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Executive led General Motors during record slump in the '80s
Roger B. Smith, the General Motors executive who led the world's largest automaker from record profits to record losses in the 1980s and was vilified in the documentary "Roger & Me," died near Detroit on Thursday. He was 82.
The former chairman and chief executive died of an unspecified illness, according to General Motors.
He was named to those positions on Jan. 1, 1981, and stayed on for 9 1/2 years. In that time, GM saw its share of the American car business tumble as Japanese automobiles grabbed an ever-larger piece of the market.
A business-school graduate who rose through the company ranks over more than 40 years, Smith was known as a strong-headed and at times arrogant leader who did not delegate well, preferring to maintain a tight grip on the company. Still, he was regarded as an innovator, responsible for many radical -- and sometimes deeply flawed -- attempts to remake GM in what were extremely difficult times for all American automakers.
"He didn't have a team. He was more of a king," said David Cole, chairman of the Center for Automotive Research in Ann Arbor, Mich. "But he was the boldest executive that you could find anywhere."
Under Smith's leadership, GM was completely reorganized. It opened a first-of-its-kind joint venture to build cars with Toyota in Fremont, Calif.; purchased Electronic Data Systems from H. Ross Perot as well as Hughes Aircraft Corp.; and introduced the Saturn line of cars.
But in the popular imagination, his most lasting legacy may be on celluloid. "Roger & Me" described how layoffs at a GM plant devastated the town of Flint, Mich. Smith refused to be interviewed on camera despite repeated requests by filmmaker Michael Moore. That 1989 film, along with numerous public relations gaffes during his tenure, cemented Smith's reputation for ill-timed miscues, such as announcing executive bonuses on the eve of signing a contract that forced large concessions from the United Auto Workers union.
Moore could not be reached for comment, although a picture of Smith along with information on charitable donations to honor his passing was posted on Moore's website Friday.
Roger Bonham Smith was born in Columbus, Ohio, on July 12, 1925, but at an early age his family moved to Detroit. There, according to University of Michigan business historian David Lewis, Smith's father worked at an auto parts manufacturer, and the young Smith developed an affinity for cars, working on them in his high school auto shop.
Smith served in the Navy from 1944 to 1946. He earned a bachelor's degree at the University of Michigan in 1947 and a master's in business at the school in 1953. He started working at GM in 1949 as an accountant, steadily climbing the ladder and developing great admiration for former GM chairmen Alfred P. Sloan Jr. and Frederic G. Donner.
"He modeled himself after Donner and Sloan. He took GM and himself very seriously," said Lewis, himself a former GM employee, who recalls seeing Smith at an airport in 1960 with a briefcase full of company documents handcuffed to his wrist. "To get to the top at GM, you needed drive and ability, and he had both."
By 1970, Smith had been named GM treasurer, and he rose to vice president in 1971. He was elected chairman and chief executive in 1980, beginning on the first day of the following year. Among his innovations was bringing front-wheel drive, which was proving extremely popular in Japanese and European imports, to GM. Yet his years atop the company were plagued by the new rivalry that pitted GM against Japan rather than Ford and Chrysler, and utterly changed the dynamic of the industry. Asked what his solution to low-cost imports was, Smith famously suggested buying a used Buick.
Americans chose Toyotas and Hondas instead. When Smith took over, GM held 43.5% of the U.S. market; by the time he left, that had slipped to 35.4%. But when challenged about the slipping market share, he defended the bottom line: "You don't pay dividends on market share."
Critics say Smith's greatest flaw was overemphasizing that bottom-line mentality rather than working on improving product quality.
"He was a bean counter," says Owen Bieber, who was president of the United Auto Workers during much of Smith's tenure. "Suddenly, GM started making a lot of cars that looked alike. I used to tell him that you can't have a Cadillac that looks like a Chevrolet and expect to sell them both."
Smith admitted that many of the most fondly remembered GM cars of the '80s, including the $60,000 Corvette ZR-1, were pushed by others within the company. He is most often associated with the demise of the innovative Pontiac Fiero, which was beloved by many car enthusiasts but was killed on his watch.
In an attempt to buck its reputation for bland, carbon-copy cars, GM in 1985 launched the Saturn brand, a bold move that made huge waves in the car industry but did not prove financially successful for years.
Outside of cars, Smith's most ambitious work might have come on the company's financial side. Early on, he negotiated significant concessions from the auto workers union, a first for the industry. But perhaps his most grandiose plan involved the acquisition of Electronic Data Systems in 1984. The idea was to modernize car manufacturing, reducing the role of line workers in favor of automation, in tandem with his reorganization of GM along new lines.
"He was a leader who knew that we have to accept change, understand change and learn to make it work for us," Rick Wagoner, the automaker's current chief executive, said in a statement. "Roger was truly a pioneer in the fast-moving global industry that we now take for granted."
But because of differences in corporate culture, the merger with Electronic Data Systems proved disastrous, and in 1986, Smith fired its chairman, Perot. Similarly, his effort to reorganize the company into manufacturing divisions rather than by nameplate groups was a failure. The project proved extremely expensive and ultimately was scrapped.
Moore's film, portraying the director's fruitless attempts to get face time with Smith, debuted in 1989, and the already-maligned chairman became the butt of national jokes about the ailing automobile industry. Defenders of Smith, however, point out that he did grant an interview to Moore, although it was before filming commenced. "He was not a master of communications," said Cole, of the Center for Automotive Research. "That was not his strong suit."
On July 31, 1990, Smith resigned from his executive posts at GM but stayed on as a member of the board for nearly three more years, during which time the company, suffering continuing problems, pushed out his successor, Robert Stempel, and purged the board of company managers. By the time Smith resigned from the board in April 1993, only two of 14 board members worked at GM.
Unlike other former chiefs of Big Three automakers, Smith kept a low profile upon leaving the company. An avid sportsman, he was a member of the Turtle Lake Club in northeastern Michigan and was known to go duck hunting in Canada and elsewhere.
Smith had homes in suburban Detroit and in Naples, Fla., and is survived by his wife, Barbara, four children and six grandchildren.
Seventeen years after he left the top posts at GM, which has seen its market share slip below 24%, Smith's legacy seems, for some, a bit brighter. Although many of his most daring projects have been abandoned, some remain. Saturn, for example, has proven a vital piece of GM's business.
And, according to Lewis, who tape-recorded Smith's reminiscences in 1990, the former executive had a surprisingly prophetic vision: "Wait until you see what the car of the year 2000 will be," Smith said at the time. "I'm absolutely convinced it will be a hybrid -- part electric, part engine."
Tellingly, the first hybrid sold in America, in late 1999, was a Honda, made in Japan.