Steve Miller, who calls himself “The Turnaround Kid” after a career spent helping hobbled companies survive, has another rescue mission as chairman of bailed-out insurer American International Group Inc.
Miller was named AIG’s chairman yesterday. A restructuring specialist, he has overseen the bankruptcy of Delphi Corp., once the largest U.S. auto-parts supplier, and helped Chrysler Corp. return to profitability after taking government loans in 1980. He’s been chief executive officer at Waste Management Inc., Federal-Mogul Corp. and Bethlehem Steel Corp.
“He’s not just an auto guy,” said Maryann Keller, president of Maryann Keller & Associates in Stamford, Connecticut. “He’s a finance guy who has had his share of troubled situations. He’s a pragmatic businessman who knows how to operate in these situations.”
Miller, 68, will work alongside CEO Robert Benmosche as New York-based AIG seeks to sell assets and repay a government bailout that has swelled to $182.3 billion. He rose to chairman when Harvey Golub stepped down after feuding with Benmosche over the stalled divestiture of an Asia division.
“Steve is not a big-ego guy,” said former General Motors Co. CEO Fritz Henderson, who faced off with Miller during the Delphi restructuring. The two companies had intertwining labor contracts and wrangled over billions in employee and retiree obligations. “He is the type of person who can work with Robert Benmosche.”
Miller and Golub were named to the AIG board in May 2009 in the first nominations since the U.S. government assumed control of the insurer. AIG turned over a stake of almost 80 percent as part of the bailout and the Treasury Department holds additional preferred shares from subsequent investments.
Miller wrote an autobiography called “The Turnaround Kid” in April 2008. In the book, he looked back over a career that started at Ford Motor Co. in 1968.
“If there’s been a company in trouble over the last 20 to 30 years, he may have had some assistance or role in it,” said Mike Wall, a Northville, Michigan-based analyst with research firm IHS Automotive. “The man is very skilled and adept at turning companies around.”
Sometimes that’s meant slashing salaries and cutting expenses, an approach that may not work for AIG, said Clark Troy, a senior analyst based in Chapel Hill, North Carolina, for Aite Group, a research firm.
Robert S. Miller, known as Steve, placed Delphi into bankruptcy in 2005 after failing to win wage cuts from employees and labor unions. He’d tried to trim wages to as little as $12.50 an hour from $27, leading union workers, most of them represented by the United Auto Workers, to threaten a 2006 strike. Miller stepped down after lenders and General Motors agreed to buy most of the company.
“He is a cost-reduction guy and AIG is not going to be able to cut its way out of this,” Troy said. “He’ll have to find a way to leverage the value that remains in AIG.”
That will mean finding common ground with Benmosche on a sale or initial public offering of AIA Group Ltd. An IPO was planned until Prudential Plc agreed in March to buy the unit. After Prudential balked at the $35.5 billion price, AIG’s board rejected a reduced bid Benmosche had supported, according to two people with knowledge of the dispute. Benmosche threatened to resign last month unless Golub left, the people said.
“Benmosche is the key player here,” Troy said. “Miller becomes a key guy with managing the relationship with Washington.”
Miller had to work with government officials during the turnaround of Chrysler, which took $1.5 billion of taxpayer loans in 1980 to avoid bankruptcy. He was one of the architects of the bailout at the automaker, which was able to repay the loans seven years early.
Miller has also led rescue efforts at Bethlehem Steel, Waste Management and auto-parts supplier Federal-Mogul, and was an adviser to Aetna Inc. He’s chairman of MidOcean Partners, a private-equity firm based in New York and focused on the U.S. and Europe.
A graduate of Harvard Law School, Miller has a master’s of business administration from Stanford University’s Graduate School of Business.
“He’s just been through so many tough spots and survived,” said David Cole, chairman of the Center for Automotive Research, who has known Miller for more than 30 years. “You could almost say he’s a glutton for punishment, but deep down inside he must love this.”