Robert B. Willumstad, continuing the fence-mending operation that began when he took over as American International Group chief executive, announced yesterday that the insurance giant's aircraft leasing business would stay with the firm.
A company statement from AIG said yesterday that after a review of the firm's business holdings it was determined International Lease Finance Corp. should remain with the company.
Last month, prior to Mr. Willumstad's takeover as AIG chief executive officer, ILFC CEO Steven Udvar-Hazy was reported to have been exploring a possible split from the parent after ILFC credit ratings were downgraded with AIG's.
The Wall Street Journal in March quoted him as stating, "If things continue to be challenging, it's probably time to sit down and evaluate what the appropriate relationship is."
Mr. Willumstad on June 16–the day after he succeeded Martin Sullivan as AIG CEO–announced that he would conduct a comprehensive review of AIG's businesses. Mr. Sullivan was replaced in the wake of two consecutive quarters where the company posted losses totaling $13 billion.
"Steve Udvar-Hazy and I concluded that a review of ILFC should be a priority so there will not be uncertainty about this important business. After reviewing an analysis of ILFC's business and the value of AIG as a corporate parent, we both concluded that ILFC should be part of the AIG portfolio," Mr. Willumstad said in a statement released late yesterday.
The new AIG CEO last week, in addition to announcing a top-to-bottom business review, revealed he had a friendly chat with Maurice R. Greenberg, AIG's former chairman and CEO who left the company in 2005 and has been fighting the company in court ever since.
Mr. Greenberg, the chairman of C.V. Starr, formerly part of AIG, controls a substantial portion of AIG stock and had been openly critical of his ex-company's performance under Mr. Sullivan.
Mr. Willumstad yesterday also said, "ILFC is the leading company in its business and it is in the best interests of both AIG and ILFC for ILFC to be a part of AIG. AIG will continue to work with ILFC's leadership on ways to enhance ILFC's business to the benefit of both organizations. ILFC is well positioned with a strong management team, sound customer base, geographic diversification and a market-leading portfolio of aircraft."
The statement quoted Mr. Udvar-Hazy as saying, "The discussion and strategic review of our business which we had with Bob Willumstad has resulted in an understanding of the benefits that each of our organizations provides the other. As a result of its relationship with AIG, ILFC can capitalize on attractive business opportunities when others cannot.
"Together, we have identified opportunities to improve the global competitiveness of ILFC, which we believe will generate additional value both to AIG and ILFC."
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