General Motors Corp. may no longer be the world's biggest automaker, but it still operates the country's largest pension fund. The threat to its pension plans has always been an issue, butit took on a new urgency when GM disclosed April 7 that its plans were underfunded by more than $27 billion, with more than half of that being owed to U.S. workers and retirees. Across town, a post- bankrupt Chrysler faces its own pension shortfall. Moreover, a report last week from the Government Accounting Office (GAO) says the pension crisis in the auto industry could create an unprecedented crisis for the federal Pension Benefit Guarantee Corp., a government-sponsored organization to backstop company pensions.
When the two automakers emerged from bankruptcy reorganization the pension problems were seen as a more distant issue, and presumably one that would be eased by economic growth. But the auto industry is facing a slow recovery, and neither the new GM nor the new Chrysler has produced a profit. Christopher Liddell, GM's new chief financial officer, has stopped short of predicting that GM will be profitable this year, while Chrysler CEO Sergio Marchionne is hoping Chrysler can break even this year. Both GM and Chrysler are also moving to build smaller vehicles, which have traditionally produced smaller profits. The pension funding crisis could begin in 2013, or before either company is fully profitable.
Read more: http://www.time.com/time/business/article/0%2c8599%2c1981958%2c00.html?xid=rss-
Sponsor- Ford Motor Credit saved millions of dollars by reducing thier commercial real estate costs. They hired Cambridge Consulting Group to structure a Negotiated Lease Buy Out strategy. Cambridge Consulting was able to present the commercial real esate landlords with a restuctured agreement that released Ford Motor Credit from long term lease obligations. For moer information on how you can reduce your costs please visit- http://www.commercialleaseterminations.com/
Thursday, April 15, 2010
Wednesday, April 14, 2010
Bank Of America Names New CFO
Bank of America Corp named outsider Charles Noski its next chief financial officer, filling a key position that has been vacant for months, the largest U.S. bank by assets said on Wednesday. Noski, 57, who will become CFO on May 11, most recently was chief financial officer of Northrop Grumman Corp, a defense contractor. He left Northrop in 2005.
Noski was also the chief financial officer of the telecommunications giant AT&T from 1999 to 2002. His appointment is the latest in an ongoing reshuffle of the bank's senior management ranks, begun in January by new Chief Executive Brian Moynihan. Noski's departure also leaves a void on Morgan Stanley's board, where he served as chairman of the company's audit committee -- a key board position. Noski is also chairman of Microsoft's audit committee, and will remain in that post.
BofA's former CFO Joseph Price now heads the bank's consumer, small business and credit card units. The bank's interim CFO, Neil Cotty, will re assume his responsibilities as chief accounting officer. Cotty has served in the post since January, when Moynihan announced an executive management team overhaul that moved Price from the CFO role.
Sponsor- Cambridge Consulting Group provides advanced cost cost cutting strategies to financial institutions including bank of America , Ford Motor Credit and Key Corp. For more information please visit www.commercialleaseterminations.com
Noski was also the chief financial officer of the telecommunications giant AT&T from 1999 to 2002. His appointment is the latest in an ongoing reshuffle of the bank's senior management ranks, begun in January by new Chief Executive Brian Moynihan. Noski's departure also leaves a void on Morgan Stanley's board, where he served as chairman of the company's audit committee -- a key board position. Noski is also chairman of Microsoft's audit committee, and will remain in that post.
BofA's former CFO Joseph Price now heads the bank's consumer, small business and credit card units. The bank's interim CFO, Neil Cotty, will re assume his responsibilities as chief accounting officer. Cotty has served in the post since January, when Moynihan announced an executive management team overhaul that moved Price from the CFO role.
Sponsor- Cambridge Consulting Group provides advanced cost cost cutting strategies to financial institutions including bank of America , Ford Motor Credit and Key Corp. For more information please visit www.commercialleaseterminations.com
Tuesday, April 13, 2010
Suntrust Bank Considers Selling RidgeWorth Investments
SunTrust Banks Inc said it was in discussions to sell parts of its RidgeWorth Investments unit, a multi-boutique asset management business. SunTrust did not disclose potential bidders in Monday's statement or which bits it might want to sell, but did say any possible sale would not have a significant effect on its financial results.
Anglo-American asset manager Henderson said on Friday it is in talks to buy parts of RidgeWorth, in an effort by Henderson to increase its exposure to American institutional investors. The asset manager did not specify which parts of RidgeWorth it was considering buying. RidgeWorth, which includes eight boutiques spanning fixed-income, domestic and international equity management, has $63.1 billion in assets, according to SunTrust.
"SunTrust may be motivated to make asset sales because it is the biggest bank left that has not redeemed its TARP preferred issues," Rochdale Securities analyst Richard Bove wrote to clients. SunTrust received $4.9 billion from the U.S. government's Troubled Asset Relief Program. The bank would likely have to sell $1 billion in stock and raise another $3.9 billion through asset sales and borrowings, Bove wrote, adding that the bank has not discussed its plans.
Financial institutions looking to reduce their costs and increase profits should look at unlocking the value they have in the real estate they lease and own for their own operations. Unused real estate space can cost companies millions of dollars with no productivity or bottom line returns. One strategy to consider is hiring a company with the financial and real estate expertise to work with your building owners to release you from lease obligations. For more information please visit the website- www.commercialleaseterminations.com
Anglo-American asset manager Henderson said on Friday it is in talks to buy parts of RidgeWorth, in an effort by Henderson to increase its exposure to American institutional investors. The asset manager did not specify which parts of RidgeWorth it was considering buying. RidgeWorth, which includes eight boutiques spanning fixed-income, domestic and international equity management, has $63.1 billion in assets, according to SunTrust.
"SunTrust may be motivated to make asset sales because it is the biggest bank left that has not redeemed its TARP preferred issues," Rochdale Securities analyst Richard Bove wrote to clients. SunTrust received $4.9 billion from the U.S. government's Troubled Asset Relief Program. The bank would likely have to sell $1 billion in stock and raise another $3.9 billion through asset sales and borrowings, Bove wrote, adding that the bank has not discussed its plans.
Financial institutions looking to reduce their costs and increase profits should look at unlocking the value they have in the real estate they lease and own for their own operations. Unused real estate space can cost companies millions of dollars with no productivity or bottom line returns. One strategy to consider is hiring a company with the financial and real estate expertise to work with your building owners to release you from lease obligations. For more information please visit the website- www.commercialleaseterminations.com
H&R Block Start Search for New CFO
Tax preparer H&R Block Inc. said Monday it has begun a search for a replacement for Chief Financial Officer Becky Shulman, who is scheduled to step down on April 30.The company has hired Crist/Kolder Associates to lead the search.
Spokeswoman Jennifer Love said that while Shulman helped the company sell off noncore businesses and shore up its balance sheet, H&R Block was looking to expand the CFO role to include operational leadership.
Corporate controller Jeff Brown will become interim CFO until a replacement can be found.
Shulman joined the company in 2001 and is credited with improving the company's financial health, the company said.
Spokeswoman Jennifer Love said that while Shulman helped the company sell off noncore businesses and shore up its balance sheet, H&R Block was looking to expand the CFO role to include operational leadership.
Corporate controller Jeff Brown will become interim CFO until a replacement can be found.
Shulman joined the company in 2001 and is credited with improving the company's financial health, the company said.
McKinsey Study Discusses Effectiveness of Cost Cutting
During the recent financial crisis many companies turned to aggressive cost containment or cost cutting strategies to improve their bottom line. The fourth quarter profits for many companies had more to do with cost cutting than increasing revenues.For most companies cost cutting was to be a key strategy again in 2010. Many executives were also concerned about the sustainability of the cost reduction programs they had implemented. Would there organization slip back into the spending patterns of old?
The Chicago office of McKinsey Global Survey recently released a very interesting research study, " What worked in cost cutting and what's next," that examined this issue. They found that cost containment remains a very high priority for most companies but respondents to the survey said they are worried about maintaining the cost reductions this year and concerned about cost challenges yet to come. Respondents were also asked about the most significant cost structure risks that their companies would face in 2010 and whether the company is prepared to manage the risks.
Of the 300 companies interviewed for the study, many viewed cost cutting as a key strategic move to improve organizational structure, delivery of better service and operational efficiency. These efforts would lead to long term growth for the companies rather than a short term reaction to lower demand and decreased revenue.
Nearly 75% of executives said that cost cutting remains a top priority and more than 50% have cut costs by at least 10 % since September 2008. Although the majority of these cuts were labor related, executives looked at all areas for cost reductions. For example 48% made cuts in non-labor areas and 20% cut capital assets including facilities and transport assets.
Most of the companies that focused on Capital Assets were trying to reduce variable costs in line with lower demand/volume, institute a company wide program to increase performance, cutting cost as part of normal budgeting, freeing up cash/reduce need for short term external financing or organizational restructuring of some kind.
The larger organization were more likely to adopt across the board cost cutting approaches, while smaller and medium sized businesses used a more targeted approach. Among survey respondents who used this targeted approach to cost cutting- 75% say their company reduced operational expenses. Of these 31% made cost cuts in individual branches, facilities or plants and 75 cut costs across multiple branches, facilities, or plants( cut the same across all locations.)
The majority of the survey respondents felt their cost cutting moves were effective and two thirds said they met the cost reduction targets that were set.
One area of concern for companies is continuing to keep their cost structure at the new lower level. Some companies feel that the cost cutting will not be sustainable over the next 12 to 18 months. The survey results seem to indicate that companies that made structural changes and focused on reducing operational costs were more likely to feel that the cost cutting change will be long lasting. The biggest risk executives reported to maintaining the costs cutting is the continued sluggishness or decline in demand or volume.
Looking forward ,executives plan to address fixed costs( 23% of respondents) as a source of future cost savings. This will require organizational changes that could impact how the companies products are designed, produced and/or delivered.
For more information and complete survey results from the McKinsey Global Survey please visit their website www.mckinsey.com. The survey was developed by Kevin Dolan and Michael Murray in the Chicago office of McKinsey & Company.
Other than labor one of the largest costs an organization faces is the cost of leasing or owning their office and facilities. In this time of declining demand and sales many companies are rethinking their portfolios of products and service offerings and looking at improving operational efficiency. These strategic moves are driven by cost cutting and profit enhancement. At the end of this process a company may find itself with unused office, industrial or distribution real estate.
Unused and un-occupied real estate can quickly become a large drain on cash flow and the bottom line. It is not uncommon for companies to pay millions of dollars for commercial real estate space they do not need or are not using. One solution was to sublease this space. Subleasing creates another set of concerns for the companies and does not help improve the bottom line.
An advanced strategy some large companies are utilizing is a Negotiated Lease Buy-Out. Financial institutions such as Bank Of America, Key Corp and Ford Credit have used this approach very successfully. A Lease Buy-out creates an opportunity for the company to be released from any long term real estate lease commitments. The leading practitioner of this advanced finance tool is Cambridge Consulting.
For more information please visit their website at www.commercialleaseterminations.com
The Chicago office of McKinsey Global Survey recently released a very interesting research study, " What worked in cost cutting and what's next," that examined this issue. They found that cost containment remains a very high priority for most companies but respondents to the survey said they are worried about maintaining the cost reductions this year and concerned about cost challenges yet to come. Respondents were also asked about the most significant cost structure risks that their companies would face in 2010 and whether the company is prepared to manage the risks.
Of the 300 companies interviewed for the study, many viewed cost cutting as a key strategic move to improve organizational structure, delivery of better service and operational efficiency. These efforts would lead to long term growth for the companies rather than a short term reaction to lower demand and decreased revenue.
Nearly 75% of executives said that cost cutting remains a top priority and more than 50% have cut costs by at least 10 % since September 2008. Although the majority of these cuts were labor related, executives looked at all areas for cost reductions. For example 48% made cuts in non-labor areas and 20% cut capital assets including facilities and transport assets.
Most of the companies that focused on Capital Assets were trying to reduce variable costs in line with lower demand/volume, institute a company wide program to increase performance, cutting cost as part of normal budgeting, freeing up cash/reduce need for short term external financing or organizational restructuring of some kind.
The larger organization were more likely to adopt across the board cost cutting approaches, while smaller and medium sized businesses used a more targeted approach. Among survey respondents who used this targeted approach to cost cutting- 75% say their company reduced operational expenses. Of these 31% made cost cuts in individual branches, facilities or plants and 75 cut costs across multiple branches, facilities, or plants( cut the same across all locations.)
The majority of the survey respondents felt their cost cutting moves were effective and two thirds said they met the cost reduction targets that were set.
One area of concern for companies is continuing to keep their cost structure at the new lower level. Some companies feel that the cost cutting will not be sustainable over the next 12 to 18 months. The survey results seem to indicate that companies that made structural changes and focused on reducing operational costs were more likely to feel that the cost cutting change will be long lasting. The biggest risk executives reported to maintaining the costs cutting is the continued sluggishness or decline in demand or volume.
Looking forward ,executives plan to address fixed costs( 23% of respondents) as a source of future cost savings. This will require organizational changes that could impact how the companies products are designed, produced and/or delivered.
For more information and complete survey results from the McKinsey Global Survey please visit their website www.mckinsey.com. The survey was developed by Kevin Dolan and Michael Murray in the Chicago office of McKinsey & Company.
Other than labor one of the largest costs an organization faces is the cost of leasing or owning their office and facilities. In this time of declining demand and sales many companies are rethinking their portfolios of products and service offerings and looking at improving operational efficiency. These strategic moves are driven by cost cutting and profit enhancement. At the end of this process a company may find itself with unused office, industrial or distribution real estate.
Unused and un-occupied real estate can quickly become a large drain on cash flow and the bottom line. It is not uncommon for companies to pay millions of dollars for commercial real estate space they do not need or are not using. One solution was to sublease this space. Subleasing creates another set of concerns for the companies and does not help improve the bottom line.
An advanced strategy some large companies are utilizing is a Negotiated Lease Buy-Out. Financial institutions such as Bank Of America, Key Corp and Ford Credit have used this approach very successfully. A Lease Buy-out creates an opportunity for the company to be released from any long term real estate lease commitments. The leading practitioner of this advanced finance tool is Cambridge Consulting.
For more information please visit their website at www.commercialleaseterminations.com
Monday, April 12, 2010
IRS targeting Small and Medium Sized Business?
By David Kocieniewski of The New York Times.
Despite the federal government’s repeated pledges to crack down on big businesses that underpay their taxes, the Internal Revenue Service has decreased in recent years the time it spends auditing the returns of the nation’s largest corporations, according to a new study.And in 2009, the government audited just one in four of the largest corporations, lower than any rate in more than 20 years, according to the analysis, released Sunday by the Transactional Records Access Clearinghouse a nonpartisan research group affiliated with Syracuse University
Researchers said the audit data and other memos, which had both been obtained from the government under the Freedom of Information Act, suggested that a “perverse quota system” within the I.R.S. may be pressuring auditors to focus on small and medium-size businesses and give less scrutiny to the largest corporations — those with $250 million or more in assets.
“The decision to audit the smaller companies does not help the government collect more taxes,” the study concluded. “This is because the data indicate that the larger the business, the larger the dollar amounts of tax underreporting and back taxes on average that they may owe.”
I.R.S. officials, who have for years disputed the methodology used by TRAC, were quick to rebut the study’s findings. Steven T. Miller, the I.R.S. director of enforcement, said the study was skewed because it failed to take into account a surge in hours that I.R.S. agents spent working with businesses before they filed their returns to prevent errors or underpayments.
For the complete article please visit http://www.nytimes.com/2010/04/12/business/12audit.html?ref=business&pagewanted=print
Despite the federal government’s repeated pledges to crack down on big businesses that underpay their taxes, the Internal Revenue Service has decreased in recent years the time it spends auditing the returns of the nation’s largest corporations, according to a new study.And in 2009, the government audited just one in four of the largest corporations, lower than any rate in more than 20 years, according to the analysis, released Sunday by the Transactional Records Access Clearinghouse a nonpartisan research group affiliated with Syracuse University
Researchers said the audit data and other memos, which had both been obtained from the government under the Freedom of Information Act, suggested that a “perverse quota system” within the I.R.S. may be pressuring auditors to focus on small and medium-size businesses and give less scrutiny to the largest corporations — those with $250 million or more in assets.
“The decision to audit the smaller companies does not help the government collect more taxes,” the study concluded. “This is because the data indicate that the larger the business, the larger the dollar amounts of tax underreporting and back taxes on average that they may owe.”
I.R.S. officials, who have for years disputed the methodology used by TRAC, were quick to rebut the study’s findings. Steven T. Miller, the I.R.S. director of enforcement, said the study was skewed because it failed to take into account a surge in hours that I.R.S. agents spent working with businesses before they filed their returns to prevent errors or underpayments.
For the complete article please visit http://www.nytimes.com/2010/04/12/business/12audit.html?ref=business&pagewanted=print
Thursday, April 8, 2010
More M&A Activity For Financial Institutions?
Regulatory reform could ultimately fuel merger and acquisition activity in the financial services sector. But, so far, the lack of clarity on the direction it will take has mostly just hindered deal making.
Still, observers expect there will be many opportunities for deals in 2010 due to continued depressed valuations, divestitures in the insurance sector and additional bank failures. There were 702 problem banks on the Federal Deposit Insurance Corp.'s watch list as of Dec. 31, for instance.
One major X-factor is the so-called Volcker rule, currently under consideration in the Senate. The controversial proposal would prompt divestitures from banks, since it requires them to exit the private equity and hedge fund businesses, as well as proprietary trading.
But the passage of such legislation is still being debated, which means it may not even be worth the time and effort to put a pitch book together on a potential deal.
"After one of its slowest years in recent memory, the financial services M&A market remains uncertain over the timing of the economy recovery and impact of proposed regulatory, healthcare and tax reform," according to a new report from PricewaterhouseCoopers.
for the complete article please visit-http://www.cfozone.com/index.php/Newsflash/Regulatory-reform-stalling-financial-services-M&A.html?&newsletter=04082010_cfo
Still, observers expect there will be many opportunities for deals in 2010 due to continued depressed valuations, divestitures in the insurance sector and additional bank failures. There were 702 problem banks on the Federal Deposit Insurance Corp.'s watch list as of Dec. 31, for instance.
One major X-factor is the so-called Volcker rule, currently under consideration in the Senate. The controversial proposal would prompt divestitures from banks, since it requires them to exit the private equity and hedge fund businesses, as well as proprietary trading.
But the passage of such legislation is still being debated, which means it may not even be worth the time and effort to put a pitch book together on a potential deal.
"After one of its slowest years in recent memory, the financial services M&A market remains uncertain over the timing of the economy recovery and impact of proposed regulatory, healthcare and tax reform," according to a new report from PricewaterhouseCoopers.
for the complete article please visit-http://www.cfozone.com/index.php/Newsflash/Regulatory-reform-stalling-financial-services-M&A.html?&newsletter=04082010_cfo
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