J. P. Morgan, Ex-CBS Chiefs Backed GM Shift
Sources close to General Motors Corp. said Monday that the board of directors’ putsch against Robert C. Stempel’s management, led by John G. Smale, 65, retired chairman of Procter & Gamble, is strongly supported by directors Dennis Weatherstone, 61, chairman of the New York bank J. P. Morgan & Co., and Thomas H. Wyman, 62, former chairman of CBS Inc.
J. Willard Marriott Jr., 60, chairman of Marriott Corp., played an active role last spring when the board first asserted control, sources said. But Marriott has taken a back seat this fall while attending to problems in his hotel empire.
Many observers believe that director Smale will be named interim chairman at GM. They say the impact of his actions on the giant auto manufacturer will be noted in every corporate boardroom in the country.
Said Warren Bennis, director of USC’s Leadership Institute: “This is a kind of wake-up call to all boards. The GM directors stepped up to the plate and said, ‘We must make changes that apparently current management can’t.’ ”
Donald Frey, a former Ford Motor Co. vice president of product development and now an engineering professor at Northwestern University, believes that outside directors provide just what GM needs: “a cold-assed, gimlet-eyed outsider to shake up an inbred company that is losing market share and hemorrhaging cash.”
Of the 15 members of GM’s board, 12 are not employed by GM. The group precipitated the resignation Monday of Stempel, 58, as GM chairman and chief executive.
None of the outside directors agreed to be interviewed for this story. Several spokesmen said the executives could not discuss GM matters outside the boardroom.
Jeffrey A. Sonnenfeld, director of the Center for Leadership at Emory University’s business school, pointed out that Stempel has suffered in part from the fact that he has not served on other corporate boards and therefore was heavily reliant on his board for advice.
“Since he ran the company for only two years, it wasn’t his board,” Sonnenfeld said. “He hadn’t had a chance to shape his own group of adviser-partners.”
Some of the failed policies Stempel inherited were implemented by former Chairman and Chief Executive Roger B. Smith, who is also a member of the GM board. David E. Cole, director of the Office for the Study of Automotive Transportation at the University of Michigan, believes that Smith has played a minor role in the reshuffling.
“The outside directors are leading this,” he said.
Cole questioned why Smale didn’t “lead the charge” toward restructuring in the early 1980s, when he joined the GM board. “We were all concerned at that time that GM wasn’t going through the kind of trimming and focusing that Chrysler and Ford were.”
