PONTIAC, MICH. -- The Pontiac Fiero could have been one of Roger Smith's dream cars.

On the computer design screen, the little two-seater seemed to capture the changes that Smith sought to impose on General Motors Corp. during his decade as its chief.

Bright and daring, it was out of keeping with an image of dullness and look-alike predictability that would steadily envelop the giant automaker in the 1980s. Encased in lightweight, high-strength plastic, the Fiero proclaimed GM's technological prowess. Its $7,999 price tag left it within range of younger car buyers who were deserting GM in favor of its foreign rivals.

But the Fiero failed.

Now, a few days after Smith's departure as GM's chairman, the Fiero is a fast-receding memory. Its memorial is a deserted steel and concrete auto plant on the northwest border of this small industrial town, the Fiero assembly line that opened with banners and bands in 1983 and closed with recrimination and excuses five years later.

The Fiero stands out as a case study of what happened to General Motors under Roger Smith in the 1980s, according to some GM executives and analysts outside the company.

Smith, satirized as a remote, callous company man in the film "Roger and Me," saw himself as a revolutionary when he took over in 1981, vowing to dispel GM's lethargy, open up its vast bureaucracy to new ideas, overcome the internecine quarreling among its divisions and equip it to respond to a harsh and fast-changing automotive marketplace.

A 41-year veteran of GM, Smith set out to reshape the automaker through a $50 billion investment in robots, new factories and advanced manufacturing systems. He imposed a jolting reorganization of the design and production operations, seeking more accountability and faster decision-making. He got GM to spend $7.5 billion to acquire Electronic Data Systems Corp. and Hughes Aircraft Co., hoping their expertise would give GM a powerful technological advantage in the future.

But all of this didn't sell enough cars. GM's share of the U.S. auto market dropped to 36 percent in 1990 from 46 percent a decade earlier. The result was 12 closed plants, including the Fiero facility here, and the loss of 30,000 hourly jobs.

While GM's auto business in Europe was successful, it struggled to break even in this country. It now earns only $47 per U.S. vehicle sale, compared with $588 it earned six years ago. GM is still the highest-cost automaker in North America, a condition that has severely damaged its profits per car.

Smith's final grand gesture is the Saturn car project in Spring Hill, Tenn., which he billed as the model for the new General Motors. The Saturn, a compact due to go into production this fall, may vindicate Smith, who earned $17 million in a decade as chairman. But the Saturn team has had to wrestle with many of the same internal forces that helped kill the Fiero.

Design Compromises

The Pontiac sports car, introduced in 1983, could not escape the gravitational hold of GM's bureaucracy, which imposed a series of compromises on its design and construction that hurt the car badly with customers and demanded profits the car could not produce.

"The problem is the system," said Dennis Virag, a Michigan automotive industry analyst. "It's not Roger Smith or any one individual. It is just a system that has grown up over the decades that is difficult to govern."

Pontiac executives saw the Fiero as a way to revive the division's sagging public image.

"It was not just a little red car. It was an opportunity," said Hulki Aldikacti, the advance design engineer and Pontiac project manager who guided the Fiero into production.

The Fiero would be the first American mid-engine two-seater ever sold to the general public and the first to use new lightweight, high-strength plastic body panels. It also would mark the first time that GM successfully experimented with simultaneous design and manufacturing -- developing the car and its production system at the same time in a bid to turn out the product quickly, cheaply and with relatively few defects.

Opposition to the program was based on economics and politics, said James Wangers, a Detroit auto-marketing consultant who helped to develop the Fiero's early advertising campaigns. Some top GM executives reasoned that GM already had a two-seater, the Corvette. GM officials couldn't see why Pontiac should do battle with Chevrolet, he said. For years, the powerful Chevrolet Motor Division opposed the Fiero inside GM's Product Policy Group and executive committee, the key decision-making bodies on new vehicles.

"You've got to realize that the Fiero had as many haters as it did lovers," the Pontiac official said. "You had two camps -- the Pontiac people who were upset because they felt they never got what they wanted from the corporation and who wanted a car exclusively all their own, and the Chevy people who always seemed to get everything.

"The Fiero was the first car Pontiac got that it didn't have to share with any other division, and they partly got it by implying that what they really were going to build was a two-seat version of the ordinary econobox."

Still, championed by several Pontiac executives, including Robert C. Stempel, now GM's new chairman, the Fiero had obtained tentative production approval from the Product Planning Group by the time Smith took charge. But orders to stop work on the Fiero went out twice under the aegis of Smith's budget people. Curiously, those orders never reached the people who were doing the work, and therein lies a tale of how a giant corporate bureaucracy can be circumvented.

"I had excellent protection," recalled Aldikacti, now a consultant to GM's Saturn Corp. Aldikacti said he kept working on the Fiero and "didn't go to any meetings where I thought that they were going to discuss something that I had already made a decision on." Pontiac division manager William E. Hoglund, or one of Aldikacti's other Pontiac bosses, went to the meetings instead.

"I told them that if anybody had a question for me, 'Here's my telephone number and addresses. They can come and see me or call me and discuss their concerns. But they had also better have an answer for my concerns. Otherwise, I'm not going to waste their time or my time,' " Aldikacti said.

The strategy was aimed at getting Fiero critics "one-on-one, on my ground, where they did not have a forum," Aldikacti said. It worked perfectly in a corporate environment where direct personal confrontation is strenuously avoided.

"Bill {Hoglund} would tell them, 'Talk to Hulki about that,' but no one ever came," Aldikacti said. And because no one ever came to personally order him to stop working, "I kept going," Aldikacti said.

Finally, Production

In 1982, Smith's lieutenants, with his blessing, gave the go-ahead for fall 1983 production of the Fiero as a 1984 model.

Getting approval for a new-car project was one thing. Actually getting it into production was another, and the Fiero's need for new tooling to mold plastic panels and attach them to steel frames complicated things.

GM's financial officials insisted that Pontiac cut the two-seater's development costs down to a rather skimpy (by U.S. auto industry standards) $300 million. The Pontiac people attempted to work within that spending restriction by borrowing parts from other GM cars, including a front-suspension from the Chevrolet Chevette.

Some early Fieros were plagued by a frightening defect -- the unusual placement of the engine just behind the passenger compartment could bring leaking oil in contact with the hot exhaust system, causing engine fires that destroyed some 1,500 cars. Some GM technicians say the requirement that the Fiero be built with less expensive parts from cheaper GM models contributed to the problem.

Other product and marketing decisions were needed to keep the Fiero's costs in line and make the car profitable. Two of those choices -- to eliminate power steering and to boost the car's proposed production levels from 50,000 vehicles a year to more than 100,000 -- helped to ensure the Fiero's early demise, according to some people familiar with the project.

"It just didn't make sense," said Jimmy Whitham, a committeeman with United Auto Workers Local 653 here, which represents the Fiero plant, even in its coffin state. Whitham, who served as Fiero plant chairman, worked with the Fiero program from the time the car went into production in 1983 until the last Pontiac two-seater rolled off the line in August 1988.

"Both the management people and the union people inside the plant kept begging GM for power steering, especially because the Fiero was being sold as a commuter car to a lot of young women," Whitham said. "Our wives were telling us that they loved the looks of the car, but couldn't park it. But there just didn't seem to be any engineering support for the car outside of the four walls of the plant."

"It is typical of GM," consultant Virag said. "They spend more money on market research than anyone else, but they don't seem to believe their findings."

John G. Middlebrook, Pontiac's current division manager, agreed that the Fiero was assembled with compromises, but said that none of those compromises was made with careless disregard for product quality or customer safety.

"I just see it as doing the best with the resources we had available," said Middlebrook, who was serving as Pontiac's manager of product planning at the time of the Fiero's development.

The car had to be affordable for the company as well as the customer, Middlebrook said. "There were a lot of things that were compromised on the Fiero in order to get it done at the approved capital spending levels," he said. "We would have liked to have packaged it differently when it was coming out of the chute, but the problem was that people were concerned about entering the market on time and on cost, which meant we had to make some compromises."

However, Middlebrook conceded that the absence of power steering (the Fiero never did get it) was a marketing-research error that was later compounded by cost considerations.

After finally approving the car, GM was in a rush to get it to market -- partly to avoid costly production delays, but also to beat out Toyota Motor Corp., which was planning to ship its then-inexpensive MR2 two-seater to the United States, according to Middlebrook and other GM officials.

In its haste, GM neglected to include a sufficient number of women in its car-test clinics. Women might have been more sensitive to the difficulty in steering the Fiero. Men were not affected -- at least, the tested men said they were not affected. "We missed it," Middlebrook said of the Fiero's lack of power steering.

It was a damaging miss. Women accounted for more than half of the Fiero's 101,820 sales in 1984. But GM still refused to make the switch to power steering.

"They were so shocked that the car was selling so well, they figured: 'Hey, if it's selling without power steering, why bother spending money on it?' They just got greedy," a former Pontiac official said.

Toyota Got the Message

Toyota made the switch.

The Japanese company's market researchers discovered the complaints about the Fiero's steering feel and began retrofitting its soon-to-be-shipped MR2 cars with electric power steering devices. The MR2s went on sale in early 1985 and are still on sale today, along with Mazda's popular Miata two-seat convertible.

Today, Toyota profitably sells about 20,000 MR2s in the United States annually and Mazda is making money and invaluable image gains on yearly U.S. sales of 40,000 Miatas, while GM could not make a go of it after selling 342,731 Fieros in five years.

A part of the problem is that GM "has not yet learned how to make money on small volumes," which is why the company pushed for Fiero sales of 100,000 vehicles annually in a market where, prior to 1984, no automaker had managed to sell more than 52,000 two-seaters a year, Wangers said.

Toyota and Mazda produce small-volume cars profitably by using lighter-weight, less-expensive dies, and by using one plant to produce multiple lines of vehicles, according to a report on auto industry competitiveness by Harbour & Associates Inc., an auto consultant and marketing research firm based in nearby Troy, Mich. GM is experimenting with so-called mixed-production systems, but has not been able to match Japanese efficiency in applying that process, the report said.

Despite all of that, the Fiero was a hot seller -- for two years. The car's 100,000-plus success in 1984 was followed in 1985 with sales of 90,691 vehicles. But the onslaught of competition from the Japanese, combined with the car's early engineering problems "and the fact that the market simply could not accept that many two-seaters" to depress Fiero sales.

By 1987, with Fiero sales running at 47,000 units, GM began circulating internal "Fiero situation analysis" reports that, according to some of those documents obtained by The Washington Post, urged the company to "cancel the car line completely, as soon as possible."

In March 1988, with the necessary approval of Smith and the company's executive committee, the "cancel" order was given.

A variety of factors killed the Fiero. Its gestation was hampered by corporate politics and very real economic concerns. It came of age at a time when GM had not fully committed itself to mixed production -- subsidizing the cost of one vehicle line by producing others in the same factory. Though it experimented with many promising new technologies and labor-management programs now used throughout GM's vast U.S. empire, the evidence is that the GM hierarchy, at the time those things were taking place, did not realize the full value of the Fiero program.

Aldikacti, who poured his mind and soul into the project, said he has no regrets, and he bridles at the notion of the Fiero being held up as an example of GM's failings.

"GM has enough wisdom, and there are enough people who I know personally in GM who are in big positions, and who are concerned about the competitiveness of General Motors in the next 10 years and in the next century," Aldikacti said.

Among those people are Stempel and Hoglund. Will they study and understand the Fiero's history?

"I think they will," Aldikacti said. "I hope so, anyway."