Word: stempel
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Once he gets his new job, Smith is apt to launch the new round of layoffs immediately, since he will be under as much pressure as Stempel to let the ax fall. Board members picked up tough ideas about what needs to be done in talks last month with General Electric chairman Jack Welch, who earned the nickname "Neutron Jack" by slashing GE's work force in the 1980s. Welch reportedly huddled with Smale and several other directors during a two-day forum of CEOs in Hot Springs, Virginia...
...Stempel's ouster is a landmark in the growing shift of power from U.S. managers to corporate directors, who had traditionally been viewed more as rubber-stampers than real decision makers. As recently as the mid-1980s, not even the bellicose presence of Ross Perot on GM's board could persuade the firm to shift gears or change direction. "I did everything I could to get General Motors to face its problems," Perot said in the presidential debates. "They just wouldn't do it." Rather than heed Perot's exhortations to cut executive perquisites and streamline the bureaucracy, GM spent...
Smith's failures put Stempel in an awkward position when the latter took over GM at the start of the '90s. As Smith's handpicked heir apparent, Stempel had loyally seconded the chairman's plans. "Stempel always voted with Roger on everything," says a GM insider, "even though he used to tell me he knew things were wrong and disagreed." So even as Stempel went along with GM's wild ride through the Smith era, he learned the hazards of sweeping change...
That helped make Stempel wary of new directions when he became chairman, just as GM directors began calling for a major overhaul to fix the company. "We could never get a clear answer from him on anything," says a | disgruntled board member. "Everything got muddled and waffled. There was never a critical mass. He was just not up to it. The good news, to his credit, is that Bob finally did the right thing" when he resigned...
...Stempel's defenders portray him as a scapegoat for errors that GM's now militant directors did nothing to stop. "He became captain after the Titanic had already hit the iceberg," Shaiken says. A strapping 6-ft. 4-in. former college football tackle with a booming voice but a gentle nature, Stempel took a conciliatory approach toward downsizing the work force. When a United Auto Workers strike shut down 14 of GM's factories in August and September, Stempel agreed to add 900 jobs at two Lordstown, Ohio, plants where workers had complained about being shorthanded. Earlier, Stempel had signed...