J. Ignacio Lopez may have helped save General Motors from bankruptcy in the early 1990s. But the former purchasing chief embarrassed his friend, GM CEO Jack Smith, and was the cause of bitter accusations and lawsuits in Germany and the United States.
It was all about saving money — first for GM and then for Volkswagen Group.
Lopez was a wizard at squeezing suppliers until they hurt. Harold Kutner, GM group vice president for worldwide purchasing from 1998 to 2001, says many of the purchasing policies, methods and philosophies Lopez instituted are still in use.
Lopez, a Spaniard from the Basque region, was brought to Detroit in 1991 by Smith, who later became CEO. When Smith was president of GM Europe in the late 1980s, Lopez was head of GM purchasing there and turned the supply industry topsy-turvy by shredding contracts, demanding price cut after price cut and pressing for improved quality and just-in-time delivery.
GM was in dire straits, and Smith wanted the same results in North America.
In his first year in Detroit, Lopez saved GM $1.1 billion. For 1993, Smith anticipated Lopez would save GM another $2.4 billion, primarily by renegotiating supplier contracts.
But the celebration was short-lived. Lopez bolted to VW in 1993, lured by the promises of VW Chairman Ferdinand Piech that VW would build two of Lopez's long-dreamed-of lean-production factories — one in Spain's northern Basque region and one in Wolfsburg, Germany.
Lopez desperately wanted the Spanish factory because it would make him a hero in his homeland by bringing jobs and a revolutionary way of assembling cars. Lopez believed Smith and GM had reneged on a similar promise for a Spanish plant.