WILMINGTON, Del. - John F. Smith Jr., the chairman of General Motors Corp. said yesterday that a previously announced expansion of the company's Allison Transmission plant in White Marsh is on indefinite hold.
Smith also used the company's annual meeting here to announce that he will retire in April after 42 years with the company. The end of his career is in line with a company policy that executives step down after reaching the age of 65.
The board is expected to name a successor by the end of the first quarter of next year. The early speculation is that Smith will be succeeded by G. Richard Wagoner Jr., president and chief executive.
During a session with reporters after the stockholders meeting, Smith said Allison's anticipated truck transmission business outside of GM "did not materialize."
As a result, he said, production will continue at its current rate.
Wagoner repeated the company's previous statements that the Baltimore van assembly plant faces an uncertain future beyond the third quarter of next. Beyond that date, the company says, market demand for the Chevrolet Astro and GMC Safari vans made at the plant will determine its future.
GM invested $202 million to build the Allison truck transmission plant, and taxpayers contributed $10 million to the project in grants, loans, tax breaks and road improvements.
The plant's 400 workers make automatic transmissions used in a variety of commercial trucks, including step vans such as those used by United Parcel Service Inc.
The planned expansion would have doubled the plant's size and brought employment to about 800. The bulk of the workers were to have been transferred from the van assembly plant.
Smith, who guided GM through a difficult period, said during a news conference after the meeting, "A large portion of my career has been downsizing, reshaping the company in the face of the market competition.
"It's nice to see where we are today in the U.S., where we've reached a competitive level of quality."
When J.D. Power & Associates released its annual automotive quality survey last week, it ranked GM third, behind Toyota and Honda. It noted that GM and Toyota have shown the biggest gains in quality over the past five years.
Smith said he plans to return to Massachusetts to help his son run his upscale grocery business. "Maybe I'll be a bagger," he said.
During the meeting, Wagoner said GM management was "disappointed, overall, with our 2001 results." He said the $177 billion in revenues and earnings of $2.23 a share "were well below our targets and well below our expectations."
"We're improving our fundamentals, like quality and productivity, while moving with a renewed sense of urgency in everything we do," he said."
He said the company boosted its estimate of second-quarter earnings by 50 cents to $2.50 a share.
GM shares fell $1.80 to $59.45 yesterday.