GMAC Says CEO de Molina Quit, Delays U.S. Infusion (Update1)

Nov. 16 (Bloomberg) -- GMAC Inc., the auto and home lender bailed out twice by the U.S., said Alvaro de Molina resigned as chief executive officer, and the firm asked the Treasury Department to postpone a third infusion of taxpayer money.

Michael A. Carpenter, 62, was named CEO, according to a statement today from the Detroit-based lender. Carpenter held CEO roles at Citigroup Inc.’s Global Corporate & Investment Bank, Salomon Smith Barney, Travelers Life & Annuity and Kidder Peabody & Co., and is resigning from the board of CIT Group Inc., the bankrupt commercial lender, the statement said.

“I came to GMAC thinking that it was a short-term assignment working through a liquidity crisis,” said de Molina, 52, in the statement. “That crisis lasted two years. With the help of government support and the incredible efforts of our team, we are now on stable footing, positioned for profitability in 2010 and beyond. It is a good time for me to move on.”

GMAC benefited from $13.5 billion in government aid after the U.S. decided the lender was crucial to the survival of the U.S. auto industry. The firm said today it asked the Treasury to delay a new injection from the Troubled Asset Relief Program that was being negotiated until Carpenter assesses GMAC’s needs. The company was seeking as much as $5.6 billion.

Chairman Franklin W. Hobbs asked de Molina to leave at midday meeting, the Wall Street Journal reported, citing people familiar with the matter. The board was concerned about his leadership and vision for the company, the Journal said.

Cerberus Role

“That decision was 100 percent a decision by the board of directors,” said Andrew Williams, a Treasury spokesman. The U.S. has a 35.4 percent stake in the firm.

De Molina clashed with Cerberus Capital Management head Stephen Feinberg, who holds a seat on GMAC’s board, the Journal reported. His investment firm owned a controlling stake in GMAC before the U.S. bailout, and now holds a minority stake. Automaker General Motors Co., GMAC’s former parent, also retains a stake.

De Molina had joined Cerberus in June, 2007 following a career at Bank of America Corp. He was named GMAC’s chief operating officer in August 2007 and became CEO in April 2008. The lender cited de Molina for his help in converting GMAC into a bank holding company, a change that helped make it eligible for U.S. aid, and the establishment of Ally, its online consumer bank. Ally lured deposits with above-market interest rates and an advertising campaign that satirized deceptive practices in the banking industry.

Losing Money

De Molina’s name surfaced in speculation about who will succeed Kenneth D. Lewis, 62, as CEO at Bank of America, the biggest U.S. lender, where de Molina was once the chief financial officer. The bank isn’t planning to offer him the job, according to a person familiar with the selection process. De Molina recruited more than four dozen former Bank of America executives to GMAC, including Chief Risk Officer Sam Ramsey, Treasurer Jeff Brown and Chief Marketing Officer Sanjay Gupta.

De Molina declined to comment via e-mail.

Carpenter, a Harvard Business School graduate, takes over a company that reported losses in eight of the past nine quarters, driven in part by defaults on home loans. The firm’s Residential Capital LLC unit has ranked among the biggest U.S. mortgage lenders and once was among the largest sellers of subprime mortgages, which helped trigger the credit crunch.

Analysts and bond investors have urged GMAC to sever ties with ResCap, raising speculation about bankruptcy for the unit. GMAC doesn’t have any publicly traded stock.

Carpenter’s Career

Carpenter was named to the board in May as part of its agreement with the government to become a bank holding company. At the time he was chairman at Southgate Alternative Investments, a firm he founded in 2007.

He joined Travelers in 1994 to run its life insurance division after leaving Kidder, Peabody & Co. He became co-head of Salomon in 1998 with Victor Menezes, and sole head of the investment bank in 2000. In September 2002, he was replaced by Charles “Chuck” Prince and went on to oversee Citigroup Alternative Investments, the company said.

“We have a special obligation to the public to do everything we can to ensure GMAC succeeds,” Carpenter said in the statement. He said that resolving the mortgage unit’s problems and repaying the U.S. are among his priorities.

To contact the reporter on this story: Dakin Campbell in San Francisco at dcampbell27@bloomberg.net

To contact the editors responsible for this story: Alec D.B. McCabe in New York at amccabe@bloomberg.net; Rick Green in New York at rgreen18@bloomberg.net.