Led Auto Giant During Onset of Regulation, Foreign Competition : Frederic G. Donner, GM Chief From 1958 to 1967, Dies

Times Staff Writer

Frederic G. Donner, chairman of the board and chief executive officer of General Motors from 1958 to 1967, died Saturday at his home in Greenwich, Conn. He was 84.

The cause of death was not revealed.

Donner presided over GM at the time the federal government began imposing safety and pollution regulations on the previously unfettered U.S. auto industry. But under him, the corporation nevertheless secured its position as one of the world's largest industrial corporations.

"The corporation flourished under his chairmanship, establishing new records in dollar sales, earnings, dividend payments and worldwide sales," said the current GM chairman, Roger Smith, in a statement.

'Financial Genius'

Smith called Donner "a true financial genius . . . with a well-ordered, analytical mind."

By some accounts however, Donner played a key role in bringing a combination of disasters and burdens on GM and the entire American auto industry from which the U.S. auto makers are still trying to recover.

In his book, "The Decline and Fall of the American Automobile Industry," veteran auto journalist Brock Yates describes Donner as a leader of a faction within GM management that sacrificed quality to boost profits. This group failed to understand the threat to the American industry posed by small, but well-made foreign cars in the 1950s, equating "small cars with cheap cars."

According to Yates, it was Donner who ordered cost-cutting changes of about $100 per car on the supposedly revolutionary Corvair, America's answer to the Volkswagen in 1960. The changes, such as the elimination of a $15 anti-sway bar, were later blamed for many of the handling problems that made the Corvair the notorious star of Ralph Nader's book, "Unsafe at Any Speed."

Agency Set Up

Nader's campaign led Congress to pass the National Traffic and Motor Vehicle Safety Act in 1966, and establish the National Highway Traffic Safety Agency.

As a result of decisions by financial analysts like Donner, overruling the engineers who had built the industry, U.S. manufacturers not only faced a host of government regulations, but acquired a reputation for building poorly made "gas guzzlers" and bringing on years of losing battles with Japanese and German car makers, Yates wrote.

Raised in Three Oaks, Mich., Donner graduated from the University of Michigan in 1923 and joined GM in 1926 as an accountant, preparing sales forecasts and price studies.

Rising steadily, Donner became assistant treasurer in 1934, and, in 1941, became one of GM's youngest vice presidents, at 39. He became a corporate director six months later.

During World War II, he obtained a $1-billion line of credit for GM--then the largest sum ever extended to a corporation--to underwrite expansion for war production.

Rises to Chairman

In 1956, he was named executive vice president and chief financial officer. Two years later, he succeeded Harlow Curtice as chairman of the board and chief executive officer.

Donner shunned publicity and granted few interviews.

After retiring in 1967, Donner served on the GM board and financial committee until 1974. He was also director and former board chairman of the Sloan Foundation of New York.

He is survived by his daughter and six grandchildren. His wife died in 1983.

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