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GM Chief Is Keeping Eyes on the Road

Autos: In his first year as CEO, Wagoner worked quietly as competitors got bad press. Lately, his efforts are paying off.


DETROIT — The chief executive of the world's largest auto manufacturer is perfectly content toiling away at his job while his competitors grab all the headlines.

Of course, those headlines have been bright crimson, either about a competitor awash in red ink or about another with its nose bloodied in one of the most spectacular corporate fistfights in history. So G. Richard Wagoner, president of General Motors Corp., would just as soon not be part of the newscasts.

The 48-year-old Wagoner quietly marked his first year as GM's CEO earlier this month. During his first six months on the job, DaimlerChrysler's troubled Chrysler Group made news, first when it said it was on its way to losing $1.2 billion in the second half of 2000, then when it took a $2.8-billion restructuring charge in the first quarter of this year.

In August, Ford Motor Co. leaped to Page 1 with the Firestone tire recall--and hasn't stayed out of the headlines since. The chief executives of Ford and tire maker Bridgestone/Firestone Inc. are scheduled to appear yet again before a congressional committee Tuesday to answer questions about crashes involving Ford Explorers and Firestone tires, for which they blame each other.

GM has had its own share of woes: a languishing stock price, being savaged for the design of the Pontiac Aztek minivan/sport-utility vehicles and having to kill off the unprofitable Oldsmobile brand. GM's U.S. market share, once 50%, has been going south for 30 years, standing at 28.3% last year, down from 29.4% in 1999.

GM also recorded a dismal first quarter, earning $237 million to Ford's $1.06 billion, largely because inventory-related plant shutdowns cut GM's production by 20%.

But lately Wagoner has been treated to a welcome string of good news: The company's share price has bounced upward in recent weeks, productivity is closing in rapidly on Ford, new models are getting generally favorable reviews, and, best of all, GM's market share is moving back up in that high-margin battlefield, mid-size and large trucks, where it has an onslaught of well-received or all-new models.

Full-size SUVs such as the Chevy Tahoe and Suburban and their GMC counterparts are gaining ground, as are GM's full-size pickup trucks. Meanwhile, GM's brand-new mid-size SUVs--the Chevy TrailBlazer, GMC Envoy and Oldsmobile Bravada--have been well-received even as Ford's completely redesigned Explorer has stumbled, partly because of all the bad publicity over Firestone tires.

"I'm happy to see some momentum," Wagoner said in an interview Friday on the 39th floor of one of the several round towers that make up GM's headquarters in downtown Detroit, overlooking the Detroit River and Windsor, Canada.

"We've seen productivity improvement, a lot of our products are hitting well on the market, and the quality trend is good," Wagoner said. "I feel good for our people who have been under siege for a long time."

A long time indeed. "GM has been an embattled company for a decade," said David Bradley, an auto industry analyst with J.P. Morgan. "It's been perceived as a day late, dollar short. But market share has done much better than Ford, Chrysler in the last 12 months."

In large trucks--which account for an estimated 90% of profit at GM and Ford--traditional leader Ford has lost 3.5% in market share this year while GM has gained 4%, said Saul Rubin, auto analyst for UBS Warburg.

GM also improved in recently released productivity and quality surveys, and Ford's ranking fell.

"There have been moves afoot at GM in the last two to three years that led to a better product line, certainly in light trucks," Rubin said. "Things have been good on the cost side as well."

Wagoner was promoted to president and chief operating officer in 1998 and to chief executive June 1 of last year. But serving as chief financial officer from 1992 to 1994 and concurrently as head of worldwide purchasing from 1993 to 1994 and then president of North American operations from 1994 to 1998, he was closely involved in product, manufacturing and labor strategies that are beginning to pay off.

He is known as a likable exec with an easygoing, steady style. Unfailingly polite, he's not a hard-charging, joke-cracking CEO like Jacques Nasser at Ford across town, nor is he a reserved, studious chief executive with a single mission to cut costs like Dieter Zetsche at Chrysler Group. To some, he is a cautious, bland bureaucrat who lacks engineering credentials; to others, he's the right mix of strategy and bean counting (he rose through GM's financial ranks) who delegates well.

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