News flash:Corp.’s new head bean counter isn’t just interested in beans. That may not be big news at some companies, but at staid GM, a Chief Financial Officer who is as comfortable talking about diesel engines as he is currency rates is the same as “man bites dog.”
Right after GM CFO John M. Devine walked off the podium Wednesday morning following his keynote speech, conference moderator David E. Cole noted that it didn’t sound like the kind of presentation you’d expect from a CFO. Similar comments have been echoing through the halls of the Grand Traverse Resort since Mr. Devine had dinner with a small group of suppliers Tuesday night, where he apparently made a favorable impression. “He was very open and honest,” says a supplier executive who was at the dinner and admits to being impressed.
Yesterday he did the same job with reporters at a media lunch, where he displayed a depth of knowledge on a wide variety of product and legislative issues, from diesel engines to corporate average fuel economy.
When he did put on his CFO’s hat, Mr. Devine complained about the rising strength of the U.S. dollar compared with the yen and euro, and said it was leading to U.S. market share gains by imports from Japan and Europe. He stopped short of asking Washington to start trying to control the value of the dollar, but he said there has to be some recognition that the strong dollar “is destroying the manufacturing competitiveness of this country.”
Despite his concerns over global currency, he remains optimistic about GM’s future, saying that even with only 28% market share, the automaker can be profitable in a lackluster 16-million unit market.
Mr. Devine, whose official title is Vice Chairman & CFO, took over the job Jan. 1 following the early retirement of J. Michael Losh. Immediately prior to his appointment he was CEO of Fluid Ventures LLC, but he spent 32 years atMotor Co., rising to executive vice president and CFO before retiring in 1999.
Mr. Devine says he hasn’t changed his style and isn’t trying to redefine the role of CFO atCorp. Instead he insists that managing the automakers purse strings is merely one piece of a giant integrated business that is impacted by many other factors.
That was the gist of his presentation on Wednesday morning.
He charged that the U.S. auto industry isn’t hitting on all cylinders and needs to improve revenues, its cost structure, profits and cash flow.
He said too much production capacity worldwide – which leads to low capacity utilization of individual plants – is one of the biggest cost problems currently facing automakers.
The industry needs to reduce costs by utilizing assets more efficiently, while simultaneously increasing revenues via new types of products such as telematics and other “downstream” products that create revenue opportunities. Relatively small gains in all of these areas could lead to big profits down the road, he argues.