Stabilizing GM prepares to pick division leader

May 20, 1994|By New York Times News Service

DETROIT -- General Motors Corp. is preparing to elevate one of its young executives to a new post, the president of its crucial North American operations, in a sign that it believes its once-collapsing core business has stabilized, people inside GM said yesterday.

John F. Smith Jr. has had the lead role in stemming billions of dollars of losses in North America since GM's board ejected the company's top managers and installed him as chief executive in November 1992.

Now that a vigorous cost-cutting campaign and a realignment of divisions and its vehicle-development programs have taken hold, Mr. Smith would prefer to focus on strategic planning for the entire corporation, GM executives said.

Contrary to many rumors and at least one report published in Detroit, however, Mr. Smith will not assume the chairmanship of GM this summer. Instead, John G. Smale will continue as the nonemployee chairman of the world's largest industrial company, the GM sources say.

While gossip is rife within GM about the management changes, the rumors lack the panicked edge they took on during the revolution that led to Mr. Smith's promotion. The changes would represent the greatest management restructuring since then, but the candidates were hand-picked and developed by Mr. Smith.

While a dark horse could still emerge, the leading candidates for the North American presidency are two baby boomers with dual roles in the corporation and reputations as flexible, approachable men, in stark contrast to GM executives of old.

They are G. Richard Wagoner Jr., 41, GM's chief financial officer and the head of its worldwide purchasing operations, and Louis R. Hughes, 45, president of GM Europe and the head of its international operations.

GM executives and auto industry analysts said that, while it made sense to have top executives wear two hats during the crisis, as the company stabilizes its leaders need to be freed to plan long-term strategy.

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