Stempel Fulfills `Car Guy' Billing
GM's NEW CHAIRMAN
WHEN Roger B. Smith drove a Saturn subcompact off the assembly line in Spring Hill, Tenn., this week, it marked the end of an era and the start of another. It was the last act as chairman of General Motors Corp. for the controversial Mr. Smith, who retired. During his decade-long tenure, GM's share of the United States market plunged a dozen percentage points, settling as low as 32 percent last November. In the process, a dozen assembly plants closed, and tens of thousands of jobs have been cut.
Earnings jumped to record highs, although at $1.6 billion they were sharply lower in the first half of this year, compared to the same period of 1989.
The fate of the Saturn may ultimately help historians decide whether to cast Smith as hero or corporate klutz. Since 1984, GM has spent $2.5 billion to design an all-new small car and erect for it a state-of-the-art assembly line.
It is Smith's hand-chosen successor who will be around when Saturn finally makes its debut next fall. On Wednesday the reigns of power at GM, the world's largest industrial concern, were handed over to the new chairman, Robert C. Stempel.
Though Mr. Stempel has been with GM since 1958, spending the last three years as president, he hovered in the shadows of the strong-willed Smith.
While Smith was often assailed as a ``bean counter,'' a cold-hearted accountant ready to compromise a product's looks and performance to save a few dollars, Stempel is in industry parlance a ``car guy.'' Trained as an engineer, he is truly fond of the industry and the products it builds, insiders say.
Stempel fulfilled that billing during a news conference marking his first day as chairman. He indicated that GM will return to its core car and truck business, with the aim of increasing market share in North America and overseas. He is reorganizing management, shaving away some of the layers of bureaucracy that make it hard to react quickly to changes in the new car market.
The key to recovering market share profitably, he stressed, is getting the decisions made as close as possible to the customer level, rather than at the 14th floor of GM's Detroit headquarters.
``There is a definite effort to reduce the layers of management and move decisions down so more are made at a local level,'' Stempel said.
Stempel also cautioned that he's in no hurry to clean house.
``Rest assured, we're not going to take GM apart and put it back together again,'' he said. That was a clear reference to Smith's wholesale reorganization in 1984, which left many employees wondering what they were supposed to be doing and to whom to report.
Not surprisingly, many industry observers remain skeptical. But there are some signs GM has at least bottomed out. Market share has been rising in recent months, reaching 37 percent in June. North American automotive operations are back in the black. And recent surveys have shown an improvement in the quality of GM vehicles.
GM has an aggressive product development program underway, with a score of new vehicles due by mid-decade.
It is still likely that many will use the Saturn to judge GM's performance. If the car catches on with the young, import-oriented buyers the new division is hoping for, the Saturn could, by itself, boost market share by two points.
If sales languish, it will be a clear sign that even GM's best intentions are misguided, and cast an embarrassing blot on the Stempel regime even before it has a chance to stamp its own mark upon General Motors.