Christine Tierney / The Detroit News
General Motors Co. Chairman and CEO Edward Whitacre Jr. reached outside the auto industry to recruit a new chief financial officer from software giant Microsoft Corp.’s senior ranks.
Microsoft CFO Christopher Liddell, 51, will become vice chairman and CFO of GM in Whitacre’s latest move to speed up a cultural transformation at the struggling U.S. automaker.
With Liddell’s appointment, announced Monday, GM hopes to improve its financial management, which was criticized by members of President Barack Obama’s auto task force as being among the worst they’d seen at a large corporation.
Liddell brings impressive experience and qualifications to GM: He holds a degree in engineering, ran a big forest products company in his native New Zealand and, as CFO of Microsoft, helped draft a $3 billion cost-cutting plan.
“Chris brings a depth and experience to this job that were unmatched in our search for a new financial leader,” Whitacre said in a statement.
Liddell is Whitacre’s first major hire since he pushed out former CEO Fritz Henderson on Dec. 1 after the two clashed repeatedly. GM also was seeking a replacement for CFO Ray Young during the critical period leading up to a public stock offering within the next two years. Young will move to China to be vice president of international operations.
With his background, Liddell will be much more than a numbers-cruncher, said longtime auto analyst Maryann Keller of Maryann Keller and Associates in Stamford, Conn. “There are CFOs who are sort of nitty-gritty numbers guys, and then there are CFOs who are really partners in the strategic and business management of the company — and I think that’s what he is.”
As a GM vice chairman and CFO, Liddell will have a clear shot at succeeding Whitacre, 68, who has said he does not want to be a long-term chief executive.
Liddell apparently doesn’t want to be a long-term CFO, either. Microsoft said last month that Liddell would leave at the end of the year to seek “opportunities that will expand his career beyond being a CFO.”
Liddell faces enormous challenges at GM. As the top financial executive, he will manage the repayment of GM’s federal loans, which Whitacre wants done by July, and prepare the automaker, now controlled by the U.S. government, to issue public shares.
“This is a great situation for him,” said David Cole, chairman of the Center for Automotive Research in Ann Arbor. “You never want to come into a company when it’s flying high. You want to come into a company when it’s turning around because that’s when you can achieve something.”
GM is now hampered in its hiring efforts by government-imposed limits on what it can pay executives, but they stand to make a lot of money if they can turn the company around.
“Whatever compensation these people are getting,” Cole said, “when this company goes public, the officers will make an absolute ton of money.”
The fact that Liddell is an outsider “is a plus,” Keller said.
“The auto industry is so insular. The fact that all three (U.S. auto) companies are based in southern Michigan prevented the kind of thinking and access to new ideas that might have prevented them from getting into the kind of trouble they got into.”
This year, GM and Chrysler LLC — now Chrysler Group LLC — went into bankruptcy to shed costs they’d taken on in generous labor contracts and other financially unwise accords. In the four years leading up to its bankruptcy, GM lost more than $80 billion.
Ford Motor Co., which looked outside the industry when it hired Boeing Co. executive Alan Mulally to be CEO in 2006, has fared better. Ford avoided bankruptcy after mortgaging its assets to bolster its cash position before the industry plunged into a horrendous downturn late last year.
In contrast to Detroit’s Big Three, which are losing ground globally, Microsoft is one of the strongest players in its industry.
“In the software space, they’re regarded as best in class,” said Zeus Kerravala, a technology analyst at Boston-based Yankee Group. He said “an attitude of winning” permeates Microsoft.
The Redmond, Wash.-based giant is innovative and aggressive in the marketplace, but is financially conservative, said Jon Oltsik, senior principal analyst at Enterprise Strategy Group, a technology analysis firm in Milford, Mass.
“They’re cost-conscious, but not afraid to invest in things they need to invest in,” Oltsik said. “It’s a company where the CFO has a pretty strong management role.”
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