Robert C. Stempel, the new chairman of General Motors Corp., said yesterday he will begin a modest reorganization of the giant automaker in a bid to make it a tougher competitor in the 1990s.
In his first day on the job, Stempel announced several management changes and a new management thrust that he said will make GM the world's highest-quality, lowest-cost auto company in the 1990s.
GM today has some of the world's highest production costs. Its product quality ratings are improving but still lag significantly behind those of Japanese companies, according to many auto industry analysts.
Stempel succeeds Roger B. Smith, who retired Tuesday after nearly a decade in the chairman's seat. Smith's radical 1984 reorganization of the company combined five car divisions into two groups and brought about other changes that boosted its operations overseas but, critics contend, damaged the company's performance at home.
Smith also spent billions of dollars buying high-technology and other companies in an attempt to diversify GM's revenue base.
Stempel praised Smith's vision and efforts. But the new chairman said he will move GM in another direction -- toward the basics of manufacturing cars. "I think we've been through enough reorganization and diversification for a while," Stempel told reporters at GM's headquarters in Detroit. "Our team will now concentrate on our core business."
To that end, Stempel unveiled a plan under which he and his executive group will oversee product-quality control. Also, in a move that alters the direction of Smith's plan to place vehicle development in the hands of two big groups, Stempel said GM's traditional five car divisions -- Chevrolet, Pontiac, Buick, Oldsmobile and Cadillac -- will resume responsibility for much of their product development and marketing.
That does not mean the divisions will be allowed to engage in the internecine warfare that Smith's reorganization tried to eliminate, Stempel said. He said the new idea is "strategic coordination with freedom to execute locally," which means that GM will set overall goals and the divisions will be relied upon to devise complementary strategies for meeting those goals.
Stempel indicated that the two groups Smith put in place, the Buick-Oldsmobile-Cadillac Group and the Chevrolet-Pontiac-GM of Canada Group, will remain in place. "These are not major changes. We're not taking General Motors apart and putting it back again," he said.
The message is that all segments of GM will have to pull together, while carrying their own weight, to ensure the company's future, Stempel said. "It's going to take a concerted team effort to improve GM's longstanding role of industry leadership."