General Motors Expected to Shift Top Jobs Tonight TROUBLED AUTOMAKER

By Paul A. Eisenstein, Monitor | The Christian Science Monitor, June 27, 1994 | Go to article overview
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General Motors Expected to Shift Top Jobs Tonight TROUBLED AUTOMAKER


Paul A. Eisenstein, Monitor, The Christian Science Monitor


CAPPING a desperate, two-year cost-cutting program, General Motors Corporation is expected to announce another sweeping realignment of its top management this week.

The changes, if approved at tonight's board of directors' meeting, should make it easier for GM president and chief executive officer John Smith to streamline the troubled North American Automotive Operations (NAO). Analysts say the shuffle could position GM, after losing billions of dollars since the late 1980s, to earn record profits. There "could be a few surprises," one source says, but none like the move in 1992 to oust then-chairman Robert Stempel and his management team. And there aren't likely to be new cutbacks - good news for 320,000 beleaguered United States workers, who have born the brunt of GM's cost-cutting efforts.

The most visible change will be the expected promotion of Richard Wagoner to NAO president. He was chief financial officer and director of international purchasing operations. "He's a team player" who will be quarterback to coach Jack Smith, says David Cole, director of the Office for the Study of Automotive Transportation at the University of Michigan, Ann Arbor.

Mr. Smith "has been frustrated because things just aren't happening fast enough," notes Detroit-based analyst Steve Morrison of the AutoPacific Group.

Not surprisingly, GM's turnaround has been one of the most costly in corporate history. In three years, GM has closed a score of plants and cut more than 50,000 jobs. Well-established power bases have been eliminated. Since resistance from management has been strong, GM has yet to achieve the goals Smith outlined. Mr. Wagoner engenders the loyalty needed to motivate GM's troops and get the corporate-restructuring program moving quickly.

Another winner will likely be Michael Losh. Vice president and group executive in charge of North American sales, service, and marketing operations, he is expected to become CFO.

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