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backLATINtalk May, 2011

Denise Farinos, CFO of GM South America, on Shifting Gears in Emerging Markets

That Denise Farinos, CFO of General Motors South America, has a big job is an understatement. She manages the finances of what some executives have described as the U.S. automaker’s most valuable asset in terms of growth and return on investment. The jewel in the crown is Brazil, which with nearly 700,000 General Motors vehicles sold last year, trails only the company’s U.S. and China operations in unit sales worldwide.

A 45-year-old Sao Paulo native and a 22-year GM veteran, Farinos said in a recent interview with Universia Knowledge@Wharton from GM headquarters in Sao Paulo that she’s lucky to be crunching the numbers during this time of growth. Auto sales are booming across the region thanks to expanding economies, rising incomes, easier credit and appreciating local currencies that make imported vehicles cheaper. With its leading 20% market share in South America, GM is riding the wave. Overall car sales in Brazil, in particular, grew 11% last year and should rise by at least 5% in 2011.

But even though these are undoubtedly good times for automakers in South America, it’s not all a smooth ride for Farinos. Since the economic downturn, GM had been more known worldwide for the bailout it received from the U.S. government than for the cars it sold. With the government paid back, restructuring and an IPO raising US$20 billion last year, the fears for the company's survival have passed. But other challenges are ongoing for GM's finance executives. For Farinos, that includes managing constant currency fluctuations that have a direct bearing on GM’s domestic market and its ability to increase the number of vehicles it exports. She must also keep an eye on measures being pursued by governments concerned about a “credit bubble” and rising inflation. On April 7, for example, Brazil's government under Dilma Rousseff slapped a 3% surtax on new loans to try to slow credit growth, a move that could dampen car sales.

An edited version of the transcript appears below.

Universia Knowledge@Wharton: You've arrived at the top echelon of GM management. Tell us about your career trajectory.

Denise Farinos: After joining GM, I worked in Brazil in several areas of the company, such as marketing, manufacturing and engineering, always in the finance function. To complement my professional experience, I was lucky to participate in several projects with strategic importance that really built my experience and gave me a solid understanding of GM’s business.

I got an MBA at Thunderbird School of Global Management in Arizona. My first international assignment was as CFO of GM’s Colmotores operation in Colombia. That was a great experience, because I was deeply involved in the day-to-day operations. I was there in June 2009 when GM declared Chapter 11 bankruptcy, which impacted us all, but was a good experience for me. I’d attribute any success I've had to commitment, dedication and an eagerness to learn.

Universia Knowledge @ Wharton: What role does finance play in helping an automaker improve its product portfolio?

Farinos: We can help much more than one might think. Finance is involved in the development of a product from the beginning. We contribute by presenting ideas and options to make a project viable and sustainable. Also important is our contribution in making sure that unrealistic information is not included in the business case. We can help the team develop a great car with viable price, cost, volume and investment estimates.

Universia Knowledge@Wharton: GM’s Brazil operation, which has been rolled into GM South America, has an illustrious history as part of the career paths of several top managers, including former CEOs Fritz Henderson and Rick Wagoner. Why is that?

Farinos: GM Brazil has the capability to design a new car from scratch, then build it and sell it in a competitive environment. The process of developing a new product from concept to sales brings valuable opportunities and experience to any professional. You learn how to work within a complex product development chain, and externally you find out how to compete in a mature market.

Universia Knowledge @ Wharton: What are major differences between the U.S. and Brazilian markets in terms of consumer preferences?

To read entire interview, please click here.

Source: Knowledge @ Wharton - GAI

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