GM orders a major shake-up at troubled financing subsidiary

June 12, 1992|By Los Angeles Times

DETROIT -- Citing mismanagement and poor judgment, General Motors Corp. ordered a major housecleaning at its finance subsidiary yesterday in the wake of an embarrassing $422 million fraud case involving one of its car dealers.

GM replaced the president, the chief financial officer and the operations boss of General Motors Acceptance Corp. It also reassigned several other officials and said it was taking disciplinary action against "numerous" employees at GMAC's Smithtown, N.Y., office.

It was GM's first substantive comment in the case of former dealer John McNamara of Port Jefferson, N.Y., who is accused in a federal indictment of bilking GMAC out of $422 million in an elaborate phony export scheme. McNamara has pleaded not guilty to the charges.

Shortly before the fraud was made public, GM announced the May 1 retirement of John R. Edman, GMAC's chairman and chief executive, and his replacement by Robert T. O'Connell.

Yesterday President William J. Lovejoy, 52, was placed on "special assignment" and replaced by John R. Rines, 44. Chief Financial Officer George G. Fenner, 58, retired and was replaced by John D. Finnegan, 43.

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