General Motors is luring Delta CFO into CFO position.
General Motors Co. hired longtime CFO Delta Air Lines Inc. Paul Jacobson as the new CFO, gaining a high-level executive outside of the auto business as the automaker grapples with the pandemic and technological upheaval.
Mr Jacobson, Delta’s CFO since 2012, will leave Delta as the Atlanta-based airline struggles to recover from losses caused by the coronavirus. As the auto industry has recovered from the Covid-19 crisis, Delta and other airlines continue to face slumping demand for air travel and spend millions of dollars a day.
Mr. Jacobson will take over as GM CFO on December 1, the automaker said Friday. John Stapleton, who took over as GM’s interim CFO following the departure of Dhivya Suryadevara in August, will remain in that position until then, the company said.
“GM’s vision is impressive,” Mr. Jacobson said in a statement from GM. “They are making a historic technological transition to electrification from a position of strength.”
Delta has appointed two executives as interim co-financing executives while it looks for a permanent successor. Gary Chase, senior vice president of business development and financial planning, and Bill Carroll, senior vice president of finance and control, will share responsibilities. Delta said it will conduct a global search for its next CFO.
Mr. Jacobson, 48, canceled a planned retirement from Delta in April to help the company cope with the aftermath of the pandemic, which has forced airlines to slash costs, cut thousands of jobs and decommission various aircraft.
“Paul has chosen to stay with Delta not only during his recovery, but for many years to come as we continue to climb,” Delta CEO Ed Bastian wrote in a memo to employees on April 21.
Mr. Jacobson was instrumental in managing the airline during the pandemic. He raised billions of dollars in new funding through bond sales and used the company’s frequent flyer program to raise additional capital. The airline ended its last quarter with nearly $ 22 billion in liquidity and cost cuts, and suspended new aircraft orders.
Under Mr. Jacobson, Delta spent years paying off its debt before the outbreak of the pandemic, which meant the company had a stronger balance sheet than some of its competitors.
As Senior Vice President and Treasurer, Mr. Jacobson held this position from 2005 to 2012, helping to reshape the airline’s finances after it emerged from bankruptcy in 2007. He joined the company in 1997. “My heart is with the people of Delta,” Jacobson said in April after his decision to stay with the airline.
Ms Suryadevara left GM in August, leaving unexpectedly after two years as GM’s CFO to join financial technology startup Stripe Inc. She has spent nearly her entire career at GM and is highly respected by Wall Street analysts.
Last spring, Ms Suryadevara led GM’s efforts to raise more than $ 20 billion in debt to cushion the company’s losses from the pandemic. She also helped open GM’s autonomous car business, Cruise, for an outside investment that resulted in more than $ 7 billion in new capital.
Mr. Jacobson will join GM during a time of major challenges as well as a long-term change in the automaker’s business model.
The automaker got out of the early days of the Covid-19 crisis when it spent about $ 9 billion in cash in the second quarter as its North American factories stood idle. Since then, car demand has declined faster than anticipated, with car production and sales roughly in line with pre-pandemic levels.
GM shares have more than doubled since March. They closed down about 1% on Friday. GM reports third-quarter earnings Thursday.
Like other car manufacturers, GM faces the challenge of investing in potential growth areas such as electric and driverless cars, which today have uncertain returns, as well as growing its traditional gasoline and diesel car business.
GM CEO Mary Barra is making big bets on battery-powered cars and Cruise. The company will spend $ 20 billion on developing these businesses by mid-decade, executives said.
“Paul is a great addition to senior management at GM,” said Ms. Barra.