GM Shifts to Reverse on Lopez : Automobiles: Now the auto maker says its outspoken purchasing chief will not be leaving for a job at Volkswagen.


Three days after saying purchasing chief Jose Ignacio Lopez de Arriortua was resigning, General Motors said Sunday that the controversial executive will remain with GM and not take a top job at Volkswagen of Germany at this time.

The surprising announcement came after Volkswagen issued a statement in Germany saying that "continuous intervention" by GM's board of directors resulted in Lopez requesting that his appointment be delayed.

The unusual public tug-of-war between two of the world's largest auto makers is likely to increase the mystique of Lopez, who has been credited with accomplishing huge cost-savings since joining GM 10 months ago.

GM's ability to retain Lopez--known by his nickname Inaki--also is evidence of a new feistiness at the auto maker, which is trying to change its once smug corporate culture and return to profitability.

Toni Simonetti, GM spokesman, confirmed Sunday that Lopez would be staying at GM, but would provide no further details. "We will have more to say Monday," she said.

Volkswagen issued a statement late Saturday from its headquarters in Wolfsburg, Germany, saying Lopez's appointment to the firm's board and top worldwide production executive would be postponed for as long as a year.

"This is the result of continuous intervention by General Motors," said Ferdinand Piech, VW Group chairman.

VW officials could not be reached Sunday to elaborate on the nature of GM's actions. But the Detroit News reported Sunday that Lopez's employment contract with GM might limit the duties he could perform for a competitor.

Both GM and VW are struggling to cut costs. GM, the nation's biggest auto maker and second largest in Europe, has lost more than $16 billion in North America alone in the last three years. VW, Europe's largest car maker, is expected to post a loss in its current quarter as much of its market is mired in recession.

Both companies were enamored with Lopez, the charismatic 52-year-old Spaniard with a reputation as a ruthless cost-cutter. Since being put in charge of GM's worldwide purchasing operations last year, he has demanded that suppliers lower their costs and make their operations more efficient.

He has done so in an unconventional fashion. Lopez has exhorted his staff to be "warriors" in seeking new ways to save money. He emphasizes a vegetarian diet and has co-workers wear watches on their right wrist to remind them of their mission.

As a result, Lopez has become a controversial figure who evokes both love and hate. Regardless, he has emerged as an important Detroit figure whose words and actions are watched as closely as those of Lee A. Iacocca, John DeLorean and Henry Ford II once were.

His resignation from GM was widely rumored for several weeks. Although he insisted he was happy at GM, few observers were surprised when GM announced Lopez's resignation on Thursday.

GM insisted that Lopez's departure would not harm GM's cost-reduction program. Most analysts agreed, saying the process that Lopez engineered would remain.

But Lopez's loss would have had a large symbolic impact, and GM Chairman John F. Smith, who worked closely with Lopez when he headed the company's European operations, made efforts to keep his trusted lieutenant.

Smith recently promoted Lopez to vice president and group executive. But Lopez and his family reportedly missed Europe. Lopez also was lured by the possibility of overseeing the building of a new Volkswagen factory in Spain and also may have seen his chances for further promotion at GM limited.

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