So where does Ally Financial go next?
News of Chief Executive Michael Carpenter's exit has turbocharged what was already a period of great change at the Detroit auto lender. In recent months the federal government sold the last of its stake in Ally, and an important business partner, General Motors, announced plans to sever key ties.
Then Ally announced late Monday that Carpenter, 67, would cede the chief executive role to Jeffrey Brown, 41. Brown was CEO of the company's dealer financial services business. Carpenter also left the board and will remain as a consultant.
Ally diversified under Carpenter and could diversify further.
It has been shifting from a captive- to an indirect-auto-lending model by adding sales teams and dealer-incentive programs to target non-GM dealers and entering the market for used-car finance.
And the Treasury Department's sale in December of the last of its holdings in the company from the Troubled Asset Relief Program could give Ally more flexibility. Ally bought $750 million of jumbo mortgages as an investment last quarter, and it could take a look at other asset classes, Carpenter said on the company's fourth-quarter earnings call last week. The Tarp exit could also give more leeway to shift its funding mix to lower-cost borrowings.
Brown will have to accelerate the transition. In January GM announced that it would cut off one of Ally's most important sources for lease originations; it decided to use only in-house financing for subsidized auto loans. Ally made $5.2 billion of such loans last year, or about 13% of its total originations.
On the earnings call, Carpenter reaffirmed Ally's $30 billion target for originations in the coming year, despite the loss of GM's business.
Analysts had considered Brown a possible successor to Carpenter, but the suddenness of the executive shuffle surprised observers and fueled speculation that it was not, as Ally insisted, a long-planned succession. Brown joined Ally in 2009 and has held his current position, with responsibility for auto finance, insurance and auto servicing, only since last March.
Ally did not make either Carpenter nor Brown available for comment Tuesday, but a company spokeswoman said that the departure was voluntary and had been planned for months.
Carpenter said in a news release that "it is the right time for me to step aside" and that he had recommended Brown as his successor.
His retirement came a month after the GM announcement and four days after the earnings call, during which Carpenter fielded many questions about GM's decision.
Carpenter sounded irked by GM's move, though he insisted that Ally could make up the lost revenue by focusing on the used-car business and its relationships with other dealers and manufacturers.
Carpenter said Ally was not surprised by GM's decision, but "piss[ed] off" that "we don't get the chance to compete" for the GM business.
Nonetheless, he argued that the change justified his decision to make the $152 billion-asset Ally less dependent on any one origination channel.
"When I came on board, 80% of the business was GM subvented business. And we basically said, we've got to get market driven, and we've got to get to a point where we're not dependent on this contract because otherwise we are always vulnerable to the decisions that they may make," he said on the call.
Analysts generally agree that Carpenter's departure, despite its suddenness, was reasonable given his accomplishments. Besides overseeing the Tarp exit, he led the company through an initial public offering in April. Sanjay Sakhrani of Keefe, Bruyette & Woods wrote in a Tuesday research note that the transition "makes sense as the focus turns to capital management and growth."
Opinions differ on whether Carpenter's departure was related to GM's decision to bring its subsidized leasing in-house.
Christopher Donat of Sandler O'Neill said he did not think the two events were linked, noting that Brown had been the expected successor. But he did call the sudden departure "curious," particularly since it comes so closely after the announcement of quarterly results.
Recent stock performance may also have been a factor. Ally's stock is down 19% since its IPO, and it tumbled after the GM announcement. But the stock price rose 2.8%, to $19.62, on Tuesday.
The stock performance cannot be blamed on Carpenter, Donat said. Ally's "challenged competitive position" is "nothing new," he said. "He is unquestionably leaving them in a better position than when he found them."