Roger Smith Leaves His Mark At GM

DETROIT - Roger Smith, an accountant who drove General Motors Corp. over some of its roughest roads, retires tomorrow as chairman, ending a 9 1/2-year tenure criticized for focusing too much on money and too little on cars.

Money is among the things Smith bragged about during an interview two weeks before leaving.

``I think the corporation is in super shape,'' he said. ``We made more money last year than any corporation in the world except Royal Dutch Shell. ``I don't think that's too bad a target.''

GM reported $4.2 billion in profit for 1989, down 13 percent from 1988, the best year in company history. In 1981, Smith's first year as chairman, GM made $333.4 million.

That's a turnaround of which any accountant, including Smith, would be proud.

In 1981, GM's share of the U.S. car market stood at about 46 percent. At the end of last year, it was 35.1 percent. Smith, the third longest-serving GM chairman since 1912, dismisses that when looking at the big picture of the corporation.

``You can't pay dividends out of market share,'' he says.

That doesn't logic doesn't impress Herb Adcox, a Chevrolet dealer in Chattanooga, Tenn. Adcox has been a dealer for 38 years, three fewer than Smith has been with GM.

``I know the shareholders have got to make money, but if the market share begins slipping, you lose,'' Adcox says.

Plenty of people think GM lost during Smith's tenure. H. Ross Perot quit the GM board in late 1986 in a highly publicized fight with Smith over the way the company was managed. GM spent about $700 million to quiet Perot. That move generated harsh criticism, especially from GM's main union, the United Auto Workers.

Most recently, the movie ``Roger and Me'' takes Smith to task for GM's cutbacks in the company's birthplace of Flint, Mich. Smith says he hasn't seen the film and doesn't plan to.

Smith claims as his greatest accomplishment the 1984 corporate reorganization that combined engineering, manufacturing and marketing of each of its car divisions into two groups.

The execution of that reorganization was another matter, especially in communications. Smith said he regrets that.

The acquisitions of Electronic Data Systems Corp. (EDS) in 1984 from Perot and Hughes Aircraft Co. in 1986 are proud moments.

``If EDS never did a thing for us in terms of working together, just look at the financial aspects,'' he says. Last Wednesday, EDS reported its second-quarter earnings rose to $125.3 million, up 19.5 percent from a year ago.

``Look at Hughes, 15,000 engineers we picked up there,'' he said. ``We haven't caught up with that yet. The automobile isn't quite ready for what they've got. When it gets there, it's going to be wonderful.''

For all the criticism leveled at Smith, his final official act will come from behind the wheel of a car. He will drive the first Saturn off the line at Spring Hill, Tenn.

In 1983, Smith announced the project. GM so wanted Saturn to be separate from the corporation that it set up a subsidiary to coordinate all activities.

A new, $1.9 billion manufacturing complex was built in Spring Hill.

All during the 1980s, GM heard criticism that all its cars looked essentially the same. ``Oldsmobuicks'' and ``Chevymobiles'' were among the nicknames.

Industry observers say that should fade under new Chairman Robert Stempel, who takes over Wednesday. Smith rose through GM's financial ranks. Stempel, GM's president for nearly three years, came up through its engineering and marketing organizations. The two have had adjoining offices and have worked closely.

The switch in GM's leadership has received rave reviews.

``I will never sell GM short,'' says auto analyst Mary Anne Sudol of Fitch Investors Service Inc. in New York. ``When that elephant learns to dance, and it's learning some of the steps, you have a very formidable powerhouse in there.''