NEW YORK -- In an unprecedented bloodletting aimed at reversing 10 years of plunging fortunes, General Motors Corp. replaced its top leadership yesterday, named an outsider as chairman and cut its stock dividend in half.
But the moves failed to outline the kind of major surgery that analysts say is the company's only real hope for survival.
The changes, which capped weeks of expectations, split the job of former chairman and chief executive Robert C. Stempel between John G. Smale and John F. Smith Jr.
Mr. Smale, former chairman of Procter & Gamble Co.
and the man responsible for popularizing Crest toothpaste, will run the board of directors and keep a sharp eye on management. Mr. Smith, meanwhile, will add chief executive officer to his other titles of president and chief operating officer.
The division of labor is unusual in corporate America, highlighting the enormity of Mr. Smith's task and the board's willingness to drop him if he cannot do what his predecessor failed to do.
Among his immediate tasks will be to stop the corporation's record losses, improve or at least maintain GM's slipping market share, reduce the bureaucracy and start building more cars that people want to buy.
The announcements also served to boost company morale, which had taken a beating after Mr. Smale, who is not an employee of the company, helped press for the resignation of the popular Mr. Stempel last week.
"He [Mr. Smale] will not be an officer of GM, he will not be an employee, and he will not run the company. I
See GM, 4A, Col. 1 GM, from 1A
will," Mr. Smith said in a satellite broadcast to the company's 390,000 North American employees.
The root for this change, the company's poor financial performance, was underscored by the board's decision to cut the common stock dividend in half to 80 cents a share from $1.60. Last year, the company cut the dividend from $3. The new reduction is expected to save the company $500 million a year.
GM's stock closed up $1.125 a share, to $31.875, on the New York Stock Exchange yesterday. It has been rated a "buy" since information was leaked over the past weeks that a new, more vigorous management team would take over.
Meeting in New York yesterday, the board also replaced three of Mr. Stempel's lieutenants with younger men experienced in GM's profitable European operations.
Despite these changes at the top, analysts said the board had failed to take sufficient action to dramatically change the company. Mr. Smith said the company would basically follow streamlining plans outlined months ago that are to make cars more in tune with customers' wants.
The new team said it would also follow the old game plan in sticking to the 21 plant closings announced a year ago. To date, 14 of the 21 have been announced. The remaining seven are to be named this year.
The company is also to follow its plan to cut 74,000 employees by 1994. Mr. Smith said the central bureaucracy had shed 10,000 white-collar jobs this year alone.
"We've cut out one layer of redundant bureaucracy," he said.
GM, which is the largest company and employer in the United States, has a minivan plant in Baltimore that employs 3,000. That plant is not on the list of closures.
Symbolic of the need to turn around the unprofitable North American operations, which lost $7.5 billion last year, was Mr. Smith's decision to keep his main office in the operation's Lansing, Mich., headquarters. Although he would have the chief executive's plush office on the company's fabled 14th floor in Detroit, he said staying in Lansing would help him concentrate on the need to win the North American battle.
Those who study the automobile industry applauded the emphasis on North America.
David Cole, who heads the Office for the Study of Automotive Transportation at the University of Michigan's Transportation Research Institute, said the biggest loss makers are the midsized cars made for the North American market.
"If you could blow up their midsized car operations, they'd be profitable," Mr. Cole said.
For now, however, that is not the plan. None of the major car divisions -- Chevrolet, Pontiac, Buick, Oldsmobile, Cadillac or Saturn -- are to be closed, Mr. Smith emphasized several times yesterday. There had been a rumor that the troubled Oldsmobile division would be merged with Cadillac or Buick.
"We need all the horses that we have in the stable" to make the company profitable again, he said.
WHO'S IN, WHO'S OUT AT GM
JOHN F. SMITH JR.: president and chief operating officer, becomes chief executive officer.
WILLIAM HOGLUND: chief financial officer, is elected to the board of directors.
HARRY PEARCE: general counsel, takes title of chairman of GM Hughes Electronics Corp., with responsibility for the company's other non-automotive subsidiary, Electronic Data Systems Corp.
G. RICHARD WAGONER: managing director of GM Brazil, becomes chief financial officer and executive vice president.
LOUIS HUGHES: president of GM Europe, retains that title and becomes executive vice president of international operations.
ROBERT C. STEMPEL: resigns as chairman and chief executive officer after 27 months in the post.
ROBERT J. SCHULTZ: vice chairman and head of the non-automotive units, resigns.
LLOYD E. REUSS: executive vice president who ran GM's new vehicles and systems division, resigns.
F. ALAN SMITH: executive vice president and the company's top marketing official, resigns after 36 years.