Newspaper article THE JOURNAL RECORD

Retiring GM President Says Modernizing Hey to Tenure

Newspaper article THE JOURNAL RECORD

Retiring GM President Says Modernizing Hey to Tenure

Article excerpt

DETROIT - RetiringGeneral Motors Corp. President F. James McDonald looks back on his six-year tenure as a time when the world's largest automaker faced the necessity of modernizing to compete in its home country.

McDonald, a 64-year-old engineer, stepped into his job in February 1981, following a year when GM lost $763 million and the nation was hit with a recession that forced buyers to keep their wallets closed.

He leaves the job Aug. 31, after 47 years with GM, for a retirement of serving on the boards of directors of three other major corporations, fund-raising, fishing in northern Michigan and wintering at a second home in Vero Beach, Fla.

In 1981, McDonald and GM Chairman Roger Smith looked at short-term and long-term answers to problems they faced: the aftermath of the second fuel shortage and recession and permanent competition from Japanese makers who built cars more efficiently.

``Those things permanently changed the market in the United States,'' McDonald said in an interview. ``The fuel shortages gave the Japanese a foothold with cars they'd been producing forever for their market, so it wasn't a big change for them.

``The fact that they then established themselves and that they had high quality cars relative to domestic manufacturers changed the ballgame for all of us.''

The first thing GM had to do was improve the quality of its products and the corporation's attitude toward quality. To do that, McDonald and Smith launched a $40 billion program to modernize or replace plants and equipment. The program included the General Motors Assembly Plant in Oklahoma City.

They also streamlined their huge organization, putting the five car divisions - Chevrolet, Pontiac, Buick, Oldsmobile and Cadillac - and its Canadian operations into two groups that share engineering, assembly and some parts production. They took similar steps for truck and part operations.

``It was the biggest shuffle in the world. I'll predict that those reorganizations are going to pay off for a long, long time. …

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