General Motors Chief Resigns after Board Turns Up Pressure as in Many Large Companies, GM's outside Directors Have Taken a More Assertive Role

By Paul A. Eisenstein, Monitor | The Christian Science Monitor, October 27, 1992 | Go to article overview

General Motors Chief Resigns after Board Turns Up Pressure as in Many Large Companies, GM's outside Directors Have Taken a More Assertive Role


Paul A. Eisenstein, Monitor, The Christian Science Monitor


A STRUGGLE for control of General Motors Corporation ended yesterday with the resignation of its chairman, Robert Stempel.

"I made this decision in the best interest of the corporation and its fine, dedicated employees at all levels of the organization," Mr. Stempel said in a statement released by the world's largest automaker. "I could not in good conscience continue to watch the effects of rumors and speculation that have undermined and slowed the efforts of General Motors people to make this a stronger, more efficient, effective organization."

John Smale, chairman of the GM board's executive committee, responded that the board had accepted Stempel's resignation and asked him to continue as chairman until a successor could be named. Mr. Smale led a group of GM's outside board directors pushing for Stempel's departure. When GM's board meets next Monday in New York, it is expected to name Smale, former chairman of Procter & Gamble Company, as interim chairman.

Behind the resignation are major financial troubles at GM. Last year General Motors lost $3.8 billion on worldwide revenues of $109 billion and assets of $104.8 billion. In North America, the company employed 113,000 white-collar and 258,000 blue-collar workers. It sold 4.54 million cars and trucks. Given its multitude of suppliers, GM's economic impact is huge.

On Thursday, the company is expected to report a worldwide, third-quarter loss of $845 million. The deficit will continue through at least the fourth quarter, analysts say, and they caution that it will be hard for GM to get back into the black until the economy improves. That's because problems are centered in GM's core North American operations. For years, GM was the role model of American industry, building half the cars sold in the United States, rolling up billions in profits and paying out handsome dividends to confident investors. But the recession of the early 1980s and the rise of Japanese carmakers revealed some fundamental weaknesses, including serious quality problems and inefficient and ill-managed factories.

GM's first answer was automation. During the '80s, it invested $40 billion in new factories filled with the latest in robotics. Despite that investment, GM remains "the very- high-cost producer," spending $1,000 more to assemble a car than Ford or Chrysler, according to Detroit manufacturing consultant James Harbour, who recently completed an extensive study of Big Three productivity. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

General Motors Chief Resigns after Board Turns Up Pressure as in Many Large Companies, GM's outside Directors Have Taken a More Assertive Role
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.