The relatively unsung new CEOs of Ford Credit and General Motors Acceptance Corp. (GMAC) are unsung no more. Ford Credit’s Gregory C. Smith and GMAC’s Eric A. Feldstein are drawing media attention for straightening out their companies’ financial problems and contributing substantially to their parent automakers’ performances, as well.
Smith, a 30-year Ford veteran who became Ford Credit CEO last year, brought Ford Credit back from a money-losing streak in late 2001 and early 2002, rolling up profits so dramatically through the first half of 2003 that he paid the struggling Ford Motor Company dividends a total of $1.9 billion in the first half of this year.
Feldstein, who began his GM career in the corporate treasurer’s office in 1981, became chairman and CEO of the 84-year-old GMAC in November, 2002. He previously served as GM treasurer, a job held by three former CEOs of GM, and has guided GM and GMAC through the amazingly successful zero percent loan and hefty cash rebate incentive programs on new models.
Smith, a gregarious former engineer who joined Ford Credit in 1991, steered the financial institution out of the inflated-lease and nonprime pits dug by his predecessor as CEO, Donald Winkler. He folded nonprime lender Fairlane Credit, all but eliminated financing of non-Ford brand vehicles and slashed the volume of Red Carpet leases.
Focusing on core products and services – meaning those related strictly to Ford brands – became a mantra for Smith last year. The realignment of top management also was implemented by Smith, who promoted Michael Bannister to Ford Credit president August 1 from the presidency of Ford Credit International.
Ford Credit chalked up net profits of $843 million in the first half of 2003, compared to $586 million a year earlier. A retrenchment program was ordered by Smith in July, but no jobs are to be eliminated out of Ford Credit’s 22,000-employee workforce – although departing employees will not be replaced, and overtime will be reduced.
No dealer services are to be cut, either, according to Smith, whose oversight includes subsidiaries Primus Financial and Triad Financial, a nonprime specialist.
Feldstein, interviewed by the Detroit Jewish News (August 15), took charge of a GMAC whose earnings and profit results this year also have been exemplary. His first stint with GMAC started in 1996, when he moved from New York to Detroit as executive vice president of the lender’s mortgage group.
A computer system analyst with degrees from Columbia University and Harvard’s business school, Feldstein has earned high marks from his GM bosses, Chairman and CEO Rick Wagoner and Vice Chairman and CFO John Devine.
“He’s leading GMAC toward another great year of earnings growth performance,” said Wagoner, also an alumnus of GM’s powerful financial staff. Devine, previously CFO of Ford, where he was a colleague of Ford Credit’s Smith, said Feldstein “was instrumental in bringing innovative and disciplined practices to the finance group.”
If Feldstein, 44, follows the track to the helm of GM, either as president or chairman, he would be the first of Jewish descent in either post, and the youngest GMAC CEO in the No. 1 automaker’s 95-year history.
