Roger Bonham Smith (July 12, 1925 – November 29, 2007) was the
chairman
The chairperson, also chairman, chairwoman or chair, is the presiding officer of an organized group such as a board, committee, or deliberative assembly. The person holding the office, who is typically elected or appointed by members of the grou ...
and
CEO
A chief executive officer (CEO), also known as a central executive officer (CEO), chief administrator officer (CAO) or just chief executive (CE), is one of a number of corporate executives charged with the management of an organization especially ...
of
General Motors Corporation
The General Motors Company (GM) is an American Multinational corporation, multinational Automotive industry, automotive manufacturing company headquartered in Detroit, Michigan, United States. It is the largest automaker in the United States and ...
from 1981 to 1990, and is widely known as the main subject of
Michael Moore
Michael Francis Moore (born April 23, 1954) is an American filmmaker, author and left-wing activist. His works frequently address the topics of globalization and capitalism.
Moore won the 2002 Academy Award for Best Documentary Feature for ' ...
's 1989 documentary film ''
Roger & Me
''Roger & Me'' is a 1989 American documentary film written, produced, directed by, and starring Michael Moore, in his directorial debut. Moore portrays the regional economic impact of General Motors CEO Roger Smith's action of closing several ...
''.
Smith seemed to be the last of the old-line GM chairmen, a conservative anonymous bureaucrat, resisting change. However, propelled by industry and market conditions, Smith oversaw some of the most fundamental changes in GM's history. When Smith took over GM, it was reeling from its first annual loss since the early 1920s. Its reputation had been tarnished by lawsuits, persistent quality problems, bad labor relations, public protests over the installation of
Chevrolet
Chevrolet ( ), colloquially referred to as Chevy and formally the Chevrolet Motor Division of General Motors Company, is an American automobile division of the American manufacturer General Motors (GM). Louis Chevrolet (1878–1941) and ous ...
engines in
Oldsmobile
Oldsmobile or formally the Oldsmobile Division of General Motors was a brand of American automobiles, produced for most of its existence by General Motors. Originally established as "Olds Motor Vehicle Company" by Ransom E. Olds in 1897, it produ ...
s, and by a poorly designed diesel engine. GM was also losing market share to foreign automakers for the first time.
Deciding that GM needed to completely change its structure in order to be competitive, Smith instituted a sweeping transformation. Initiatives included divisional consolidation, forming strategic joint ventures with Japanese and Korean automakers, launching the Saturn division, investing heavily in technological automation and robotics, and attempting to rid the company of its risk-averse bureaucracy. However, Smith's far-reaching goals proved too ambitious to be implemented effectively in the face of the company's resistant corporate culture. Despite Smith's vision, he was unable to successfully integrate GM's major acquisitions and failed to tackle the root causes of GM's fundamental problems.
A controversial figure widely associated with GM's decline, Smith's tenure is commonly viewed as a failure, as GM's share of the U.S. market fell from 46% to 35% and the company lapsed close to bankruptcy during the
early 1990s recession
The early 1990s recession describes the period of economic downturn affecting much of the Western world in the early 1990s. The impacts of the recession contributed in part to the 1992 U.S. presidential election victory of Bill Clinton over incu ...
Smith spent virtually his entire professional career working for General Motors. He was born in
Columbus, Ohio
Columbus () is the state capital and the most populous city in the U.S. state of Ohio. With a 2020 census population of 905,748, it is the 14th-most populous city in the U.S., the second-most populous city in the Midwest, after Chicago, and t ...
, the son of Besse Belle (Obetz) and E. Quimby Smith. Smith earned his
bachelor's degree
A bachelor's degree (from Middle Latin ''baccalaureus'') or baccalaureate (from Modern Latin ''baccalaureatus'') is an undergraduate academic degree awarded by colleges and universities upon completion of a course of study lasting three to six ...
in business administration at the
University of Michigan
, mottoeng = "Arts, Knowledge, Truth"
, former_names = Catholepistemiad, or University of Michigania (1817–1821)
, budget = $10.3 billion (2021)
, endowment = $17 billion (2021)As o ...
in 1947, and his
MBA
A Master of Business Administration (MBA; also Master's in Business Administration) is a postgraduate degree focused on business administration. The core courses in an MBA program cover various areas of business administration such as accounti ...
at the
University of Michigan
, mottoeng = "Arts, Knowledge, Truth"
, former_names = Catholepistemiad, or University of Michigania (1817–1821)
, budget = $10.3 billion (2021)
, endowment = $17 billion (2021)As o ...
's
Ross School of Business
The Stephen M. Ross School of Business, also known as Michigan Ross, is the business school of the University of Michigan, a public research university in Ann Arbor, Michigan. Founded in 1924, the school is ranked among the best business schools i ...
in 1953. He served in the
United States Navy
The United States Navy (USN) is the maritime service branch of the United States Armed Forces and one of the eight uniformed services of the United States. It is the largest and most powerful navy in the world, with the estimated tonnage ...
from 1944 to 1946.
Smith began his career at GM in 1949 as an accounting clerk, and had become the company's treasurer by 1970, and vice president the following year. In 1974, Smith was elected executive vice president in charge of the financial, public relations, and government relations staffs. He ascended to GM's chairmanship in 1981.
Poletown plant controversy
In 1981, mayor
Coleman Young
Coleman Alexander Young (May 24, 1918 – November 29, 1997) was an American politician who served as mayor of Detroit, Michigan, from 1974 to 1994. Young was the first African-American mayor of Detroit.
Young had emerged from the far-left ele ...
and the city of
Detroit
Detroit ( , ; , ) is the largest city in the U.S. state of Michigan. It is also the largest U.S. city on the United States–Canada border, and the seat of government of Wayne County. The City of Detroit had a population of 639,111 at th ...
won a notorious
landmark decision
Landmark court decisions, in present-day common law legal systems, establish precedents that determine a significant new legal principle or concept, or otherwise substantially affect the interpretation of existing law. "Leading case" is commonly u ...
in the
Michigan Supreme Court
The Michigan Supreme Court is the highest court in the U.S. state of Michigan. It is Michigan's court of last resort and consists of seven justices. The Court is located in the Michigan Hall of Justice at 925 Ottawa Street in Lansing, the state ...
, ''
Poletown
Poletown East is a neighborhood area of Detroit, Michigan, bordering the enclave city of Hamtramck. The area was named after the Polish immigrants who originally lived in the area. A portion of residential area known as Poletown became the General ...
Neighborhood Council v. City of Detroit'' that allowed the city to use its eminent domain power to raze an existing immigrant neighborhood in neighboring
Hamtramck
Hamtramck ( ) is a city in Wayne County, Michigan, Wayne County in the U.S. state of Michigan. As of the United States 2020 Census, 2020 census, the city population was 28,433. Hamtramck is surrounded by the city of Detroit except for a small po ...
. In order to transfer the land to GM for the construction of a new factory, the city condemned the homes of 4,200 residents as well as numerous churches, schools, and businesses, including the original
Dodge
Dodge is an American brand of automobiles and a division of Stellantis, based in Auburn Hills, Michigan. Dodge vehicles have historically included performance cars, and for much of its existence Dodge was Chrysler's mid-priced brand above P ...
assembly plant opened in 1914 by John and Horace Dodge for their then new 1915 Dodge Brothers car ("Dodge Main").
Although the deal predated Smith's tenure as chairman, he subsequently used the construction of the new Poletown factory, along with plants on a greenfield site in
Lake Orion
Lake Orion ( ) is a village in the northern outskirts of Metro Detroit in Oakland County, Michigan, United States. The population was 2,973 at the 2010 census. "Lake Orion" can refer to either the village or the much larger Orion Township, of w ...
Michigan, and one in
Wentzville, Missouri
Wentzville is an exurb of St. Louis that is located in western St. Charles County, Missouri, United States. As of the 2020 census, the city had a total population of 44,372, making it the 15th largest city in Missouri. Wentzville has been the f ...
(an identical twin to Orion) to showcase the technology he felt would lead GM into a new era. Unfortunately, the factories failed to live up to their promise and since they were duplicates of existing GM factories, unable to flexibly produce different models, were ultimately panned by critics as obsolete on the day they opened.Robert A.G. Monks, Nell Minow, ''Corporate Governance, 4th Edition'' (John Wiley & Sons, 200 "GM Corporate Governance Case Study"
Reorganizing General Motors
Smith began the reorganization of GM that would define his chairmanship (see below), with the 1981 creation of the worldwide Truck and Bus Group, consolidating the design, manufacture, sales and service of all trucks, buses and vans under one umbrella. 1982 saw the creation of the Truck and Bus Manufacturing Division, which combined all truck manufacturing and assembly operations from their former divisions, but still a separate bureaucracy from that of the Truck and Bus Group.
In 1982 Smith negotiated contract concessions with the
United Auto Workers
The International Union, United Automobile, Aerospace, and Agricultural Implement Workers of America, better known as the United Auto Workers (UAW), is an American labor union that represents workers in the United States (including Puerto Rico ...
and cut planned raises for white-collar workers. After unveiling a more generous bonus program for top executives that provoked an angry response from the union, Smith was forced to back-pedal. Relations with the UAW, management, and stockholders remained strained. Profits improved in 1983 and Smith began unveiling his vision for reorganization, diversification, and "deindustrialization."Richard A. Wright
One of the most controversial decisions made during Smith's tenure was the partial elimination of divisional autonomy in 1984. In the 1920s, chairman and CEO Alfred Sloan, Jr. had established semi-autonomous divisions within the corporation, each designing and marketing their own vehicles (
Chevrolet
Chevrolet ( ), colloquially referred to as Chevy and formally the Chevrolet Motor Division of General Motors Company, is an American automobile division of the American manufacturer General Motors (GM). Louis Chevrolet (1878–1941) and ous ...
,
Pontiac Pontiac may refer to:
*Pontiac (automobile), a car brand
*Pontiac (Ottawa leader) ( – 1769), a Native American war chief
Places and jurisdictions Canada
* Pontiac, Quebec, a municipality
**Apostolic Vicariate of Pontiac, now the Roman Catholic D ...
,
Oldsmobile
Oldsmobile or formally the Oldsmobile Division of General Motors was a brand of American automobiles, produced for most of its existence by General Motors. Originally established as "Olds Motor Vehicle Company" by Ransom E. Olds in 1897, it produ ...
,
Buick
Buick () is a division of the American automobile manufacturer General Motors (GM). Started by automotive pioneer David Dunbar Buick in 1899, it was among the first American marques of automobiles, and was the company that established General ...
and
Cadillac
The Cadillac Motor Car Division () is a division of the American automobile manufacturer General Motors (GM) that designs and builds luxury vehicles. Its major markets are the United States, Canada, and China. Cadillac models are distributed i ...
). This was considered a crucial factor propelling GM past market leader
Ford
Ford commonly refers to:
* Ford Motor Company, an automobile manufacturer founded by Henry Ford
* Ford (crossing), a shallow crossing on a river
Ford may also refer to:
Ford Motor Company
* Henry Ford, founder of the Ford Motor Company
* Ford F ...
in the 1930s. By the 1980s however, that autonomy (also including
Fisher Body
Fisher Body was an automobile coachbuilder founded by the Fisher brothers in 1908 in Detroit, Michigan. A division of General Motors for many years, in 1984 it was dissolved to form other General Motors divisions. Fisher & Company (originally Allo ...
division producing the car bodies, and GM Assembly division building them) were seen as representing a dated business model that had led to needless large scale redundancy, infighting by the divisions, and a bloated internal bureaucracy.Alex Taylor III, Andrew Erdman, Justin Martin, and Tricia Welsh "U.S. Cars Come Back" ''Fortune'', November 16, 1992
1984 reorganization
Smith took on the massive GM bureaucracy with disastrous results. A sea change in how GM would market and build cars in the future, the 1984 reorganization was intended to streamline the process and create greater efficiencies; the reverse actually occurred. Combining the nameplate divisions,
Fisher Body
Fisher Body was an automobile coachbuilder founded by the Fisher brothers in 1908 in Detroit, Michigan. A division of General Motors for many years, in 1984 it was dissolved to form other General Motors divisions. Fisher & Company (originally Allo ...
, and GM Assembly into two groups, C-P-C (
Chevrolet
Chevrolet ( ), colloquially referred to as Chevy and formally the Chevrolet Motor Division of General Motors Company, is an American automobile division of the American manufacturer General Motors (GM). Louis Chevrolet (1878–1941) and ous ...
,
Pontiac Pontiac may refer to:
*Pontiac (automobile), a car brand
*Pontiac (Ottawa leader) ( – 1769), a Native American war chief
Places and jurisdictions Canada
* Pontiac, Quebec, a municipality
**Apostolic Vicariate of Pontiac, now the Roman Catholic D ...
,
Canada
Canada is a country in North America. Its ten provinces and three territories extend from the Atlantic Ocean to the Pacific Ocean and northward into the Arctic Ocean, covering over , making it the world's second-largest country by tot ...
) to build small cars and B-O-C (
Buick
Buick () is a division of the American automobile manufacturer General Motors (GM). Started by automotive pioneer David Dunbar Buick in 1899, it was among the first American marques of automobiles, and was the company that established General ...
,
Oldsmobile
Oldsmobile or formally the Oldsmobile Division of General Motors was a brand of American automobiles, produced for most of its existence by General Motors. Originally established as "Olds Motor Vehicle Company" by Ransom E. Olds in 1897, it produ ...
,
Cadillac
The Cadillac Motor Car Division () is a division of the American automobile manufacturer General Motors (GM) that designs and builds luxury vehicles. Its major markets are the United States, Canada, and China. Cadillac models are distributed i ...
) to build large cars, the effort was subsequently criticized for creating chaos within the company. Longstanding informal relationships that greased the wheels of GM were severed, seemingly overnight, leading to confusion and slipping new product programs. The reorganization virtually stopped GM in its tracks for 18 months, and never really worked as intended, with the CPC division building
Cadillac
The Cadillac Motor Car Division () is a division of the American automobile manufacturer General Motors (GM) that designs and builds luxury vehicles. Its major markets are the United States, Canada, and China. Cadillac models are distributed i ...
s and BOC building
Pontiac Pontiac may refer to:
*Pontiac (automobile), a car brand
*Pontiac (Ottawa leader) ( – 1769), a Native American war chief
Places and jurisdictions Canada
* Pontiac, Quebec, a municipality
**Apostolic Vicariate of Pontiac, now the Roman Catholic D ...
s. The reorganization added costs and created more layers of bureaucracy when the new groups added management, marketing and engineering staff, duplicating existing staff at both the corporate and division levels. Almost ten years elapsed before the 1984 reorganization was unwound and all car groups were combined into one division.
By the 1990s, GM's program of sharing components across divisions that began in the 70s as a way to cut costs grew into a marketing problem. After the 1984 reorganization forced teamwork by the divisions, parts sharing evolved into wholesale sharing of entire designs and simply re-badging vehicles for each division. Observers suggested that differences between automobiles produced and marketed by the
Chevy
Chevrolet ( ), colloquially referred to as Chevy and formally the Chevrolet Motor Division of General Motors Company, is an American automobile division of the American manufacturer General Motors (GM). Louis Chevrolet (1878–1941) and oust ...
,
Buick
Buick () is a division of the American automobile manufacturer General Motors (GM). Started by automotive pioneer David Dunbar Buick in 1899, it was among the first American marques of automobiles, and was the company that established General ...
, and
Oldsmobile
Oldsmobile or formally the Oldsmobile Division of General Motors was a brand of American automobiles, produced for most of its existence by General Motors. Originally established as "Olds Motor Vehicle Company" by Ransom E. Olds in 1897, it produ ...
divisions were less distinct as a consequence. Automotive commentators cited a lack of a distinct brand identity and demographic changes as crucial factors in the demise of the
Oldsmobile
Oldsmobile or formally the Oldsmobile Division of General Motors was a brand of American automobiles, produced for most of its existence by General Motors. Originally established as "Olds Motor Vehicle Company" by Ransom E. Olds in 1897, it produ ...
division in 2004. Compounding GM's problems was the fact that while entire platforms shared designs, the engineered parts beneath the surface, where customers didn't care or didn't notice were often not shared, which is where money could be saved. Analyst David Cole summed it up: ''"The engineering was 180 degrees out of phase. GM cars looked alike outside but were all different inside."''
GM10 debacle
Smith's major new car program prior to the 1984 reorganization, GM10 (also known as W-body), has been called "The biggest catastrophe in American industrial history." Beginning in 1982, and costing $7 billion, the plan was to replace all midsize cars produced by
Chevrolet
Chevrolet ( ), colloquially referred to as Chevy and formally the Chevrolet Motor Division of General Motors Company, is an American automobile division of the American manufacturer General Motors (GM). Louis Chevrolet (1878–1941) and ous ...
,
Pontiac Pontiac may refer to:
*Pontiac (automobile), a car brand
*Pontiac (Ottawa leader) ( – 1769), a Native American war chief
Places and jurisdictions Canada
* Pontiac, Quebec, a municipality
**Apostolic Vicariate of Pontiac, now the Roman Catholic D ...
,
Oldsmobile
Oldsmobile or formally the Oldsmobile Division of General Motors was a brand of American automobiles, produced for most of its existence by General Motors. Originally established as "Olds Motor Vehicle Company" by Ransom E. Olds in 1897, it produ ...
, and
Buick
Buick () is a division of the American automobile manufacturer General Motors (GM). Started by automotive pioneer David Dunbar Buick in 1899, it was among the first American marques of automobiles, and was the company that established General ...
. The plan was huge in scope, calling for seven plants that would each assemble 250,000 of the cars, or 21% of the total U.S. car market. It was badly executed from the start, but the 1984 reorganization wrought havoc on the program and it never recovered. By 1989, the year before the last of the original GM10s were launched, GM was losing $2000 on every one of the cars it produced. When asked by ''
Fortune
Fortune may refer to:
General
* Fortuna or Fortune, the Roman goddess of luck
* Luck
* Wealth
* Fortune, a prediction made in fortune-telling
* Fortune, in a fortune cookie
Arts and entertainment Film and television
* ''The Fortune'' (1931 film) ...
'' why GM10 was such a catastrophe, Smith replied, “''I don't know. It's a mysterious thing. I've said I'll take my share of the blame on all those things. I was part of the team.''” Nonetheless, the W-body platform that sprouted from the GM10 program lasted in production in some form until 2016.
Drive for modernization
A defining theme of Smith's tenure was his vision to modernize GM using advanced technology. Some have suggested he was ahead of his time in attempting to create a 21st-century organization in a company not ready for the technology. "Lights out" factories were envisioned, where the only employees were those supervising the robots and computers. This was obviously viewed negatively by the unions, and further strained relations. Over the decade of the 1980s, GM spent upwards of $90 billion attempting to remake itself,By Alex Taylor III, Alicia Hills Moore and Wilton Woods "Can GM Remodel Itself?..." ''Fortune'', January 13, 1992 including a 1981 joint venture with the Japanese robot manufacturer, Fujitsu-Fanuc. With the resulting venture, GMF Robotics, GM became the largest manufacturer of robots in the world. Unfortunately, the experience failed to meet the vision, with the new robots famously painting each other instead of the cars, or robots welding doors shut.Steven Parissien, ''The Life of the Automobile: The Complete History of the Motor Car'' (Macmillen, May 13, 201 (Google Book Search image) /ref> Ultimately, some robotic systems and automation installed in several plants were removed shortly after their installation. The astonishing sums expended were widely viewed as money wasted.Lowell Turner, ''Democracy at Work: Changing World Markets and the Future of Labor Unions'' (New York: Cornell University Press, 199 (Google Book Search image) /ref> Responding to a 1986 report on 3-year capital expenditures projected at almost $35 billion, VP of finance F. Alan Smith (no relation) opined that the sum could be spent on purchasing both
Toyota
is a Japanese multinational automotive manufacturer headquartered in Toyota City, Aichi, Japan. It was founded by Kiichiro Toyoda and incorporated on . Toyota is one of the largest automobile manufacturers in the world, producing about 10 ...
and
Nissan
, trade name, trading as Nissan Motor Corporation and often shortened to Nissan, is a Japanese multinational corporation, multinational Automotive industry, automobile manufacturer headquartered in Nishi-ku, Yokohama, Japan. The company sells ...
resulting in a bump in market share overnight and openly questioned whether the proposed capital expenditures would pay the same dividends; they did not. By the time Smith retired, GM had evolved from the lowest cost producer in
Detroit
Detroit ( , ; , ) is the largest city in the U.S. state of Michigan. It is also the largest U.S. city on the United States–Canada border, and the seat of government of Wayne County. The City of Detroit had a population of 639,111 at th ...
to its highest cost producer, due in part to the drive to acquire advanced technology that never paid dividends in efficiency.Alex Taylor III, ''Sixty to Zero, An Inside Look at the Collapse of General Motors'' (Yale University Press, 201 (Google Book Search image) /ref>
Acquisitions and divestitures
In 1984 Smith oversaw General Motors' acquisition of
Electronic Data Systems
Electronic all cash BSN acc: 1311729000110205 Data Systems (EDS) was an American multinational information technology equipment and services company headquartered in Plano, Texas which was founded in 1962 by Ross Perot. The company was a subs ...
from its founder
Ross Perot
Henry Ross Perot (; June 27, 1930 – July 9, 2019) was an American business magnate, billionaire, politician and philanthropist. He was the founder and chief executive officer of Electronic Data Systems and Perot Systems. He ran an inde ...
for $2.55 billion, serving two purposes. First was the opportunity to modernize and automate GM to fulfill Smith's goals; second, it was an effort to broaden out of its manufacturing base and into technology and services. As a result of the EDS acquisition, Perot became GM's largest single shareholder, joined its board of directors, and immediately became a source of friction to Smith and a vocal and public critic of Smith and GM's management. In 1986 Smith and the board orchestrated a $743 million buyout of Perot's GM stock at a substantial premium over the market value of the shares. Perot accepted the buyout, but publicly denounced the expenditure as outrageous at a time GM was closing plants and laying off workers. He announced that he would put the money in escrow to give the automaker a chance to reconsider, but never actually sequestered the funds.
This merger is described in detail in the book ''Call Me Roger'' by Albert Lee, a former GM speechwriter, 1988, . The structure of the deal was unusual in that EDS would be owned by GM, but Smith promised it would allow Perot autonomy to run the company. In addition, the stock of EDS became a special 'Class E' GM stock, which was separate from normal GM stock, an arrangement which almost got GM kicked off the
NYSE
The New York Stock Exchange (NYSE, nicknamed "The Big Board") is an American stock exchange in the Financial District, Manhattan, Financial District of Lower Manhattan in New York City. It is by far the List of stock exchanges, world's largest s ...
. Perot eventually agreed to the deal, because, as Lee puts it, he was sold on the idea of saving millions of American jobs by helping GM fight off Japanese competition.Albert Lee, ''Call Me Roger'' (Contemporary Books, 1988)
The relationship between Smith, Perot, and the EDS executives ruptured openly in September 1985, during a meeting in Dallas that brought the EDS executive compensation issue to a head. Smith was reluctant to accept the EDS plan, substituting a plan of his own. Described in ''Irreconcilable Differences'' by Doron Levin, EDS' CFO was explaining to Smith how they felt GM's plan was inferior, when Smith lost his temper. "''People in the room later would remember Smith's angry explosion as being wondrous and terrifying at the same time: wondrous for the extreme colors and sounds it brought to the room, terrifying because none of them had ever seen someone lose his temper so completely in a business meeting. The EDS officers stared in disbelief as the chairman of the world's biggest and most powerful company lost it.''"Doron P. Levin, ''Irreconcilable Differences: Ross Perot Versus General Motors'' (New York: Plume, 1990)
What ensued was one of the most vitriolic corporate battles of the 1980s, with Perot and Smith publicly exchanging barbs using the media, which delightedly splashed the story over every business publication in the U.S.. Perot notoriously lashed out at Smith in a 1988 exclusive to Fortune Magazine, saying: "''My question is: Why haven't we unleashed their potential? The answer is: the General Motors system. It's like a blanket of fog that keeps these people from doing what they know needs to be done. I come from an environment where, if you see a snake, you kill it. At GM, if you see a snake, the first thing you do is go hire a consultant on snakes. Then you get a committee on snakes, and then you discuss it for a couple of years. The most likely course of action is—nothing. You figure, the snake hasn't bitten anybody yet, so you just let him crawl around on the factory floor. We need to build an environment where the first guy who sees the snake kills it''."Thomas Moore ''The GM System is Like a Blanket of Fog'' ''Fortune'', February 15, 1988 Perot went on to needle Smith regarding the opulent 25th floor GM offices in New York, "''An entire teak forest must have been decimated for that floor''". Smith, who had obviously ignored the irony of the CEO of the largest public corporation in the world complaining about the opulence of the private office (which Perot had personally paid to furnish) of a rival, had responded to Perot's frequent criticism of GM's executive perks a year earlier, "''Perot's office (in Dallas) 'makes mine look like a shanty-town. He has Remingtons; he has a Gilbert Stuart painting hanging on the wall. Nobody runs around saying 'Get rid of Ross's office'".Janice Castro ''Time'', January 15, 1987 (Misdated 1/26/07 in web archive)
A second large acquisition outside of the automobile industry followed in 1985, when Smith announced the purchase of
Hughes Aircraft Company
The Hughes Aircraft Company was a major American aerospace and defense contractor founded on February 14, 1934 by Howard Hughes in Glendale, California, as a division of Hughes Tool Company. The company was known for producing, among other produ ...
from the Howard Hughes Medical Institute for $5.2 billion. The company was merged with GM's
Delco Electronics
Delco Electronics Corporation was the automotive electronics design and manufacturing subsidiary of General Motors based in Kokomo, Indiana, that manufactured ''Delco'' Automobile radios and other electric products found in GM cars. In 1972, Gene ...
to form
Hughes Electronics
Hughes Electronics Corporation was formed in 1985 when Hughes Aircraft was sold by the Howard Hughes Medical Institute to General Motors for $5.2 billion. The surviving parts of Hughes Electronics are today known as The DirecTV Group.
On June 5 ...
.
Smith's purchases of EDS and Hughes were criticized as unwise diversions of resources at a time when GM could have invested more in its core automotive divisions. GM spun EDS off as an independent company in 1996. After some major acquisitions in the mid-1990s by Hughes Electronics (
Magnavox
Magnavox (Latin for "great voice", stylized as MAGNAVOX) is an American electronics company that since 1974 has been a subsidiary of the Dutch electronics corporation Philips.
The predecessor to Magnavox was founded in 1911 by Edwin Pridham and ...
Electronic Systems and
PanAmSat
The former PanAmSat Corporation founded in 1984 by Reynold (Rene) Anselmo, was a satellite service provider headquartered in Greenwich, Connecticut, United States. It operated a fleet of communications satellites used by the entertainment ind ...
), GM divested most of Hughes assets from 1997 to 2003, including sale of defense operations to
Raytheon
Raytheon Technologies Corporation is an American multinational aerospace and defense conglomerate headquartered in Arlington, Virginia. It is one of the largest aerospace and defense manufacturers in the world by revenue and market capitaliza ...
in 1997, the spinoff of
Delphi Automotive Systems
Aptiv PLC is an Irish-American automotive technology supplier with headquarters in Dublin. Aptiv grew out of the now-defunct American company, Delphi Automotive Systems, which itself was formerly a component of General Motors.
History
The com ...
in 1999, the divestiture of Hughes Space and Communications to
Boeing
The Boeing Company () is an American multinational corporation that designs, manufactures, and sells airplanes, rotorcraft, rockets, satellites, telecommunications equipment, and missiles worldwide. The company also provides leasing and product ...
in 2000, and acquisition of the remaining communications and satellite operations (mostly
DirecTV
DirecTV (trademarked as DIRECTV) is an American multichannel video programming distributor based in El Segundo, California. Originally launched on June 17, 1994, its primary service is a digital satellite service serving the United States. It ...
) by
NewsCorp
News Corporation (abbreviated News Corp.), also variously known as News Corporation Limited, was an American multinational mass media corporation controlled by media mogul Rupert Murdoch and headquartered at 1211 Avenue of the Americas in New ...
in 2003.
Solar Challenge
In 1987, Smith chose to have GM enter in the first
World Solar Challenge
The World Solar Challenge (WSC), since 2013 named Bridgestone World Solar Challenge, is an international event for solar powered cars driving 3000 kilometres through the Australian outback.
With the exception of a four-year gap between ...
race and he hired AeroVironment to build a winning solar-electric vehicle. The resulting car, the
Sunraycer The Sunraycer was a solar-powered race car designed to compete in the World Solar Challenge, the world's first race featuring solar-powered cars. The Sunraycer was a joint collaboration between General Motors, AeroVironment, and Hughes Aircraft.
...
easily won the race at a cost of just under 2 million dollars. The success of the Sunraycer led directly to the AeroVironment-designed GM Impact
prototype
A prototype is an early sample, model, or release of a product built to test a concept or process. It is a term used in a variety of contexts, including semantics, design, electronics, and Software prototyping, software programming. A prototyp ...
, subsequently planned for 25,000 vehicles, which in turn led to the EV-1.The EV-1 Timeline /ref>
Legacy
In 2009,
Portfolio.com
Portfolio.com was a website published by American City Business Journals that provideed news and information for small to mid-sized businesses (SMB). It was previously the website for the monthly business magazine ''Condé Nast Portfolio'', pub ...
called Smith one of the worst American CEOs of All Time," stating, "Smith...had the right idea but may have lacked the intuition to understand how his rip-up-the-carpet redo would affect the delicate web of informal communication that GM relied upon." In 2013, he was included on ''
Fortune
Fortune may refer to:
General
* Fortuna or Fortune, the Roman goddess of luck
* Luck
* Wealth
* Fortune, a prediction made in fortune-telling
* Fortune, in a fortune cookie
Arts and entertainment Film and television
* ''The Fortune'' (1931 film) ...
''s list of the "10 Worst Auto Chiefs," with writer Alex Taylor III stating, "He wasted billions trying to revive the sagging giant through diversification ( EDS and
Hughes
Hughes may refer to:
People
* Hughes (surname)
* Hughes (given name)
Places Antarctica
* Hughes Range (Antarctica), Ross Dependency
* Mount Hughes, Oates Land
* Hughes Basin, Oates Land
* Hughes Bay, Graham Land
* Hughes Bluff, Victoria La ...
), automation (robotized factories), reorganization (two superdivisions B-O-C and C-P-C), commonization ( GM-10 cars) and experimentation (
Saturn
Saturn is the sixth planet from the Sun and the second-largest in the Solar System, after Jupiter. It is a gas giant with an average radius of about nine and a half times that of Earth. It has only one-eighth the average density of Earth; h ...
). Smith's legacy was a fleet of lookalike autos, an unqualified successor, and a mountain of debt that pushed the company close to bankruptcy in 1992."
Personal life
Smith served as chairman of
The Business Council
The Business Council is an organization of business leaders headquartered in Washington, D.C. His tenure at GM ended in 1990, one year after the release of the popular underground documentary ''
Roger & Me
''Roger & Me'' is a 1989 American documentary film written, produced, directed by, and starring Michael Moore, in his directorial debut. Moore portrays the regional economic impact of General Motors CEO Roger Smith's action of closing several ...
'', where many displaced GM workers called for Smith's retirement. Smith voluntarily retired from GM, and later toured the new Saturn facility in Tennessee, which he brought to fruition, in 1991.
A native of Columbus, Ohio, Smith was married for 53 years to his wife Barbara. They had two sons, Roger B. Smith and Drew J. Smith; two daughters, Jennifer A. Ponski and Victoria B. Sawula; as well as six grandchildren.
Smith died on November 29, 2007, after an unspecified short illness.
References
Further reading
* David Halberstam, ''The Reckoning'' (New York: William Morrow & Co., 1986)
* Paul Ingrassia and Joseph B. White, ''Comeback: The Fall & Rise of the American Automobile Industry'' (New York: Simon & Schuster, 1995)
* Paul A. Witteman ''Roger's Painful Legacy'' ''Time'', November 9, 1992
* Alex Taylor III ''Fortune'', April 5, 2004; ''For an analysis of the 1984 reorganization, and past/present turnaround efforts''
* Jon Lowell, David C. Smith ''GM10; history's biggest car program'', ''Ward's Auto World'', March, 1986; ''For a contemporaneous optimistic view of GM10''
* Paul Ingrassia ''How Detroit Drove Into a Ditch'' ''Wall Street Journal'', October 25, 2008
''Final Offer (Documentary)'' – ''National Film Board of Canada'', 1985 – Featuring Roger Smith in his Union negotians of 1984.
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