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GM Names Chief of Finance Unit

Eric Feldstein will be the new head of GMAC. He replaces John Finnegan, who was appointed CEO at insurer Chubb.

November 04, 2002|From Bloomberg News

DETROIT — General Motors Corp. named Eric A. Feldstein on Sunday to head its General Motors Acceptance Corp. finance unit, replacing John D. Finnegan, who was named chief executive at Chubb Corp.

Feldstein, 43, has been vice president of finance at General Motors since June 2001 and corporate treasurer since December 1997, the company said in a statement. He has been with General Motors since 1981.

GMAC had third-quarter earnings of $476 million, up from $437 million a year ago, while the parent company had a net loss of $804 million, or $1.42 a share, up from $368 million, or 41 cents, a year earlier.

"It's a huge financial services company in its own right," spokeswoman Toni Simonetti said of GMAC.

The finance unit helps administer the automaker's no-interest loans. GMAC borrows money at market rates and the parent company pays the unit the difference, Simonetti said. General Motors has used no-interest loans to spur auto sales over the last year.

Feldstein, in the new post, will become a member of General Motors' Automotive Strategy Board, which helps decide major auto issues at the company, Simonetti said.

"Eric brings strong firsthand GMAC experience, financial expertise and leadership skills to this new assignment," GM Chief Executive Rick Wagoner said in a statement. "I know he will build upon the great work of the GMAC team to continue to be a profitable and preeminent financial services company."

Feldstein has a bachelor's degree in economics from Columbia University and received a master of business administration degree from Harvard University under the GM Fellowship Program in 1985.

A successor to Feldstein was not immediately named.

Finnegan, 53, will replace Dean R. O'Hare as CEO of Chubb effective Dec. 1. O'Hare is retiring after 39 years with the company.

The insurer also named director Joel J. Cohen as nonexecutive chairman. Cohen, 64, is a former managing director at Donaldson Lufkin & Jenrette Inc. and has been a Chubb director since 1984.

Chubb also named Thomas Motamed to be vice chairman and chief operating officer, and promoted John Degnan and Michael O'Reilly to vice chairmen.

Finnegan and Cohen are taking over a company that recently set aside $625 million to pay for future asbestos claims. Chubb has been raising prices across all lines of business, though some investors say they worry that the company still faces bigger-than- expected claims from directors' and officers' liability policies because of corporate scandals.

The board decided to separate the chairman and CEO functions "in accordance with best practices in corporate governance," the company said in a statement.

"As Chubb's senior outside director, Joel Cohen is thoroughly familiar with the company and its operations, and he will play a key role in orienting John with the company and the board," O'Hare said.

The appointments come after Chubb posted a third-quarter loss of $242.1 million because of asbestos claims. Investors say the asbestos reserve increase should help smooth the transition and eliminate a drag on earnings growth.

The appointments also end a seven-month search that had many investors worried that Chubb's inability to find a CEO might indicate problems with its financial strength.

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