GM Names Stempel Smith’s Successor, Reuss as President

General Motors Corp. President and Chief Operating Officer Robert C. Stempel, who rose through the production ranks of the world’s largest auto maker, was named today to succeed the retiring Roger B. Smith as chairman.

Smith, who steps down July 31 at age 65, announced Stempel’s selection at a news conference at GM headquarters.

Lloyd E. Reuss, a GM executive vice president, will succeed Stempel as president. The position of chief operating officer, also held by Stempel, is being eliminated.

Stempel told reporters at the news conference that his first priority is increasing GM sales.

“One of our major ones (challenges) . . . is to increase our North American market share profitably,” Stempel said. “There is no higher priority in General Motors than increasing our market share profitably.”

GM’s share of the North American car and truck market has dropped to 34.6% last year from 44.1% in 1980.

A team of outside directors served as a search committee for the chairman of the company that last year made $4.22 billion on revenue of $126.9 billion.

The appointment of Stempel, 56, was widely expected by Wall Street and the auto industry.

But the appointment of Reuss to succeed Stempel was not because it means executives with engineering, not finance or marketing backgrounds, will be at the head of the giant concern for the first time.

Reuss, 53, joined GM in 1959. He will continue as a member of the board of directors and have responsibility for all North American operations and worldwide automotive components after he becomes president Aug. 1.

“The appointment of Reuss means the engineers are in the ascendant, while the finance people have not really moved up,” said industry analyst David Healy of Barclays BZW in New York.

“Traditionally, the GM chairman has been a finance man, but it looks like the product guys are essentially running the company,” Healy said, noting that the post-Roger Smith era began when Stempel was named president. “There seems to be a de-emphasis on finance and marketing.”

One of Stempel’s first tasks will be to make sure that GM reaches an agreement with the United Auto Workers union this summer as the two sides begin negotiations on a new national labor agreement to replace the three-year pact that expires Sept. 14.

The union is pressing for increased job security, especially after a number of recent indefinite plant closings that followed a wave of closures that began in late 1986.

Critics have charged that as chairman, Smith put too much emphasis on non-automotive areas, spending billions to get GM into the electronics and defense businesses with the purchase of Hughes Aircraft and Electronic Data Systems while not paying enough attention to the sales declines in GM’s traditionally strong mid-sized car market.

Stempel began his GM career as a senior detailer in the chassis design department of the company’s Oldsmobile Division in 1958. He has held a wide variety of assignments in North America and Europe.

In February, 1986, Stempel joined GM’s board of directors as an executive vice president. The following year, he became GM’s president.