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Roger B. Smith

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In keeping with the theme of The O.C.'s thread, I choose to place this thread here because it is not recent GM or industry news. This is another blast from the past interview with none other than one Roger (Roger and Me) B. Smith. This interview in many ways is very appropriate in its content to recent news. It is a long but good read.

It just goes to show, "There is nothing new under the sun."


General Motors Corp. chairman Roger B. Smith - State of the Industry 1988 - includes related article: Yen's Rise Boosts GM's Morale - interview

Ward's Auto World, Dec, 1987 by David C. Smith


Roger B. Smith, 62, joined General Motors Corp. in 1949 and has spent most of his career on the financial side. He has been chairman since 1981. Major points discussed with Editor-in-Chief David C. Smith:

* He now looks for 14.5 million U.S. vehicle sales in 1988 -- 9.5 million cars, 5 million trucks.

* No further major plant closings beyond those announced are contemplated.

* GM's new United Auto Workers union contract won't penalize the company in a downturn.

* 1988 capital spending will match 1987's $8.5 billion.

* GM still targets a 40% share of the U.S. market.

Q -- What's your current 1988 forecast?

A -- The non-financial economy is very good, but the financial economy has suffered a severe setback. It was not indigestion on Black Monday. It was a heart attack. And if we don't do something along the lines of a more rigorous health campaign, this country is going to be terminally ill.

Q -- You mean finding answers to the trade and budget deficits?

A -- Those are two things that can really ruin our country, but the problem gets mixed up in politics. The Democrats are trying to get the White House back and the Republicans don't want to let go. And the American people are getting squeezed in the middle because they (politicians) are all looking for political rather than economic solutions. It can't be cosmetic. If there was real budget-cutting -- balancing -- that, No. 1, would help the trade deficit then No. 2, I think we could have a 15-million car and truck year in 1988. If they don't, you get scenarios way on the down side. The middle of the road is 14.5 million, which I don't think is bad for us. But if you look into '89, you see even less than that.

Q -- Right now you see 14.5 million with 9.5-million cars?

A -- I think the downside will come out of cars because we're seeing 500,000 to 600,000 people a year shift from cars to trucks.

Q -- But if Washington really tightened down, wouldn't that have a negative effect on consumers and thus vehicle sales?

A -- Not necessarily. The basic economy is strong. What we need are some reasonable things. Look at the tax bill passed by the House (206-205) after they went through a bunch of shenanigans. If you look inside, there are some really horrendous things. It's supposed to be a revenue-producing bill, but to get the votes or some reason they put a lot of spending in there. There are four domed stadiums in it. Can you imagine that? I guess people don't build dams in their backyards anymore; they build stadiums.

Q -- Should there be a tax increase, and, if so, how much?

A -- If there was an honest attempt at reducing spending I could see some revenue increases. It's difficult to say where it should come from. Business picked up $140 billion in additional taxes during the last go-' round.

Q -- Is it time for individuals to pay?

A -- No, I don't think you have to do it that way, Dave. You could have an extension of the telephone surtax and some things like that. You can raise real money without hurting people. I don't, for example, want to see a gasoline tax -- not necessarily because of automotive implications, but because it is a regressive tax. Gasoline is not a luxury like fur coats.

Q -- GM has reduced production schedules, but your investories are still high. How do you view GM's production and market share (year-to-date 37@ vs. 41% a year earlier) for '87 and '88?

A -- I think our market share will move up, simply with the new cars we have coming out (such as the GM10 midsize coupes). Those cars are going to help us, but it will take awhile to get back up where we should be, and it may be '89 or even '90 before we're really on full load.

Q -- 40% by '89 or '90?

A -- I don't know. Let me say this: It's a strange thing, but I believe if the market goes down, our share will go up.

Q -- Why is that?

A -- Because the basic elements of our strength are pretty widespread. Historically, we've done better when markets have gone down.

Q -- Everyone seems to be going after GM. Do you feel a bit beleaguered?

A -- We'll be starting our 80th year in January, and for 80 years we've had competition. What was it -- back in the '20s -- when we passed Ford? Ford didn't lay down and die. They kept fighting.

Q -- Yes, and they have boasted that Ford beat Chevrolet in model-year 1987.


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Loved the comment about pairing Opel and Saturn!

The rest seems the usual CEO-talk... I found it interesting that he thought the GM10s would be effective against "upscale imports". And what were "upscale imports" in the late '80s? The 1st gen Acuras and Lexus?

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