivan as vice president
 of Corporate Communications, replacing Barrett.
 Sullivan, 41, previously was manager, Media Relations for
 General Motors.
 - The appointment of Henry L. Davis as area vice
 president-Western U.S., replacing Peter Van Cott who is
 retiring. Davis, 50, previously vice president-Staff
 Administration for GMAC, reports to Gibson.
 - The appointment of Joseph D. Taylor as vice
 president-Staff Administration, replacing Davis.
 Taylor, 49, previously was GMAC's regional manager of the
 Atlanta (East) Region.
 - The appointment of F. Joseph McPartlin, 55, currently
 director-Retail Leasing, as vice president-SmartLease and
 Special Financing.
 - The appointment of Frederick A. Henderson, 33, currently
 vice president Finance, as group vice president-Finance,
 reporting to Finnegan.
 - The appointment of Robert C. Folbigg, 55, as head of
 GMAC's internal audit staff, reporting to Henderson.
 Folbigg was comptroller of GMAC. He undertakes his
 new post with a mandate to expand and upgrade the
 capability of the audit staff. Gerald E. Gross, 51,
 formerly assistant comptroller, has been appointed
 comptroller, reporting to Henderson. David J.
 Knipper, 50, previously head of GMAC's internal audit
 staff, has been appointed assistant comptroller.
 -- Disciplinary Action Against Other GMAC Employes.
 - Appropriate disciplinary action is being taken against
 other executive office employes and numerous employes at
 GMAC's Smithtown, New York branch office which serviced
 the McNamara account. These include the replacement of
 the current Smithtown branch manager as well as two other
 current branch managers who had previously served at
 Smithtown as branch manager and assistant branch manager.
 "GMAC has a tradition of excellence dating back over 73 years. Since 1980, it has been the largest profit contributor of any GM business sector," O'Connell said. "This success is due to the rigorous efforts of the 19,000 men and women in GMAC's worldwide organization. It has been based on a skillful assumption of credit risk.
 "The program announced today will have no impact on GMAC's vigorous extension of credit in its core business activities. In fact, it underscores GMAC's continuing commitment to provide quality and competitive financing, insurance and mortgage products to its customers."
 -0- 6/11/92
 /CONTACT: Terry Sullivan or Jack Barrett of General Motors, 313-556-2019/
 (GM) CO: General Motors Corporation; General Motors Acceptance Corporation ST: Michigan IN: AUT SU: PER


JG -- DE007 -- 9166 06/11/92 10:25 EDT
COPYRIGHT 1992 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Jun 11, 1992
Words:1241
Previous Article:PRACTICAL COMPUTER LEARNING CENTER OPENS IN BOCA
Next Article:QUAKER DECIDES NOT TO SELL ITS ITALIAN EDIBLE OILS BUSINESS
Topics:


Related Articles
GENERAL MOTORS ACCEPTANCE CORP. SENIOR DEBT RATED 'A-' COMMERCIAL PAPER RATED DUFF 1
GM, GMAC RATINGS AFFIRMED BY FITCH AFTER GMHE ANNOUNCEMENT -- FITCH FINANCIAL WIRE --
GMAC COMMERCIAL PAPER AFFIRMED; GM, GMAC SENIOR DEBT ON FITCHALERT NEGATIVE -- FITCH FINANCIAL WIRE --
GM, GMAC $48 BILLION SENIOR DEBT LOWERED TO 'A-' BY FITCH
GMAC 1993 EARNINGS RESULTS
GMAC ANNOUNCES THE 1994 GM COLLEGE GRAD PROGRAM
GM CARD TESTS FINANCIAL SERVICES OFFERING
General Motors Acceptance Corporation Forms Joint Venture With PNA Ltd. To Finance Automobiles
General Motors Presents Improvements in its Minority Dealer Development Program to National Association of Minority Automobile Dealers.
GM Names Feldstein to Lead GMAC.

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters