Room at the Top

In the fall of 1985, at the Cadillac new-model preview for the press at Detroit's Center for Creative Studies, Cadillac executives were furious. Lincoln-Mercury had aired a new commercial called "The Valet." It showed a couple in evening dress leaving their club and asking the valet to bring around their black Cadillac. But as they approached the car to enter, another man said sheepishly, "Excuse me, I believe that's my Buick." The valet brought another car, but it turned out to be an Oldsmobile. Soon the parking lot was in pandemonium as club members tried to sort out their GM luxury cars, which all looked alike.

Then another well-dress gentleman approached the valet and said "My Lincoln Town Car please." The valet immediately retrieved his car. "There's nothing like a Lincoln," said the voice-over.

A top Cadillac executive at the preview said to his table: "You used to be able to tell a Cadillac from three blocks away. Now, it looks like just another car." He was angry about the Ford commercial. He was even angrier at his own GM management which had brought about this "look-alike" problem.

Ford's "Valet" commercial had punched home the point about GM's "look-alike" problem with savagely effective ridicule. There was no answer to the commercial. Before long, Ford discarded the ad, effective though it was. Detroit was still an old boys club.

More ridicule was to come, this time aimed at Roger B. Smith himself. In 1989, a brash, unknown filmmaker named Michael Moore released a weird semi-documentary called "Roger and Me." It chronicled GM's closing of its Flint plants and the devastation to the local community.

Moore, a Flint native, attempts to interview Smith and hold him accountable for the mess, but can't get close to him. The heavy-handed "Roger and Me" worked not only as anti-GM propaganda but as anti-corporate America. The people the film catches upholding the system can barely see past their own narrow and self-interested points of view.

It became quite popular in the theaters and as a videocassette release and was a public relations black eye for GM. Like "The Valet," it could not really be answered. So it wasn't.

Soichiro Honda, perhaps the greatest Japanese auto man ever, got most of the limelight in press coverage in autumn, 1989, when he was among a small group inducted into the Automotive Hall of Fame at a ceremony at Detroit's Renaissance Center. Another towering figure, whose name never graced an automotive nameplate but who designed more timeless classics than any other man alive, was also in that select group. Gordon Buehrig, 85, designer of the magnificent coffin-nose Cord, the dashing Auburn Speedster and a number of incredible Duesenbergs, designer of the legendary Stutz and, more modernly, of the '51 Ford Victoria hardtop coupe, could not be there for his night of honor.

His wife and daughter accepted the accolades for him, as he was confined to bed in his Grosse Pointe Farms home. He had broken some ribs in a fall that Labor Day weekend. Ironically, he fell while attending Kruse International's big classic auction in Auburn, Ind., scene of Buehrig's greatest creative achievements.

It is understandable that Honda would grab most of the headlines. Few media representatives had ever seen a Cord or a Duesenberg and many drove cars made by Honda. So did Buehrig, as a matter of fact. Buehrig had a '51 Ford Victoria and a more modern Corvette in his garage, but his favorite for everyday use was a Honda CRX. "The Honda is a great car," Buehrig said, "like a modern Model T."

Buehrig was such an admirer of the Honda that he designed a couple of special Hondas, one a sportster with a rumble seat (which he called the "Rumble"), the other a high-performance 150-mph speedster (called the "Competitor"). He submitted the designs to Honda Motor Car Co., which was not interested.

Buehrig was looking forward to meeting Mr. Honda, 83, a contemporary he had long admired. Honda had also expressed a desire to meet Buehrig, but it was not to be. Since Buehrig could not attend, he sent drawings, specifications and a description of the "Rumble" and "Competitor" by way of his wife to Mr. Honda.

Buehrig was born in 1904 in Mason City, Ill., and began his automotive career in 1924 at Gotfredson Body Co. in Wayne, Mich., which made bodies for the Wills St. Clair, Peerless and Jewett cars, among others. He was acting on the advice given him a year earlier by an old-time auto designer: "If you want to be an automobile body designer, you should first learn how they are built and how they are engineered."

In 1927, he was hired by General Motors, the fourth designer hired for Harley Earl's new Art and Color Department, the industry's first styling operation. A year later, at age 24, he became chief body designer for Stutz, in Indianapolis, then the year after that became chief designer for the most legendary American nameplate of all, Duesenberg, also built in Indianapolis.

He designed such Duesenberg classics as the Beverly Berline, the Torpedo Phaeton, the Derham Tourster and the Weymann Boattail Speedster. He also designed the stylized eagle Duesenberg used as a hood ornament.

In 1934, he was transferred to Auburn, Ind., where he designed Auburns and Cords and produced his most celebrated designs, the Auburn Boattail Speedster and the 1936 "coffin-nose" 810 and 812 Cords. A poll of visitors to the New York Auto Show in 1936 where the Cord 810 made its debut showed that twice as many rated the Cord the best of show as the second-place choice (the Lincoln Zephyr). Design firsts on the Cord included hidden headlights, an electric-vacuum four-speed shift, variable-intensity interior lights and a radio as standard equipment.

After World War II, Buehrig moved to Ford, where he designed the '51 Ford Victoria hardtop coupe and worked on the Mark II Continental. He retired from Ford in 1965 and taught five years at the Art Center College of Design in Pasadena, Calif.

Beuhrig did not recover from his injuries and died in January, 1990. He never did meet Mr. Honda.

When Roger B. Smith left the helm of GM in 1990 at age 65, he went out with a handsome financial settlement. His reign was generally judged to have been a disaster. GM lost substantial market share during his decade and its public image went down the tubes. His corporate restructuring ruined morale of middle management, his non-automotive acquisitions caused confusion and misdirection, his spending of billions on automated manufacturing was ruinous, the quality and appeal of GM cars had declined to a very low level resulting in a sharp drop in market share and his public battle and settlement with Ross Perot angered stockholders.

On the plus side, he created and launched Saturn Corp., perhaps the most successful of American cars in blunting the advance of Japanese auto makers. He had returned the corporation to profitability, fashioning a dividend hike and stock split in 1989.

Smith's retirement did not mark the beginning of a new era so much as the ending of the old. Ford's Don Petersen retired the same year. Smith had become the press's whipping boy for America's industrial decline and Petersen was the fair-haired boy of corporate America, but their stepping down marked the turnover of leadership by the generation which had experienced Detroit's greatest era to a new generation. In an orderly succession, popular "car guy" Robert Stempel took over as chairman of GM with Lloyd Reuss as president. Harold "Red" Poling took over as chairman of Ford Motor Co. Only Chrysler held to the past. Lee Iacocca would hang on for three more years, blocking the ascension of Bob Lutz to the top job and causing Jerry Greenwald to quit in frustration.

Stempel had no honeymoon period as the new CEO of GM. He had inherited a mess from Roger B. Smith, but was reluctant to take drastic action to solve GM's problems. He had lived through the chaos of Smith's reorganization efforts and had seen the damaging effects on morale. He took an evolutionary rather than revolutionary approach. GM's losses mounted. Wall Street became alarmed and GM stock fell in value.

In December, 1991, Stempel finally took the tough action he had been putting off and announced the closing of 21 plants over the next three years. He didn't name the plants -- in fact, the hit list had not yet been determined -- but he did say that one of the plants making the big Chevrolet Caprice and Buick Roadmasters would go. One plant was in Willow Run, Mich., the other in Arlington, Tex. This touched off a highly visible battle between the plants, the local communities and the states of Michigan and Texas to keep their plants alive. The media focussed on this battle and GM was in another public relations mess.

GM's directors were getting nervous. The outside directors on the GM board had labored in obscurity for more than 70 years, but now they were moved to act by John G. Smale, retired chairman of Procter & Gamble, who had in his decade as CEO shaken up P&G in much the way that GM seemed to need. For the first time since the board ousted William Durant for good in 1920, the directors were ready to intervene in GM's operating leadership.

In February, 1992, Stemple announced a record $4.45 billion loss for the preceding year. He also announced the 21 plants to be closed and one of them was Willow Run. But that didn't end the rancorous public debate which had come to symbolize GM's decline. Stempel also announced another major restructuring, eliminating GM's duplicate engineering organizations and, in effect, undoing the structure that Smith had built.

Stempel met with the outside directors led by Smale in Chicago to explain his recovery plan. The directors were unimpressed. They insisted Stempel get rid of Lloyd Reuss. A reluctant Stempel had no choice. It was difficult for him to dump an old friend, a "member of the club." But he did. At 55, after 36 years at GM, Reuss was out as president, to be replaced by Jack Smith. Stempel asked Reuss to stay on in charge of Saturn and GM's electric car program. Reuss did. The directors were not satisfied.

Smith began moving to take operating control of the corporation. He ordered the reorganization that Stempel and Reuss had said would take a year or more to complete. He curtailed the cash-draining car rental deals Reuss had made in an effort to prop up market share and told his people to not worry about market share but to "stop the bleeding." He ordered his managers to cut budgets immediately. And he recruited a tough Spanish purchasing executive named Jose Ignacio Lopez de Arriortua from GM Europe to slash GM's purchasing costs.

Lopez was quick in beating up on GM's suppliers to cut costs. Detroit wasn't used to this. Lopez startled GM management people with his strange mix of philosophy and discipline he wrote, called "Feeding the Warrior Spirit." He was of Spanish Basque background, but his philosophy was that of a Japanese Samurai warrior. He acquired the nickname "Inaki." He defined his mission as helping Jack Smith save GM. Lopez took control of GM's purchasing agents, renamed them "warriors" and assaulted GM's suppliers demanding price cuts. His approach alarmed many at GM and everyone at its suppliers. The "old boys club" was closed.

In October, 1992, Stempel was in Washington for a round of meetings when he fell ill at lunch. He was rushed to George Washington University Hospital, where he was kept for tests, then released a couple days later. No diagnosis was disclosed. He returned to Detroit and ordered a statement of support to be drafted for Smale to sign in order to end speculation in the press.

Smale issued a statement, but it was not of support. It confirmed that the directors were pondering the problem of what to do about GM leadership. Stempel faxed Smale his letter of resignation. It was accepted by the directors. The last of GM's old guard, the last "car guy" at the top, was gone.

Bob Stempel loved GM and the auto industry and he loved cars. The morning his resignation was announced, Stempel checked into a hospital in suburban Detroit where it was confirmed that he had a faulty heart valve. No one knew that Stempel was gravely ill during the leadership crisis. He could have used that to make a face-saving exit. But that was not Stempel's style.

Jack Smith was appointed president and chief executive officer, at 54 the youngest CEO since Alfred P. Sloan got the job in 1923. John Smale became the first outside director chairman of GM since 1937. Smith reorganized his top managment team and fired many of Stempel's top lieutenants. GM leadership skipped a generation.