GM's bleeding continues; loss is $753 million
The loss was the eighth for GM in the last nine quarters. It brought the company's deficit for the first nine months to $970.7 million, compared with $1.9 billion for the same period last year.
Analysts expect GM's loss for the full year to narrow to less than $1 billion, down from last year's $4.5 billion.
The role of an outside director of a major U.S. corporation is twofold:
1. Try to stay awake during meetings.
2. Always vote with the chairman.
The nonemployee directors of GM shattered the second rule in 1992. Not only did they fail to vote with the chairman; they were poised to kick him out. Stempel saved some face by retiring before that action took place.
The GM president and several other top executives also were purged in the boardroom revolt. It was a discouraging period for GM.
The company was losing money at a frightening rate. Buyers were shunning its look-alike cars. Market share had dropped 10 points since 1980. Plants were closing, and workers were being laid off. Product quality was poor.
The outside directors had had enough. They cleaned house and installed Smale as chairman and Jack Smith - who had become president early in the revolt - as CEO. Smale was GM's first non-employee chairman since Lammot DuPont in 1929-37.
Many observers think Stempel was the fall guy, and call Roger Smith, chairman from 1980 to 1990, the real culprit.
GM made barrels of money under Roger Smith, but its core business suffered. GM paid $7.5 billion for computer giant Electronic Data Systems Corp. and defense kingpin Hughes Electronics. It got into mortgage banking and delved more deeply into finance and insurance; diversity was the name of the game. Cars and trucks seemed like an important - though rather neglected - sideline.