In the 1980s, then-CEO Roger Smith started looking outside the auto arena for profit. He had "the wild idea of transforming GM into something different than an auto company," Meyers said. "He got them into electronic data processing and satellite television and took his eye off the ball."
GM posted a record $23-billion loss in 1992. Smith had retired two years earlier, and a fed-up board ousted his replacement, Robert Stempel, and asked longtime executive John Smith Jr. to take over. He was followed by Wagoner.
Aside from shrinking GM's liabilities, Wagoner's other immediate challenge is to sell more cars and trucks in North America, which accounts for about 75% of its global revenue and 60% of its vehicle sales.
Since 1931, GM has held the title of the world's largest automaker, but Toyota is poised to overtake it in the next five years. Meanwhile, in the United States -- the biggest auto market -- GM continues to lose ground. Despite the automaker's introduction of 17 models this year, most analysts predict a further sales decline for GM, while import brands continue to grow.
Last week GM posted a $1.1-billion loss because of declining North American sales and soaring healthcare costs, its worst quarter since 1992. The company did not offer guidance for its results for the rest of the year.
Not surprisingly, GM's stock has traded near a 13-year low, closing Friday at $26.74, up 73 cents, on the New York Stock Exchange.
To try to turn things around, Wagoner took charge of GM's unprofitable North American auto operations a few weeks ago. The 52-year-old executive believes that adding promising new models, restructuring the company and trimming healthcare costs will spark a rebound.
After decades of downsizing -- GM has closed five plants in the United States and cut its automotive employment by 40% since 1992 -- the company still has the manufacturing capacity to supply 35% of the market, which some analysts say is too much. "It ought to shrink itself to 25%," said auto market researcher Daniel Gorrell of La Jolla-based Strategic Vision Inc.
After eliminating Oldsmobile last year, GM has eight brands in the United States: Chevrolet, GMC, Cadillac, Buick, Pontiac, Saturn, Saab and Hummer. Critics say the company is still burdened with too many average vehicles to command consumer loyalty.
