Cadillac Forum - Enthusiast forums for Cadillac Owners - GM and Cadillac on Monday, Nov. 14, 1988

found this old article which may be quite enlightening to some when it comes to Cadillac history.

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Man in The Hot Seatby Gordon B.

If his chauffeur-driven car were to break down, General Motors president Robert Stempel is the sort of guy who would roll up his sleeves, look under the hood and fix it himself. Coming of age in Bloomfield, N.J., in the early 1950s, Stempel toiled during the summer as a garage mechanic. After joining GM as an engineer in 1958, he designed a front-wheel-drive transmission for the 1966 Oldsmobile Toronado. Stempel's success with the front-wheel drive, a radical departure that later became a standard feature, accelerated his movement up the corporate ladder.

By 1987 the 6-ft. 4-in. former college-football tackle had gone as far as most "car guys" are traditionally permitted to go at GM: the presidency, serving under one of the financial executives who have dominated the chairman's job. But at the moment, Stempel, 55, is the leading candidate to succeed chairman Roger Smith, who must retire at 65 in July 1990. The prospect of an engineer taking charge for only the second time in GM's 80-year history is providing a much needed morale boost for many dealers and employees. "He can talk about automobiles," says Carl Sewell, a Cadillac dealer in Dallas. "He can talk about the engine. He can talk about the transmission. The guy is what we've been looking for."

Never before has GM so sorely needed a top-notch tinkerer. As the No. 2 manager at the world's No. 1 automaker (1987 revenues: $102 billion), Stempel presides over a company suffering from a showroom full of image problems. Originally known for the distinctive styling of its separate car lines, GM took a wrong turn in the 1970s when it began building cookie-cutter cars: a Chevrolet Citation was a ringer for a Pontiac Phoenix, for example. At the same time, shoddy workmanship, especially in the notorious X-car line, sent hordes of GM devotees to Toyota and Honda salesrooms for better-made products. Many customers were also lost to Ford and Chrysler, which were reviving their reputations for quality.

Once the producer of nearly 52% of all new cars sold in the U.S., GM saw its share slide to 46% in 1984, then drop to 36% today; Ford forged ahead from 19% in 1984 to 22%, and Chrysler climbed from 10% to 11%. Japanese automakers, who are rapidly opening U.S. plants, have boosted their share of the U.S. market from 18% to 26% in the same period.

Yet GM has embarked on a major overhaul of both its plants and its products. The results are beginning to show. Late last month the company reported earnings of $859 million for the third quarter, a 5.8% rise from a year ago. That uptick is stronger than it looks: taking into account some bookkeeping changes that inflated last year's profits, the latest earnings amount to a 104% increase.

One upbeat quarter does not guarantee a complete turnaround, however, especially since GM has not been saddled with the huge costs of retooling for new models. Says a top Ford executive: "They're on the way back. They're just not there yet." But GM's product-minded president is determined to win back customers with better-made and better-looking vehicles. Moreover, he hopes to get the cars from design tables to assembly lines in less than three years instead of the current five. Helping to speed the process and reduce costs is GM's decade-long, $50 billion investment in building automated plants and modernizing older ones.

GM is taking design lessons from its glory days. The latest versions of Cadillac's Fleetwood and De Ville sedans mark the return of the fins that were the brand's trademark until 1965. "They are voluptuous and sexy," says Christopher Cedergren, an analyst for J.D. Power & Associates. Seductive too: in October GM sold to retail customers 11,443 of the 1989-model Fleetwoods (base price: $30,300) and De Villes ($25,435), 54% more than it sold in the same month in 1987. To lure younger buyers, GM has its Geo line of small cars. Priced from $7,000 to $12,000, the autos are miserly in fuel consumption but splashy in appearance.

Stempel is bringing to market a line known as the GM-10 series, which is designed to compete with Ford's cars for young families: the Taurus, best- selling midsize car in the U.S., and the Sable. The sporty GM-10s have debuted as two-door versions of the Olds Cutlass Supreme, Buick Regal and Pontiac Grand Prix; the four-door models are expected next fall. Already, one of them, the Chevrolet Lumina, is known inside GM as a "Taurus killer." But inasmuch as four-door cars make up 75% of U.S. auto sales, analysts wonder why GM first came out with two-door models, then allowed production of the larger versions to languish during a slowdown in GM's capital spending. Says analyst Maryann Keller: "The person who made that decision had absolutely no comprehension of the car market."

No one at GM is taking the blame, but marketing strategy may be one of Stempel's weak spots. Both the Chevrolet and Pontiac divisions lost market share during and after his stints as their general manager. Stempel has yet to kill off the Cadillac Allante, a mere 1,893 of which sold last year (base price: $56,533), far below the 9,000 projected. Since becoming president, suggests one analyst, Stempel "has yet to take charge." Perhaps so, but Stempel's presence alone -- his booming voice and avuncular manner -- motivates workers and soothes many Wall Street analysts. When Stempel left as head of GM's European operations in 1982 after a 17-month stint, union delegates at West Germany's Russelsheim plant gave him a ceramic wine pitcher as a symbol of the warm relations he fostered with the rank and file. Detroit's unions appreciate him too. Donald Ephlin, head of the United Auto Workers' GM unit, prizes the president's accessibility. Says Ephlin: "If I have things to bring to his attention, he is very responsive."

Despite earning $1.2 million last year in salary and stock options, Stempel remains at heart a grease monkey who reads car-buff magazines, counts race-car driver A.J. Foyt among his friends and won a collection of drag-racing trophies in his youth. His one concession to corporate security: letting a chauffeur handle the 40-minute drive to work from his home in a posh suburb north of Detroit.

Whoever takes over will inherit an industrial makeover that Roger Smith has only partly completed. GM still incurs the highest production expenses of any U.S. automaker; its fixed costs as a percentage of sales are 31%, in contrast to 24% for Ford and 27% for Chrysler. To meet Stempel's stated goal of boosting GM's factories from their present levels of 75% capacity to full utilization by 1992, the company might have to close at least four of 26 North American assembly plants and slash more than 100,000 of 600,000 jobs. Such a move would probably shatter GM's current truce with its workers. Also worrisome is the growing expectation that U.S. car sales, which have been strong for five years running, will weaken in 1989 by 5% or more. GM's toughest immediate challenge is to shine the reputation of its tarnished nameplates. Is Stempel the right man for the top job?