Stempel Wins Close Contest for GM’s No. 2 Spot; Rival Also Receives a Promotion
Robert C. Stempel, an engineer with a strong background in manufacturing and product development, was named president of General Motors on Friday, ending a lengthy, neck-and-neck competition among a handful of top GM executives.
GM Chairman Roger B. Smith announced at a press conference following GM’s annual meeting that the 53-year-old Stempel had been elected to the No. 2 spot in the world’s largest corporation by the board of directors Friday afternoon. He succeeds President F. James McDonald, who is retiring Sept. 1 at GM’s mandatory retirement age of 65.
“I’m obviously very excited about what happened today,” said Stempel, a lifelong GM employee who is now an executive vice president in charge of GM’s truck and bus group and its international operations. But as part of a management team that will continue to be run by Smith, Stempel stressed that he doesn’t plan to push for any major changes at the company.
Although GM’s earnings and sales have been plunging and the auto maker has been rapidly losing market share, Stempel said he still believes that the company is headed in the right direction.
Stempel, who has run a wide variety of GM operations, including Chevrolet, Pontiac and Adam-Opel, GM’s West German subsidiary, won the internal race for GM’s presidency over several executives, including Lloyd E. Reuss, an executive vice president in charge of the company’s North American passenger car operations, and William E. Hoglund, a group executive in charge of GM’s Buick, Oldsmobile, and Cadillac group.
There had been widespread speculation in Detroit over the last year that one of those three officials would take over from McDonald, perhaps gaining a leg up on the others in the race to replace Smith when he retires in 1990.
Hoglund, the former president of GM’s Saturn Corp. small car unit, had been considered a dark-horse contender for the presidency. But Smith had seemingly been grooming both Reuss, 50, and Stempel for top positions at GM for a number of years, and it was unclear until Friday which one was ahead. In 1984, both were simultaneously promoted from car division general managers to group executives of the company’s two new car groups, and then in 1986 they were both promoted, again at the same time, to equal positions as executive vice presidents.
Smith said Friday, however, that Stempel’s appointment does not necessarily make him the heir apparent to the chairmanship. In fact, Reuss also received a promotion on Friday, when GM’s truck and bus operations were added to his passenger-car responsibilities.
Reuss also insisted that the race for the presidency had been “overplayed” in the press. He refused to speculate on what Stempel’s promotion will mean when it comes time to select Smith’s successor.
Reuss and other GM executives added that the outcome of the competition for the presidency shouldn’t create any ill will in the executive suite on the 14th floor of GM’s headquarters here. “Bob and I have worked together for 20 years,” stressed Reuss. “I’ve never seen two guys who could be competitive work better together,” added McDonald, referring to Reuss and Stempel.
Stempel will be taking over the presidency just as the corporation is about to begin a crucial round of labor negotiations with the United Auto Workers, and many observers believe GM may find it difficult to avoid a nationwide strike this fall. But Stempel said he remains optimistic.
“We have to be competitive, and we think the negotiations are going to be tough, but I think if we play our cards right we could be able to work out a settlement without a strike,” Stempel said.
Stempel fits the mold of past GM presidents; he is--in Detroit parlance--”a car man.” Traditionally, GM chooses its presidents from its manufacturing or product operations, while its chairmen, including Smith, usually emerge from its financial ranks.
A New Jersey native who joined GM as a senior detailer in Oldsmobile’s chasis design department in 1958, Stempel moved rapidly up the engineering path inside GM. Then, after serving as Oldsmobile’s assistant chief engineer in 1972, Stempel’s career took off when he was appointed a special assistant to GM President Edward Cole. By 1975, he was chief engineer at Chevrolet, which was then one of the most prestigious engineering jobs in the corporation, and he was well on his way to the 14th floor.
While at Chevy, Stempel had what was perhaps the worst scare of his life--his son, Tim, was kidnapped in 1975 and held for ransom. Tim escaped his captors, however, who were eventually caught and convicted.
