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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