General Motors staff has IPO dreams
Ever wonder how General Motors is holding onto its top talent?
After a traumatic bankruptcy and series of federal bailouts, the company still owes billions of dollars to the U.S. and Canadian governments. It lost $1.2 billion in its latest quarter, and only sees a slight uptick in auto sales next year.
The days of banner-year profits and bonuses must seem far off for GM’s executives and finance staff. GM’s Chairman has already said pay caps imposed on companies by the U.S. government’s pay czar make it tough to hire executives.
While other job opportunities are obviously limited in Detroit, and they may have nowhere better to go in the industry, the company’s plans for a 2010 IPO has emerged as a key staff retention tool, one of its top executives said on Tuesday.
In comments to the Financial Executives International Current Financial Reporting Issues conference in New York, Nick Cyprus, vice president, controller and chief accounting officer at GM said:
“I have a tool that my peers don’t have. We have an IPO coming up in the next half-a-year to a year or whatever it takes. That’s a great tool, too. Getting the experience of taking General Motors public again is not only a great tool from an experience perspective and resume builder, but it’s also a great experience in that if things work out well there are potential wealth opportunities. In essence, the taxpayers get paid back and people who have delivered get an opportunity to make some money.”
GM is planning to arrange a revolving line of credit in preparation for an eventual IPO, which would probably be one of the biggest in 2010 if it is able to keep up with its time schedule.
Road to fortune or highway to hell?
That will ultimately be the question asked about what kind of a future the German carmaker Opel faces.
Parent General Motors said on Thursday that it indeed wanted to sell a majority stake in the unit to Canadian auto parts group Magna and Russia’s Sberbank, a decision long favoured by the German government under Chancellor Angela Merkel.
With about two weeks to go until a general election in Europe’s biggest economy, this would clearly be a political victory — but the question remains whether it will also be an economic one.
Merkel said that GM’s recommendation — which would see Magna’s Brussels-listed rival bidder RHJ International losing out in the battle that has dragged on for months — is going to be tied to conditions.
Although she said that those conditions would be manageable and negotiable, doubts remain about whether this will be the new beginning the company is hoping for.
“The most meaningful choice would have been a global company that produces several millions of cars (per year), such as GM or a Chinese producer. Magna is not a producer of cars in the classic sense, and I could imagine that some other producers could be upset about the decision. As a consequence, Opel may lose some contracts,” said NordLB analyst Frank Schwope.
“This seems to be a political decision rather than an economical one.”
Better late than never?
Is now the time to be bulking up in M&A and other kinds of corporate finance advice?
On Monday, Societe Generale trumpeted the hire of a top French dealmaker from JPMorgan — the auspiciously named Thierry d’Argent — and reiterated its big plans for European M&A. Daiwa Securities SMBC agreed to buy mid-market corporate finance house Close Brothers Corporate Finance. Meanwhile Barclays Capital is making lots of equity markets hires, and says it aims to be one of the world’s top full-service investment banks.
As I wrote:
“A clutch of banks with previously limited reach in European takeovers and other corporate advisory work are betting now is a good time to grab market share — before the dealmaking business recovers.
“There are experienced bankers on the job market at bargain prices after the bloodletting of the financial crisis, while others who survived the culls are restless, recruiters say.
“Advisory businesses, like the one Japanese banks bought in Britain on Monday, offer institutions the prospect of lucrative fees and follow-on work without gobbling up precious capital. But the latecomers may find they are chasing a limited pool of deals, competing with both better-established rivals and with newly emboldened boutiques fresh from their own hiring sprees.”
The best bankers never got sacked or are already hired again, if you’re in the market to buy a bank though, then there are some real gems to be found. For instance ING and RBS in Europe, they are still a steal and a great opportunity for a bank looking for an European network.
Graduating MBA? Tough luck
The bear market’s message to MBA graduates – tough luck.
MBAs who graduate during a bear market may never get the chance to start a Wall Street career, which means they would earn significantly less over their lifetime than those who graduated when things were rosy around them, a Stanford business school study shows.
The proportion of graduating MBAs who manage to get hired into lucrative investment banking positions shrinks or expands depending on how well the stock market is performing in a given year, according to the study by Paul Oyer, an associate professor of economics at the Stanford Graduate School of Business. The study is based on the long-term career choices and salaries of the school’s graduates over 35 years.
More than a quarter of Stanford MBAs who graduated two years before the stock market crash of 1987 became investment bankers, but only 17 percent graduates two years after the crash took that career path. And investment bankers were estimated to make a lot more over their lifetimes than those who went on a different path.
(Photo: Graduating student Abel Charron displays a “Hire me” sign before the 2007 USC School of Cinematic Arts commencement at the University of Southern California in Los Angeles, in this May 11, 2007 file photo. REUTERS/Mario Anzuoni/Files)
Hiring MBAs this summer? Join our Desperate Interns Drive
It’s the end of April, which means that a bunch of first-year MBA candidates are freaking out about not having summer internships lined up yet. But we’re here to help, with our annual Desperate Interns Drive.
This is a lot like the Internship Rodeo from November, except that it’s later in the game for both employers and employees. So if your firm or one of your portfolio companies is looking to hire summer interns from the current crop of first-year MBA candidates, please drop me a note at daniel.primack@thomsonreuters.com.
All postings will be put into peHUB’s password-protected MBA Forum section, and can include as much or little information as you’d like to provide. Minimums are firm type (VC, LBO, I-Bank, etc.) and job location. If you’d like to keep your firm identity anonymous, just be sure to let me know.
There is no fee for this service. For context, MBA Forum currently has over 2,000 verified members.
Addendum #1: If you are among the desperate MBAs, please do not email me your CV, photograph or any other such information. When the postings are ready, I’ll be sure to let you know (probably early next week).
Addendum #2: The Desperate Interns Drive is only for summer internships. If you want to hire someone for a fulltime position, please use our Careers board. Postings cost just $99 each and can be purchased online with a credit card.
JPMorgan slashing research, ex employees say
JPMorgan is cutting 30 percent of its research department, according to two former employees, but the bank is keeping mum about its plans and declined to give details of the cuts. David DeRose and Leighton Thomas, co-founders of a Bear Stearns alternative research unit that moved to JPMorgan when that bank acquired Bear a year ago, said on Wednesday they sold the unit to an investment firm largely because they could not hire more staff under JPMorgan’s management. “If you stay under a research division that’s being cut 30 percent, we can’t get any headcount,” said DeRose. JPMorgan intends to shed 1,000 to 2,000 jobs from its investment bank this year, co-investment bank chief Steve Black said at the bank’s investor day in February. It was unclear whether the cuts DeRose mentioned are included in these figures and a JPMorgan spokesman declined comment. Research staff may be an easy target for cuts, since it is hard to quantify their contribution to the bank’s bottom line. And banks’ research divisions across Wall Street have been shrinking since the Securities and Exchange Commission in 2002 banned firms from using banking fees to pay analysts.
By Elinor Comlay
In a spin
Financial public relations firms, who elevated the honing of corporate messages to a highly profitable art form, are having to adapt their businesses and in some cases cut staff as the economic gloom intensifies.
With far fewer deals to publicize and lucrative “retainer” contracts under pressure, companies are cutting costs and are increasingly focusing on work thrown up by the crisis, such as capital-raising, restructuring and repairing tarnished images.”
So what exactly are they up to?
Some recent pr industry blogs and other web postings shine a light on some of the spinmeisters’ latest tactics.
Flacking firm Fishburn Hedges openly boasts about how a big capital-raising by a UK mortgage lender was kept off the front pages by presenting it as “a technical, esoteric story suitable for business sections”.
For former News of the World Editor Phil Hall, who advised former RBS boss Fred Goodwin on his parliamentary testimony a few weeks ago, there’s apparently no such thing as bad publicity.
Even amid the current financial wreckage, financial pr remains a fiercely contested field as shown by the fact that there’s even a dedicated M&A league table for PR advisers.
The GM stock owned by prefereds is GMGM.GT..It jumped $2.05 this week with the news of the up coming and better news for GM..What do you think about GMGM.GT???/