Business NEWS

BofA CEO Kenneth D. Lewis advice to America: One too many auto makers

By Amarendra Bhushan for CEOWORLD Magazine Updated:November 19, 2008

“I think there’s one too many” automakers, Bank of America CEO Kenneth Lewis told the Detroit Economic Club during a meeting in Cobo Center, the downtown convention center that’s home to the North American International Auto Show each January. He added he would require consolidation if he was deciding on a bailout.

“I think the American people are suspect of just giving more money and buying more time,” he told reporters after the speech. “They want to see that the companies have in fact changed and the strategies have changed.”

Treasury Secretary Henry Paulson told Congress earlier in the day the administration remains firmly opposed to dipping into the government’s $700 billion financial rescue package on behalf of General Motors Corp., Ford Motor Co. and Chrysler LLC. He said “there are other ways” to help them.

Auto executives, appealing to the Senate Banking Committee on Tuesday, insist they need $25 billion in emergency bridge loans to avert a collapse of one or more of their companies.

Charlotte, N.C.-based Bank of America has received its $25 billion in government funds as part of the bailout effort envisioned to rescue the financial system. Nine large banks, including Bank of America Corp., Wells Fargo & Co., Citigroup Inc. and JPMorgan Chase & Co., received $125 billion last month.

Lewis said Bank of America’s was “invited” by the Treasury Department to take its share — $15 billion for the bank and $10 billion for Merrill Lynch, which Bank of America has acquired — to stimulate the market by providing more loans. The bank is committed to that goal, he said.

Despite the losses those in the automotive industry would suffer in the short term, Lewis said consolidation should be seen as positive in the long term.

“If those things save it, then they should be real happy,” he said. “You can either be happy for a short period of time or moderately happy for a long time. I’m just trying to make sure the industry survives, with so-called ‘tough love.’”

Kenneth D. Lewis
Chairman, Chief Executive Officer and President, Bank of America Corporation

Kenneth D. Lewis is chairman, chief executive officer and president of Bank of America.

As CEO of Bank of America, Lewis leads one of the world’s largest financial institutions and the twelfth most profitable company in the world in 2007. Bank of America serves more than 59 million consumers and business clients through more than 6,100 retail banking offices, 19,000 ATMs and an award-winning online banking and bill-pay service with more than 24 million active users. The company serves clients in 175 countries and has relationships with 99 percent of the U.S. Fortune 500 companies and 83 percent of the Global Fortune 500.

During his tenure, Bank of America has improved customer satisfaction significantly across every major line of business; annual revenue has increased from $33 billion to $66 billion; annual profit has increased from $7.5 billion to $15 billion; assets have increased from $642 billion to $1.7 trillion; market capitalization has grown from $74 billion to $183 billion; and total annual shareholder returns (including stock price growth plus dividends) have averaged 13.3%, doubling peers, the KBW Banks Index, the S&P 500 and the Dow Jones Industrial Average over the same period.

Lewis has been chief executive officer since 2001. He joined North Carolina National Bank (NCNB, predecessor to NationsBank and Bank of America) in 1969 as a credit analyst in Charlotte and served as corporate banking officer and Western Area director in the U.S. Department before being named manager of NCNB’s International Banking Corporation in New York in 1977.

He was named Middle Market Group executive in 1983 when the group was created and was responsible for expanding and improving service to middle market companies throughout the Southeast. He led the bank’s operations in Florida and Texas in the 1980s, served as president of Consumer and Commercial Banking and chief operating officer in the 1990s, and was named chairman, chief executive officer and president of Bank of America in April of 2001.

Like this article! ‹ Carrefour fires José Luis Durán and hires Nestlé Lars Olofsson as New Group CEO What is Google CEO Eric Schmidt’s Innovation Bailout plan? ›
Share this Post: Get It Delivered To Your Inbox