Roger Bonham Smith

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Roger Bonham Smith (born July 12, 1925) was the Chairman and CEO of General Motors from 1981 to 1990. Born in Columbus, Ohio, Smith earned his MBA at the University of Michigan's Ross School of Business after serving in the United States Navy. He worked his way up the GM financial management team to become corporate treasurer in 1970, vice president of finance in 1971, executive vice president for finance and public relations, and a member of the board of directors in 1974.

When Smith took over GM, it was reeling from its first annual loss since the early 1920s. Its reputation had been tarnished by lawsuits and public protests over the installation of Chevrolet engines in Oldsmobiles and by a poorly designed diesel engine. Smith made sweeping changes at GM, which was losing market share to foreign automakers. He instituted several initiatives that included forming strategic joint ventures with Japanese and Korean automakers, launching the Saturn division, investing heavily in technological automation and robotics, and ridding the company of its risk-averse bureaucracy. Though these changes struggled to earn consistent profits for GM, Smith was nonetheless credited with putting it back on the path to success.

In 1982 Smith negotiated contract concessions with the United Auto Workers and cut planned raises for white-collar workers. After unveiling a more generous bonus program for top executives provoked an angry response from the union, Smith was forced to back-pedal. Relations with the UAW, management, and stockholders remained strained. Profits improved in 1983 and Smith began unveiling his vision for reorganization, diversification, and "reindustrialization."

One of the most controversial decisions made during Smith's tenure was the partial elimination of divisional autonomy in 1984. Chairman and CEO Alfred Sloan, Jr. had established semi-autonomous divisions (Chevrolet, Pontiac, Oldsmobile, Buick and Cadillac) within the corporation in the 1920s, which had been considered a crucial factor propelling GM past market leader Ford in the 1930s. During the 1980s, some critics of GM suggested that autonomy led to needless reduncancy and internal bureaucracy. By the 1990s after autonomy had been reduced, observers suggested that differences between automobiles produced and marketed by the Chevy, Buick, and Oldsmobile divisions were less distinct as a consequence. Automotive commentators cited a lack of a distinct brand identity and demographic changes as crucial factors in the demise of the Oldsmobile division in 2004.

In 1984 Smith oversaw General Motors's acquisition of Electronic Data Systems from its founder Ross Perot for $2.55 billion, an effort to broaden out of its manufacturing base and into technology and services. As a result of the EDS acquisition, Perot became GM's largest single shareholder, joined its board of directors, and immediately became a vocal and public critic of Smith and GM's management. In 1986 Smith and the board orchestrated a $743 million purchase of Perot's GM stock at a substantial premium over the market value of the shares. Perot accepted the buyout, but publicly denounced the expenditure as outrageous at a time GM was closing plants. He announced that he would put the money in escrow to give the automaker a chance to reconsider, but never actually sequestered the funds.

A second large acquisition outside of the automobile industry followed in 1985, when Smith announced the purchase of Hughes Aircraft for more than $5 billion. The company was merged with GM's Delco Electronics to form Hughes Electronics.

Smith's purchases of EDS and GM were criticized as unwise diversions of resources at a time when GM could have invested more in its core automotive divisions. GM spun EDS off as an independent company in 1996. After some major acquisions in the mid-1990s by Hughes Electronics (Magnavox Electronic Systems and PanAmSat), GM divested most of Hughes assets from 1997-2003, including sale of defense operations to Raytheon in 1997, the spinoff of Delphi Automotive Systems in 1999, the purchase of Hughes Space and Communications by Boeing in 2000, and acquisition of the remaining communications and satellite by NewsCorp in 2003.

[edit] Roger Smith in popular culture

• Smith is widely known as the main subject of Michael Moore's 1989 documentary film Roger & Me, which was highly critical of General Motors and the effects of plant closures in Flint, Michigan. At each screening of the film, theaters were required to reserve a seat for Roger Smith.

• Roger Smith plays an important role in the 1985 NFB documentary film Final Offer by Sturla Gunnarsson & Robert Collision. It shows GM's 1984 contract negotiations with the Canadian section of the UAW, which became the Canadian Auto Workers shortly after.

[edit] References

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Preceded by: Thomas A. Murphy	Chairman General Motors 1981 – 1990	Succeeded by: Robert C. Stempel
Preceded by: Thomas A. Murphy	CEO General Motors 1981 – 1990	Succeeded by: Robert C. Stempel