Filling of Atwood’s Post Is Delayed : Decision May Mire GM Hughes Electronics Restructuring
General Motors said Thursday that it will not immediately replace Donald J. Atwood, the president of GM Hughes Electronics who was nominated by President Bush this week to be deputy secretary of defense.
Atwood still must be confirmed in his new job by the Senate, but the announcement of his departure from GM is expected to create a potentially troublesome vacuum at GM’s Hughes Aircraft unit in Los Angeles.
Hughes is in the midst of a major strategic reassessment to cope with changes in its military markets. It has been a high-cost producer in an era of increasing competition and is trying to lower those costs. A major executive change now could complicate its restructuring.
Many Hughes insiders credit Atwood, who is the third-highest-ranking GM executive, for the relatively benign management that GM has exercised over Hughes since the auto maker acquired the aerospace firm in 1985. Atwood is president of the GM Hughes Electronics subsidiary that includes both Hughes Aircraft and Delco Electronics.
Atwood’s engineering background and his academic credentials from the Massachusetts Institute of Technology won him acceptance by the Hughes technical staff. Under Atwood, company veteran Malcolm Currie was named chairman and chief executive of Hughes Aircraft last May.
Currie came into the top job amid substantial turmoil in the executive ranks. Former Chairman Albert Wheelon and Richard Alden, former vice chairman and general counsel, had both abruptly left the company after a power struggle that some Hughes insiders view as a contest between the technical and non-technical factions of the company.
Wheelon, a physicist from MIT, had reportedly encountered a lot of opposition in his job from corporate staff members who did not have technical backgrounds. Ultimately, Alden told GM that he could no longer work with Wheelon, and a furor ensued.
Atwood’s selection of Currie last May to take over Hughes quelled the turmoil and reassured the Hughes technical staff that GM did not intend to remold traditionally free-wheeling Hughes in the GM image. Currie, a doctorate engineer who trained at UC Berkeley, was a veteran Hughes executive with a notable record of scientific achievement.
With Atwood gone, it is not clear how Hughes will fare within the huge GM bureaucracy. The company faces some difficulties with falling defense budgets and a need to improve its competitive position by cutting costs.
If, as some Hughes executives expect, Currie is selected by GM to replace Atwood as head of GM Hughes Electronics, it would reopen a competition for the top job at Hughes. Another possibility, some said, is that Currie would remain chairman of Hughes Aircraft while also taking on the presidency of GM Hughes Electronics.
Hughes Aircraft President Donald White is said to be seeking the company’s chairmanship. He did not respond to an inquiry Thursday.
