Roger's Painful Legacy

GENERAL MOTORS GOT RID OF THE WRONG GUY LAST WEEK. BOB Stempel is not responsible for the disaster at GM. That distinction belongs to Roger B. Smith, Stempel's predecessor as chairman, made infamous in the film Roger & Me. As CEO from 1981 to 1990, Smith designed and executed the strategy that has impoverished the industrial giant. Stempel was laboring to undo the damage when GM's board forced him to fall on his sword after little more than two years on the job. By week's end the directors reportedly began moving to give Smith a final shove as well.

Smith occupies a comfortable $26,000-a-year seat on the GM board. Each time he actually attends a board meeting, he gets an extra $1,000. He earns an additional $12,000 a year for sharing his thoughts with the other members of the finance committee. GM provides him with a company car and an office as well. The capper is his retirement package, which a GM spokesman describes as "in the range of $1 million a year." This is his reward for a decade of stewardship in which the company lost 10 percentage points of U.S. car-market share.

In the only interview Smith granted after last week's coup, he bristled at such criticism and sought to burnish his legacy, telling the Detroit Free Press that Electronic Data Systems, which GM bought in 1984 for $2.5 billion, is now worth seven times that amount and that Hughes Aircraft ($5 billion in 1985) has doubled in value. "That's not too shabby," Smith said. "I think I gave GM a little bit of money to see 'em through."

Fair enough. But Smith glosses over his failure to engineer any significant progress in the company's main line of business. During the 1980s the company staggered from one automotive blunder to another. Worst among them were the cookie-cutter cars. The idea behind them was to save on manufacturing costs, one of Smith's abiding principles. But the look-alike models blurred the historical marketing distinction GM had carefully cultivated between Chevrolet at the bottom of the market, Cadillac at the top and Pontiac, Oldsmobile and Buick in between. None of the cookie-cutter cars will make it to the Automotive Hall of Fame.

As GM stumbled through the '80s, many people asked questions about Smith's competence. But GM's directors raised nary a public peep about the executive who was leading them downhill. The reason is simple, said Ross Perot, who was on the board at the time. "Smith has a Pet Rock board of directors." Bob Stempel was not so lucky.