Life after GM
The top brass of General Motors were happily bound for Ohio today, to the newly revived automaker’s transmission plant in Toledo.
They are announcing the creation of four thousand new jobs, there and elsewhere. What was once the world’s biggest corporation is once again hugely profitable -- less than two years after bankruptcy and near-corporate death.
GM made $3.2 billion dollars in the first three months of this year. That success was fueled, Detroit News columnist Daniel Howes wrote, “by lightened legacy obligations, revised union contracts, fewer employees -- and a rekindled competitive spark.”
Wall Street and Detroit are something close to ecstatic over the new GM, and it is easy to see why. Yet I have nagging doubts about this picture, a sense that we’ve seen this all before.
And that’s because we have.
There’s a man I had wanted to talk to about all this, but now I never will. Even as GM got ready for today’s celebration, it made another more sobering announcement yesterday. Bob Stempel died three days ago in Florida, at the age of seventy-seven.
Stempel had once been at the pinnacle of automotive royalty. Twenty years ago, he was chairman and CEO of GM, back when the General was still the largest company in the world. These days, however, he was so much out of the public eye that his death went unnoticed until it was revealed by the company to which he had dedicated his life, until it shocked the world by firing him.
Two years ago, when General Motors was spiraling into bankruptcy, and President Obama forced the firing of then-General Motors Chair Rick Wagoner, I realized we’d been here before.
Flash back nineteen years. Bob Stempel had been immensely popular when he became GM‘s chairman two years before. He was an engineer, a car guy, not a bean counter like his predecessor, Roger Smith. But if he was the right man, he arrived at the wrong time. The nation fell into a recession and clumsy, hidebound GM went into a tailspin, losing a record seven billion dollars in 1991.
The usually complacent board of directors panicked. They demanded fast changes. But that wasn’t Stempel’s style. He had a hard time making drastic changes, and a harder time firing executives he’d spent his life working with.
Eventually, he was ousted, and replaced by a team led by former Proctor and Gamble CEO John Smale. Three years later, Smale stepped down to universal applause. The problems were fixed, General Motors was reformed, and making billions again, thanks to vision and strategy.
Then, somehow, it all fell apart again. Not for Stempel, however. Nor did he brood and sulk. He joined the visionary inventor Stan Ovshinsky, and helped make his firm profitable.
A few years ago, in their offices, Bob Stempel told me he was happier and more fulfilled than he had ever been before. But he was not willing to talk about GM. You have to wonder what he thought, though, when the second collapse came, and what the now happily retired Smale thinks of GM’s revived success.
But what’s more important is what GM’s current management thinks. Let’s hope, as they pay their final respects to Bob Stempel, they don’t think that this could never happen to them.