--Two positions are among six spots Treasury has the right to
appoint to Ally's board
--Company is trying to sever itself from government
ownership
--Company put plans for IPO on hold last year
(Updated with new details about board appointments in paragraph
seven.)
By Tom Barkley and Andrew R. Johnson
WASHINGTON--The U.S. Treasury Department announced two
appointees to Ally Financial Inc.'s board of directors, exercising
its right as part of its bailout of the largest U.S. auto lender
during the financial crisis.
The two new board members have experience with restructurings,
as well as the transportation sector, the Treasury said. They were
approved at an Ally shareholder meeting along with the re-election
of current board members.
The move comes as Ally has taken several recent steps to sever
itself from the mortgage business and focus its attention solely on
its U.S auto-lending operations in an effort to get out from
government ownership.
Gerald Greenwald, founder of private-equity firm Greenbriar
Equity Group, focused on transportation, was previously chief
executive for United Airlines and held senior positions at Ford
Motor Co. (F) and Chrysler.
Henry Miller, who has served as chairman of Marblegate Asset
Management LLC since it was formed in 2009, has played a leadership
role in restructurings for a number of firms.
Timothy Massad, assistant Treasury secretary for financial
stability, said the two men will contribute to Ally's "efforts to
repay taxpayers and support the auto industry recovery."
The two positions are among the six spots Treasury has the right
to appoint to Ally's board as part of the government's bailout of
the company. In February 2011, the Treasury appointed John Durrett,
a director emeritus with McKinsey & Co., to the company's
board, bringing the number of slots it filled at the time to
four.
In May, Ally's money-losing mortgage subsidiary Residential
Capital filed for Chapter 11 bankruptcy as part of a plan that
would enable its parent to distance itself from costly litigation
over soured mortgage investments, which have stalled Ally's efforts
to repay a government bailout that topped $17 billion. The Treasury
Department said at the time it would support ResCap's move, Dow
Jones Newswires reported in May.
The Detroit lender also is seeking bidders for its international
businesses, which Ally hopes to sell by the end of the year. That
step could further reduce the government's investment in Ally by a
third, executives have said. The company, which received $17.2
billion, has paid $5.7 billion to the Treasury.
As of late July, Ally had received bids for the operations,
which include auto-lending and banking businesses, from more than
30 parties, Michael Carpenter, chief executive officer of Ally,
said in an earnings conference call earlier this month. One of
those bidders is General Motors Co. (GM), Ally's former parent,
which this week confirmed it had submitted an offer for the
businesses.
"Our intention is to find a way to get as much of those proceeds
as the Federal Reserve will allow back to U.S. Treasury in the most
efficient fashion," Mr. Carpenter said.
Ally has tried for more than two years to accelerate the
government's exit from the company. Last year, the company planned
an initial public offering, which it ultimately scrapped as
mortgage litigation mounted and financial markets foundered. Mr.
Carpenter repeatedly has said the company's best hope for success
is to distance itself from ResCap, which bogged down Ally with its
bet on subprime-mortgage lending that forced Ally to seek
government aid.
An IPO could be a possibility after ResCap's bankruptcy and
Ally's international sales are completed, Mr. Carpenter said, as
could a merger or an acquisition.
"We have a lot to do right now so we have to do that first," Mr.
Carpenter said.
Ally, the largest U.S. auto lender, is the former in-house
financing arm of GM and was previously known as GMAC. It is now
74%-owned by the U.S. government. A significant part of the
company's business remains financing GM dealers and customers, as
well as those of Chrysler Group LLC.
Write to Tom Barkley at tom.barkley@dowjones.com and Andrew R.
Johnson at andrew.r.johnson@dowjones.com
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