A sense of turmoil to come nagged at many of GM's senior managers in the winter of 1991-92.
It was collective instinct rather than rumor or gossip, a background hum as faint as a distant radio station. But to the clubby group of executives who had spent years climbing to the top of the world's biggest manufacturing company, the vibes that winter were as clear as writing on a wall.
"You could kind of smell the anxiety," Jim Perkins, then general manager of GM's bread-and-butter Chevrolet division, recalled in a recent interview. "In a corporation like GM, you get a sense of things like that, the unrest. We knew that something big was going to happen."
But what? The answer, when it came, would be as explosive as a howitzer round.
Perkins, now 83, said that in March 1992, he was given a "tap on the shoulder" to meet with director John Smale in a suite at the St. Regis Hotel, across the street from GM's massive limestone-and-marble headquarters building in Detroit's New Center area.
Smale, then 64 and a GM director for 10 years, had retired recently as chairman and CEO of Procter & Gamble. In January, he had begun intensive one-on-one interviews with GM's division heads and department chiefs to get their take on the automaker's problems.
There was plenty to talk about. To many observers, GM appeared to be in a death spiral.
The company had lost a record $4.45 billion in 1991, including a staggering $7.1 billion in North America, as its U.S. market share slumped to 35 percent. Costs were out of control. According to an internal study, GM spent $800 more per car on labor than Ford Motor Co., while producing lower-quality vehicles.
Ominously, Wall Street was threatening to strip GM of its top-grade investment rating, a step that would make it much more expensive for the company to borrow the money it needed to fund daily operations. And GM shares were trading at a 41/2-year low — under $30.
Mike Losh, then head of Oldsmobile, recalls a pervasive fear among his contemporaries at the time that the company was foundering.
"The concern was, is this big corporation still economically viable?" Losh, who retired in 2000 as CFO, said in a recent interview. "If you had asked a broad cross section of the organization, that would've been the prevalent concern."