Management woes deepened at General Motors Corp. this week as the chief financial officer for the North American unit leaves and a ratings firm knocks the auto maker further into junk status.
Mary Boland, 48, reportedly leaves after 26 years with GM, the last two as CFO for the region. The turnover occurs as Fritz Henderson learns the ropes in his new job as global CFO.
And Moody's Investors Service has downgraded GM one more notch, citing fears the auto maker could resort to a declaration of bankruptcy if it cannot reduce costs and get its financial house in order.
The agency also questions the strength of finance arm General Motors Acceptance Corp., in which GM has been unable to sell a majority stake.
Standard & Poors cut its GM rating two notches in December, citing skepticism of GM's ability to revitalize operations in North America.
Included in the financial woes are negotiations between spun-off supplier Delphi Corp. and the United Auto Workers union to address labor costs.
GM has a vested interest with liability for employee pensions dating back to the terms of the 1999 spin-off, as well as concern that a breakdown in talks could incite a devastating strike at Delphi that could in turn cripple GM's assembly operations.
The International Union of Electrical Workers division of the Communications Workers of America currently is voting to authorize its leaders to call a strike if a deal cannot be reached. The larger UAW has not yet called for an authorization vote.
Additionally, GM reportedly filed on Feb. 17 for a seat on Delphi's creditors committee that has the power to negotiate a reorganization plan and is privy to otherwise confidential financial data.
The UAW and the Pension Benefit Guaranty Corp. already hold non-voting seats, and GM seeks similar status in a bid to protect its interests during Delphi's bankruptcy proceedings. GM is Delphi's largest unsecured creditor.
Objections to GM's request must be filed by March 6, in advance of a hearing on the motion March 9.
Delphi has said it will ask the court to void its labor contracts and cut retiree benefits if there is no agreement with the UAW by the extended deadline March 31. (See related story: Delphi Extends Deadline, Continues Talks)
