One might think that the person most responsible for cleaning up the financial mess at GMAC would be the Chief Financial Officer (following Colin Powell's "Pottery Barn logic"); but (somewhat in the tradition of the old Ford television commercials) the financing unit of General Motors seems to have a "better idea," at least according a recently breaking story on Reuters:
GMAC LLC, stung by billions of dollars in losses at its auto finance and mortgage units, on Friday scrapped its own name from its banking unit, which it will now call Ally Bank in an effort to gain customers.
Sanjay Gupta, the bank's chief marketing officer, said the company wanted a name that would help it shed the baggage that many Americans now associate with banks, which have taken hundreds of billions of dollars of taxpayer money after losses from bad loans and investments piled up.
"We fully expect more customers will use us," Gupta said in an interview.
GMAC's conversion to a bank holding company in December was a central part of the Detroit-based company's survival plan, and allowed it to get access to new government funding.
While GMAC got a $6 billion bailout in December, including $5 billion from the Troubled Asset Relief Program, regulators ordered it last week to plug an $11.5 billion capital shortfall to protect itself in case of a severe recession.
Nineteen large banks underwent government "stress tests," and of the 10 told to raise capital, GMAC had by far the biggest shortfall relative to its size.
In other words, when all else fails, you can always count on marketing to come up with new lipstick to put on the pig. Nevertheless, I would say there is far more than a bit of chutzpah in the attempt to associate the repackaged unit with the noun "ally." To the extent that "ally" is synonymous with "friend," those of us who remember the Ford commercials probably also remember when we used to have a friend at the Chase Manhattan Bank. Is this some kind of coded message to JPMorgan Chase, which has come to the rescue of both Washington Mutual and Republic Windows and Doors? Is it just a way to make new friends and influence new people?
I thought it might be interesting to check out Gupta's background on the Web site for what is still called GMAC Financial Services:
Sanjay Gupta was named chief marketing officer of GMAC Financial Services in March 2008. He is responsible for global marketing and brand strategy, bank deposits and customer operations, product innovation and e-commerce for the company.
Gupta had been senior vice president of global consumer and small business marketing at Bank of America, responsible for mass media, direct and online marketing. He also served as e-commerce and ATM executive at Bank of America, which he joined in March 2001.
Prior to that position, beginning August 1999, Gupta was chief marketing officer of SciQuest.com and successfully helped the company go public. Previously, Gupta held a variety of positions at Federal Express, becoming managing director of interactive marketing and e-commerce. He began his career at Federal Express in August 1992.
Gupta holds a bachelor’s degree in electronic engineering from the University of Bombay and a master’s degree in business administration from the University of Texas at Austin.
In other words he is part of that prevailing wisdom that an undergraduate mastery of engineering is best coupled with an MBA; but one wonders if he ever had to deal with crisis management, at least in the classroom, if not in the field. None of this inspires very much confidence at a time when confidence remains the key element of the game. So, for both his conviction that name-changing is the best strategy and his choice of a name that is so clearly lacking in any confidence-building currency, Gupta can be the proud recipient of this week's Chutzpah of the Week award!