Hughes Rolls Out Management Team as It Stresses Continuity
As Hughes Electronics introduced its new senior leadership team at its Los Angeles headquarters Monday, the company was clearly focused on one thing: continuity. A trio of longtime Hughes executives will carry on departing Chief Executive C. Michael Armstrong’s vision of Hughes as a leading player in the fast-growing telecommunications business.
Taking over as chairman and chief executive is Michael T. Smith, a 29-year veteran of parent company General Motors, who joined Hughes as vice president of finance in 1985, the year the Detroit-based auto maker acquired Hughes Aircraft.
Joining Smith in the executive suite will be President Charles H. Noski, who served Hughes for 15 years at Deloitte & Touche before becoming the company’s corporate vice president and controller in 1990. Hughes also elevated 40-year veteran Steven D. Dorfman, former chairman of Hughes Telecommunications & Space, to vice chairman of Hughes Electronics.
The moves followed Armstrong’s announcement that he will become chief executive at AT&T.; Armstrong is widely credited with refocusing Hughes from a military and defense company to a telecommunications and commercial aerospace firm in the five years he served as chairman and CEO.
Although praising Armstrong for his stewardship of Hughes, GM Vice Chairman Harry J. Pearce emphasized that the company does not owe its success to any single person.
“Great CEOs are largely the byproduct of great companies,” said Pearce, who oversees Hughes on behalf of the GM President’s Council. “Mike Armstrong would be the first to tell you that much of his strength came from his employees.”
Indeed, many of Hughes’ key strategic moves under Armstrong--including the introduction of such consumer services as DirecTV satellite broadcasting--were planned before Armstrong was recruited from IBM.
Smith has been involved in all three aspects of Hughes’ “triple play”--the sale of the company’s defense business to Raytheon for $9.5 billion, the transfer of Delco Electronics to GM’s Delphi auto parts unit and the expected influx of $4 billion in capital to invest in the telecommunications business.
Smith, whose brother John F. Smith Jr. is GM chairman, president and chief executive, said he expects revenue for the refocused company to grow 20% a year for the next five years. He said his first order of business is to find ways to improve operations in each division.
“We need to make sure we execute better and that we’re absolutely competitive,” he said. For example, competitors such as EchoStar and Primestar have slowed DirecTV’s subscriber growth in recent months. On Monday, Smith said the DirecTV service needs to be simplified and priced more competitively.
Such concerns have fueled speculation that GM is considering a spinoff of Hughes or the sale of some of its parts. But Monday Pearce reiterated GM’s intention to keep the company.
“It is not for sale, period,” Pearce said. “The Hughes telecommunications firm is a dynamic, high-growth company, and we see enormous growth down the road.”
Smith said he learned how to meet customers’ needs from his father, who owned a chain of ice cream stores in his hometown of Worcester, Mass. Smith began working for GM in the accounting department of an assembly division plant in nearby Framingham, Mass., in 1968 and held positions in Michigan and in Spain before being assigned to Hughes.
Noski became corporate vice president and controller of Hughes in 1990 and rose to senior vice president and chief financial officer two years later. In August, he left Hughes to become executive vice president and chief financial officer of United Technologies, a Hartford, Conn., manufacturing firm. Noski said the opportunity to work closely with Smith in a broader operations and management role lured him back to Hughes after less than two months in his new job.
Dorfman, an electrical engineer by training, worked on a variety of satellite and spacecraft programs for Hughes before becoming president and CEO of Hughes Communications, the subsidiary in charge of the Galaxy satellite network.
Stock in GM’s Class H shares, which reflects Hughes Electronics, rose $1.75 to close at $67 on the New York Stock Exchange.
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