GMAC Gets New President - William F. Muir

DETROIT February 11 2004;John Porretto writing for the AP reported that General Motors Corp. on Wednesday appointed company veteran William F. Muir to run its General Motors Acceptance Corp. financial arm, which contributed heavily last year to the bottom line at the world's largest automaker.

As president of GMAC, Muir will report to Eric A. Feldstein, who was named chairman of the division in November 2002. The position of president had been vacant since that time.

Muir, 49, will oversee GMAC's global automotive finance and insurance operations -- a business whose earnings accounted for roughly three-quarters of the automaker's total net income in last year's fourth quarter.

Muir, who takes on his new job March 1, has been GMAC's chief financial officer since 1998 and chairman of GMAC's Insurance Group since 1999. He joined the company in 1983.

"This further strengthens GMAC's leadership structure and will help them build on their strong results," GM chairman and chief executive Rick Wagoner said in a statement. "Bill has done a tremendous job managing GMAC's capital requirements through turbulent market conditions."

GMAC earned $630 million in the fourth quarter -- a record for the period. For the year, GMAC reported income of $2.8 billion, up from $1.9 billion in 2002. Income from mortgage operations more than doubled, though many observers say that side of the business is likely to moderate this year as the wave of mortgage refinancing fades and national fiscal policy likely tightens.

Sanjiv Khattri, 39, will replace Muir as GMAC executive vice president and CFO. Khattri, currently GM's assistant treasurer, will be in charge of GMAC's global funding, financial reporting and risk management activities.

The changes at GMAC came a day after the division announced a settlement in a class-action lawsuit charging racial bias in lending policies. As part of the settlement, GMAC will contribute $1.6 million to fund programs geared toward educating and assisting minority consumers with credit financing.

GMAC also agreed to a markup cap of 2.5 percentage points on loans with terms up to five years, and a cap of 2 percentage points on extended-term loans.

The suit, filed in 1998 on behalf of plaintiffs in Tennessee, alleged that as a result of GMAC policies, dealers routinely charged black consumers higher interest rates on auto loans than whites with similar financial histories.