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Guaranty CEO Nutt ousted in shake-up

Tuesday, June 2, 2009
(Updated 2:36 pm)
By Richard M. Barron
Staff Writer

GREENSBORO — Billy Nutt is out as the chief executive officer at United Guaranty Corp., ending more than 30 years with the local mortgage insurer.

But parent company American International Group is tight-lipped about what’s next for the Greensboro-based headquarters and its 500 local employees — 950 worldwide.

AIG said Monday it has replaced Nutt with Eric Martinez Jr., who has worked with AIG since January in a variety of roles. Most recently, he “led a comprehensive strategic review for UGC,” according to a company news release.

AIG declines to say whether it will close or sell United Guaranty, which lost $2.5 billion in 2008. United Guaranty, which insures companies that lend money for mortgages, was swamped with claims as the real estate market collapsed.

“All options are on the table,” said David Monfried, an AIG spokesman.

Community leaders, understandably worried about losing more jobs, are also worried about losing Nutt’s leadership.

The Greensboro native is regarded by many as one of the top business leaders in the city.

As the city’s historic textile, apparel and other major companies left or folded a decade ago, it weakened what had been a thriving executive community.

These were people capable of raising big money for charities or working for — sometimes demanding — government initiatives.

If Nutt chooses to take a lower profile after United Guaranty, he will leave a void.

“You probably couldn’t find anyone who’s been a stronger advocate and a contributor to the well-being of Greensboro and Guilford County over the past 20 years,” said Pat

Danahy, president and chief executive officer of the Greensboro Partnership, which oversees major community and economic development organizations.

Nutt currently serves on the Joseph M. Bryan Foundation board, the Moses Cone Health System board of trustees, the Wyndham Championship Charitable Foundation board, as a co-chairman of Business for Excellence in Education, the Greensboro Partnership board and the St. Mary’s School board of trustees in Raleigh.

But Nutt didn’t look at these jobs as window-dressing on his resume, said Jim Melvin, the Bryan Foundation’s president.

“He’s just a very caring person,” Melvin said. “It’s a real loss to me and to United Guaranty.

 He’s such a caring, straight arrow.”

Melvin said Nutt’s management style is action-oriented, but he listens before he makes decisions. As head of the United Way fundraising campaign, Nutt helped the charity overcome a fundraising deficit and reach its goals a couple of years ago.

Martinez comes to United Guaranty as part of the crisis team trying to sell assets and save AIG, which has received more than $182 billion in federal aid since last September.

Martinez is at least the second former executive for Safeco Insurance Co. of Seattle to get a prominent role at AIG.

Martinez is “an outstanding executive who achieved terrific results during his time at Safeco,” Monfried said. “Here he completed the sale of several properties for the Global Real Estate group.”

It’s too early to say, however, how Martinez will become involved in Greensboro, Monfried said.

“He’s a warm, engaging, charismatic leader and people genuinely enjoy working with him,” Monfried said. “He will engage with the community shortly. He will begin that process of getting to know the community and its leaders shortly.”

Monfried declined to release any details of a severance package for Nutt, and Nutt was unavailable for an interview.

He released a brief statement late Monday saying the company had elected to replace him.

“I have been truly honored and privileged to work with our wonderful employees and to serve our valued customers for more than 30 years,” he said.

Perhaps more telling is the comment he made to the Greensboro Rotary Club two weeks ago, while discussing the real estate collapse.

“We at United Guaranty are living the nightmare that has been left behind by all the collateral damage.”
 

Contact Richard M. Barron at 373-7371 or richard.barron@news-record.com
 

Accompanying Photos

Joseph Rodriguez (News & Record)

Photo Caption: AIG’s United Guaranty Corp. in Greensboro.

Comments

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MtgInsChick

June 1, 2009 - 2:54 pm EDT

Anyone have any dish?

Former UG'er here who saw the writing on the wall and got out while it was still possible to get another job. Shivers went through me when senior management said underwriters would be expected to complete nine files a day. That was the sign that it was time to get out before everything erupted.

The senior management people who implemented that plan - were they shown the door with Billy? Are they scampering the seventh floor trying to show they're still in the thick of things? Are the good hardworking people on the other floors breathing okay, or is there worry?

ClimbingUphill

June 1, 2009 - 3:46 pm EDT

MtgInsChick, I am not a UG employee but a close relative is. I can say with decent certainty that there is worry everywhere. My relative has been with the company (non-managerial, (s)he is definitely one of the good, hardworking people) for over 25 years. I am worried sick.

MtgInsChick

June 1, 2009 - 4:55 pm EDT

Thanks for the update. It's a shame that the rank and file are paying the price for really bad management. How and why did it take AIG so long to see and correct the problems that everyone has known about for years and years? Many underwriters walked out of offices, and at least one RUM was mysteriously let go after questioning a certain "Ms. High and Mighty" at a meeting. The RUM correctly stated the lack of underwriting standards was eventually going to wreck the company.

So the rank and file points out that management is running the company into the ground, yet even after the company has been destroyed, that same management is still sitting on the seventh floor, still pocketing money despite the company bleeding money. It makes no sense.

How out of touch was the parent company not to realize the managerial incompetance that was so obvious to those that worked there?

ou812

June 1, 2009 - 7:07 pm EDT

UG has done so much for this community. Billy Nutt has done so many positive things for the city of Greensboro. I wish him as well as the employees of UG nothing but the best.

AIGsucks

June 1, 2009 - 10:57 pm EDT

Couldn't have happened to a nicer guy! Yes, he did some positive things for the community but the negatives far outweigh the positives. Like destroying a very profitable company. Like screaming at Admins.....Like working people an unusually number of hours even on Holidays!..Like hiring people from across the country...moving their families here....then their job is gone within a year and in some cases now their house is in foreclosure! Yes the economy had some effect on this but then again most of this is because of his egotistical greedy self! MGIC and Genworth are still in business and weathering the storm. It didn't have to be this way.

The sense of urgency instilled by the former CEO created the culture that caused this economic disaster. Spend, spend, spend....and grow, grow, grow. How much can I make? Lets all buy BMW's and gigantic houses and borrow, borrow, borrow. After all when the chickens come home...."the bigwigs" will all be off at a sunny resort or drinking half price wine at Cafe Europa. You get what you deserve and why not call a goodbye meeting to tell your employees instead of leaving in the night? Maybe apologizing for your miscalculations? I know...I know...it is hard to hold your head up high when you know you failed without giving your best effort.

This sad story only brings to my mind the Carrie Underwood and Randy Travis song "I told you so!"

So as this story is coming to an end and lives have been turned upsided down....Do the right thing...the right thing for the city of Greensboro and give back your undeserved AIG bonuses and give it to the hard working laid off and to be laid off employees of UG where they can get back on their feet easier. We all know you got yours and money will never be a concern to you or your family and that is a great thing, but do the right thing and give back to the employees of your former company! Is that too much to ask?

datrue

June 2, 2009 - 7:58 am EDT

Another armchair CEO.....LMFAO!!!! It's hilarious how people will come in here and regurgitate exactly what they see and hear on the nightly news or read in this Fish Wrap, and then pass it off as their own thoughts. Anyone who knows anything about the AIG situation knows that Mr. Nutt nor any other UG employee was involved in the AIG bonus hub bub......which is what you are insinuating. Read and learn and then speak!!!!!! Don't just run your trap because you like to hear yourself and pretend to know what you are talking about.

roundhere

June 2, 2009 - 2:27 pm EDT

Maybe you should know what you're talking about before you call names. Mr. Nutt ran this company in the ground for pure greed. He was part of a select group of AIG Executives that were afforded hugh windfalls if numbers were met and he met them with regardless of the outcome. If challenged, you were humiliated publically, then either demoted or released. He systematically over-rode business unit director's decisions and then placed his chosen group in positions to make sure there were no challenges. The talent pool at UG has deminished since his tenure began, because he opted for weaker executives that would obey and follow regardless of the outcome. Since you know so much about the bonus payments of AIG and who got them, you're probably one of those sheep that followed Billy Boy around the building with you nose just below his belt. That would presently benefit your situation of LMFAO since it would not have far to fall.

LONESTAR

June 2, 2009 - 12:10 pm EDT

The Ivory Towers are crumbling , they need to take a few more good old boys down, they had everyone drinking the "Kool-Aid" . Senior Management cared only about their big fat bonus and looked the other way when employees detected problems. If you spoke out you were fired and they created lies to make that happen. They are finally getting what they deserve!

AIGsucks

June 2, 2009 - 12:52 pm EDT

datrue:

That is exactly what they would like for you to beleive while they are raking in the dough and laughing all the way to the massage parlor! I guess if you ever worked there you were one of the Yes men or women. Or maybe one of BN's good ole boys or MD's girls.

And what a great caring leader the former ceo was.......tell that to the 30 or so people that were laid off in 2005-6 when the company was making the most money ever in its history! And giving 100M dividends back to AIG (oh yeah some of it was used for bonuses!) Wouldn't you think even though their department wasn't needed anymore that a caring leader would find somewhere to put those hard working people (underpaid at that too) when the company was flush in CASH?? But no he cut them and used the savings for Center City park trees or a suite at the baseball park! Not hardly the straight arrow caring man that the media portrays him as.....I don't read the paper for my comments I experienced them first hand!

UG leaders often joked of the name on the outside of the building being United Guaranty and not United Way....hmm he did do a great thing is raising lots of money for the great cause that United Way is...but do the right thing now and maybe change the name on the building to United Way and donate them some floor space along with the undeserved bonuses that you received Mr. caring leader!

I have a place in the recycling bend in my office for their resumes! Good luck with AIG UG on your resume if you held a senior position!

Ergo

June 2, 2009 - 2:15 pm EDT

You have a recycling bend?

Good Grief

June 2, 2009 - 2:24 pm EDT

datrue, instead of another armchair CEO, it sounds like AIGsucks is your basic disgruntled former employee with an axe to grind.

AIGsucks

June 2, 2009 - 11:33 pm EDT

AIGsucks is a happy former employee who got the heck out just in time as my department was about to get axed!

AIGsucks just wants the public to know the facts and truth about the ex CEO. While he may appear to be the "straight arrow" guy out in the community with his fundraising and all...he was totally different in the confines of 230 N. Elm St. Yes, the same guy that you met at the country club drinking high priced wine and laughing is the one who cursed out admins! If your wife worked under him, ask her you might be surprised to hear her answer!

datrue.....have you even been in a meeting with him when you were told to "make it work" and told to change models to make the price fit what the lender would pay, knowing that you were underpriced? And then having him say I am going to hold you and you responsible if it doesn't work out??

Ever been in a meeting telling him we are underpriced in good times with a certain large lender and drastically underpriced in times of stress...and have the top of his head turn fire engine red and told we have to have this business and the growth it will bring?

He might listen before he makes decisions but he did exactly what he wanted to do regardless of the evidence.

And a caring guy doesn't layoff a group of people while the company is making the most ever in its history. No amount of fundraising for United Way or the Bryan foundation makes up for that and the loss those hard working employees suffered.

Not all MI companies are going under! Hopefully, the hard working employees who through no fault of their own that have and will lose their jobs as a result of the former CEO will land at another MI company and prosper as the economy turns around.

Now that the former CEO has lots of time on his hand, will he perform the good deeds of helping United Way, big brothers/big sisters, and other worthy causes or was all of that just PR on his part as well?

jer29-11

June 2, 2009 - 11:06 pm EDT

Maybe his admin deserved it .... between reading magizines and shopping on-line, I'm sure she hardly noticed.

AIGsucks

June 2, 2009 - 11:55 pm EDT

maybe he deserved it! No wait a minute he got what he deserved last week.

Now that he lots of time on his hands lets see if he will do the right thing and raise money for United Way or the Bryan Foundation or Big Brothers/Big Sisters? or was all of that just a PR move on his part!

The guy in the community was not the guy in the office!

Ever been in a meeting when you tell him the deal doesn't work and the top of his head turns fire engine red and you are told to make it work we need the volume? Windfall bonuses only lead to greed and greed leads to disaster. And the collateral damage he talks about that is left behind includes the homes of former employees that lost their jobs through no fault of their own but by bad decisons of their leader. A leader that had to spends thousands on rope courses to get his employees to trust him. What a waste! A leader that deserves trust doesn't have to resort to superficial means.

igliigli

June 2, 2009 - 7:40 am EDT

The UG IT&S (computer) department has a long history of firing US Citizens
and replacing them with less quaified H1B visa holders. The resulting
badly done computer systems played a major role in bringing UG down.

Froggie

June 2, 2009 - 9:50 am EDT

igliigli: Seems strange that the IT department would have a major role in bringing down UG? Seems like the business management and underwriting practices would have been the major flaw in the system. What did IT do? Strange comment?

MtgInsChick

June 2, 2009 - 10:44 am EDT

UG fell behind the other mortgage insurance companies when it came to IT. Customers would rather use eMagic or other PMI company's systems rather than deal with UG's clunky, outdated systems. Most of the systems were outdated before they were rolled out. The people who were in charge of implementing these useless systems were rewarded, while those that pointed out how difficult it was to use the systems were shown the door.

jer29-11

June 2, 2009 - 11:02 pm EDT

Billy Nutt did many good things for UGC and the community. He may have offended certain people at certain times, but he did what any CEO must do ... grow the Company. Try doing that without making some people mad or making some mistakes along the way. He was the Captain and didn't want the ship to sink on his watch. I admired him. Still do. Good luck to the new CEO. He'll need it.

getitright

June 3, 2009 - 7:46 pm EDT

jer29-11

You sure changed your attitude from saying his admin. deserved his wrath to admiring him. Sounds like you still live on the 7th floor of the Ivory Tower and want to keep your job. Billy Nutt was a mean person and mistreated many people. He deserves what he gets.

jer29-11

June 4, 2009 - 8:06 pm EDT

getitright,
Why do you think I have to work on the 7th floor of the Ivory Tower to know what a loser his admin is? Her reputation is all over the company on every floor. The first bad mistake Eric did was decide to keep her. If that is his best judgement, then Heaven help the rest of his decisions. He'll keep the bad and watch the great talent walk out the door..... no wonder the best have already left.

AIGsucks

June 4, 2009 - 11:04 pm EDT

The best have already left the door?? How many since this Monday?

Talk about loser....Do you even know the definition of a loser? The real loser got the axe last week! And it was his Admin...if she is so bad and he is such a good leader then why didn't he fire her?? Better yet look at his sidekicks? All a bunch of losers...the CFO, the Chief Risk Officer, CIO, on and on!

The good talent has been long gone...in fact they starting leaving in early 2000's. Why? For reasons you know yourself! All of the good Actuary talent hit the exits! WHy not? They knew what was coming and predicted it and no one listened! The ones that left early on their own knew the deal. The ones that will be out soon....well wait and see who hires them!

Taking a money making machine to a money bleeding machine..what does that qualify you as?

The new guy will take care of the other losers in time and probably quickly too!

getitright

June 5, 2009 - 11:40 am EDT

RIGHT ON!!

As an ex-UG employee, I will tell you the good old days under Charlie Reed were outstanding!!! What a great leader and a gentleman. He is still honest and he grew a company that we were all proud to be a part of. His biggest mistake - hirring Billy Nutt.

roundhere

June 8, 2009 - 12:01 pm EDT

Please be correct when talking about Charlie. He did not hire Billy Nutt. Billy Nutt has been around this company for 30 years and held numerous positions. His major accompolishments were to screw up in all of those jobs yet get promoted to something else. Just go back to those glorious days of Builder Bonds and Housing Finance Issues and show his record with those. There wereother opportunities to fire Billy before Charlie. If Charlie is guilty of anything, it was his self belief that Billy would lead the company down the path he set. Billy betrayed that trust to the man that did the most for him, yet another glimpse at his true character. Excuse me, I stand to be corrected, another glimpse at his true lack of character.

getitright

June 5, 2009 - 11:37 am EDT

jer29-11

I stand corrected. Sorry to make the wrong conclusion.

You are right about his admin. She is a loser and has been a bad seed for everyone since she arrived. If Eric decided to keep her, then he is getting bad advise from the rest of the "boys" - same stuff, different day.

Nothing is going to change there until a complete changing of the guard, and I think it is too late for that.

jer29-11

June 6, 2009 - 12:35 pm EDT

You 'GOTitright', alright! The other "boys" didn't have the onions to stand up to Billy to tell him he had a "toxic asset" personnel problem, and they most likely will not stand up to Eric, Jr. either. As long as HR protects her, she's safe to carry on as usual, Eric will soon tire of her as she sits at her desk and cries for Billy, twirling her cheap pearls. The good news is, as his restructuring plan gets rid of the other dead wood, she may actually have to do some real work to earn that fat paycheck.

really

June 28, 2009 - 10:47 am EDT

I'm not sure but I do not think Eric is there to take advice from anyone. He has a SOP to follow for getting a company ready for sale or runoff. He has no personal ties to anyone at UG. That's why it's so easy for him to lay off employees. It's just business for him.

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