3 outside directors cited in Stempel's fall A 'wake-up call' for other boards

October 27, 1992|By Linda Grant | Linda Grant,Los Angeles Times

NEW YORK -- Sources close to General Motors Corp. said yesterday that the board of directors' putsch against Robert C. Stempel's management, led by John G. Smale, retired chairman of Procter & Gamble, was strongly supported by directors Dennis Weatherstone, chairman of the New York bank J. P. Morgan & Co., and Thomas H. Wyman, former chairman of CBS Inc.

J. Willard Marriott Jr., chairman of the Marriott Corp., played an active role last spring when the board first asserted control, sources said. But Mr. Marriott has taken a back seat this fall while attending to problems in his hotel empire.

Of the 15 members of GM's board, 12 are not employed by GM. Jeffrey A. Sonnenfeld, director of the Center for Leadership at Emory University's business school, said that Mr. Stempel had suffered in part because he has not served on other corporate boards, and therefore was heavily reliant on his board for advice.

"Since he ran the company for only two years, it wasn't his board," Mr. Sonnenfeld said. "He hadn't had a chance to shape his own group of adviser-partners."

Some of the failed policies Mr. Stempel inherited were implemented by the former chairman and chief executive, Roger B. Smith, who is also a member of the GM board. David E. Cole, director of the Office for the Study of Automotive Transportation at the University of Michigan, said that Mr. Smith played a minor role in the reshuffling.

Mr. Cole said he questioned why Mr. Smale didn't "lead the charge" toward restructuring in the early 1980s when he joined the GM board. "We were all concerned at that time that GM wasn't going through the kind of trimming and focusing that Chrysler and Ford were."

Donald Frey, a former Ford Motor Co. vice president of product development and now an engineering professor at Northwestern University, said he believes that outside directors provide just what GM needs: "a . . . gimlet-eyed outsider to shake up an inbred company that is losing market share and hemorrhaging cash."

Many observers said that they believed that Mr. Smale would be named interim chairman at GM. They said that the impact of his actions on the giant auto manufacturer would be noted in every corporate boardroom in the country.

Warren Bennis, director of the University of Southern California's Leadership Institute, said: "This is a kind of wake-up call to all boards. The GM directors stepped up to the plate and said 'We must make changes that apparently current management can't.' "

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