Ally Financial Inc., the US auto lender that survived through a government-sponsored bankruptcy bailout, has decided to put Jeffrey J. Brown in charge as chief executive officer, with Michael A. Carpenter leaving all his positions.
Carpenter, the former CEO is also vacating his board position and Brown, 41, will fill in the role as he works closely with Chairman Franklin “Fritz” Hobbs “on all areas of the business,” according to a company statement released recently. Carpenter, 67, managed the company and switched its focus on auto lending and reducing expenses after it needed a $17.2 billion rescue from the US Treasury Department, which divested its last stake holding in December after previously owning as much as 74% of the firm. Analysts say that Brown was seen as the heir apparent for quite a while, though the decision to immediately step down by Carpenter is seen as surprising. “Having completed our IPO last April and exited TARP in December with a strong balance sheet and a market-leading position, it is the right time for me to step aside,” commented Carpenter, referring to the Treasury Department’s Troubled Asset Relief Program.
But the company has lost more than 26% of its value since the IPO and regulatory scrutiny is increasing over the segment, intent on cracking down on subprime auto lending as their clients begin to all behind on payments. The company also faces increased pressure after GM announced it mulls internal financial support from its lending division for most of its cars from now on. Brown’s latest appointment was as president and CEO of Ally’s Dealer Financial Services business, directing automotive-finance, servicing and insurance operations. He was also since June 2011 the senior executive vice president of finance and corporate planning.