Retiring chairman viewed as GM's savior
By John Porretto
Associated Press
DETROIT — Jack Smith accepts his designation as the man who saved General Motors Corp. the same way he accepted the job to run the company just more than 10 years ago — reluctantly.
Smith, who ends his 42-year career with GM when he retires as chairman May 1, recalled his thoughts when the automaker's directors shook up senior management in 1992 and asked him to steer the company as its CEO.
"I wasn't looking for the job, that's for sure," Smith, who turned 65 on April 6, said during an interview in his office atop GM's towering downtown headquarters.
"On the other hand, it was impossible not to do my best to try to help," said Smith, chairman since 1996. "As it turned out, it wasn't as tough as it looked."
Smith, who will be replaced as chairman by CEO Rick Wagoner, 50, paints a picture of a company that for decades was too internally focused and reluctant to change. The result was a massive bureaucracy and dire financial straits.
GM, the world's largest automaker, lost a record $23 billion in 1992 after a loss of $4.5 billion the previous year.
The company faced slumping sales, mounting debt and a weak U.S. economy.
And while Americans were beginning a love affair with trucks and sport utility vehicles, GM's lineup was geared toward passenger cars.
"We didn't look like any other car company in the world," said Smith, who at the time was running the company's international operations.
Smith replaced Lloyd Reuss as GM president in April 1992 in a boardroom coup.
Seven months later, after the resignation of chairman and chief executive Robert Stempel amid more board rumblings, Smith was named CEO.
His daunting task: restructure one of the world's largest companies, one that was running much the way it did when it was organized by Alfred P. Sloan Jr. some 70 years earlier.
Smith immediately began reeling in parts of the company that for years had operated as semi-independent businesses. GM consolidated 27 purchasing centers into one. Over time, seven engineering centers became one. The company's central office, which had some 13,000 employees when Smith took over, today has 1,000.
GM's total employment has fallen from 756,000 in 1991 to 349,000, although not all the reductions have meant layoffs; some were part of subsidiary sales and restructurings.
Surprisingly, Smith said much of the restructuring transpired with little internal strife.
"My honest take is that everyone knew we were in trouble, and everyone knew we needed to change," he said.
Today, GM ranks highest among the domestic automakers in leading quality, productivity and manufacturing surveys.
The company also was the industry leader with 28.3 percent of the U.S. market at the end of 2002.
Its nearest competitors: Ford Motor Co. with 21.1 percent, DaimlerChrysler AG's Chrysler Group with 14.6 percent and Toyota Motor Sales USA with 10.3 percent.
Under Smith's leadership, GM has opened plants in Germany, Brazil, Argentina, China, Thailand, Poland and Hungary.
John Hoffecker, an executive with the corporate reorganization firm Alix Partners, likened Smith's revival of GM to that of Jack Welch, who is widely credited for turning General Electric Co. into one of the world's most admired corporations.
"Each of them had different places in time," Hoffecker said. "But (they) did a very nice job."
Smith, a native of Worcester, Mass., has sold his home in Detroit and is beginning to make the move out of his spacious office.
