Get a 'Car Guy,' Rick

Rick Wagoner doesn't need my advice; he didn't make it to the top of General Motors Corp. by relying on his pals in the press for counsel. And besides, he has never paid much heed - at least publicly - to our rantings and ravings.

Still, because I know he's a good listener, has a sense of humor and doesn't hold grudges, I'll offer some unsolicited advice as he takes charge at what is (still) the world's largest industrial corporation.

I asked lots of folks inside and outside GM for their recommendations for Mr. Wagoner, who at 47 succeeds John F. (Jack) Smith Jr., his long-time mentor, as chief executive officer (CEO) - youngest in GM's 92-year history. A 23-year GM veteran, he has been president and chief operating officer (COO) since 1998. Mr. Smith remains chairman, at least for awhile, but it's the CEO who calls the shots.

So here's the brief list, Rick:

n Get a "car guy." We know you like cars, but you're a money man, not one who loves products like, say, GM's legendary Ed Cole, who was one of your predecessors in the president's chair, or Bob Lutz, whom many credit with leading Chrysler Corp.'s new-product surge during the 1990s.

A few candidates: Tom Gale, Daimler-Chrysler AG's design whiz, who turned some of Mr. Lutz's wildest ideas into winners. He's on DC's board and reportedly still loves his job, but he's a leader and might find the challenge enticing. His son Jeff already is a GM designer.

I'd also try to pry Richard Parry-Jones away from the Ford Motor Co. He's a remarkable "car guy," and a likeable chap. He's also Ford President Jac Nasser's protege, so it would be a tough sell. Few, however, can match his product development savvy. Give him some H shares.

I also like Francois Castaing. He was part of the Lutz-Gale team until taking early retirement in 1997, and is available if he has a hankering to get back into the fray.

The list of in-house candidates is short - unless my sources are keeping something from me. Gary Cowger fits the bill, but I suspect you want to keep him on the manufacturing side where he appears to be a shoo-in for the top spot in a few years. I hear that both labor relations and manufacturing eventually will report to Gary. Smart move. It's about time GM recognized that the two go together. I'd also give Tom Stephens a look. He's running engineering at GM Truck and did the same job at GM Powertrain. You've got to like a guy who actually can build a car with his own two hands and has a fleet of vintage Corvettes.

Take a closer look at your own troops, focusing on those with leadership qualities. They may not be Harvard MBAs like you are, but leadership goes beyond book learning. Don't get rid of all that intelligence and experience you've got scattered about the world just because it's chic these days to recruit relative youngsters. Use their expertise.

Conversely, don't be sentimental: Get rid of the deadwood. And don't favor your finance brethren. Finance is really only one discipline necessary to compete.

n Hiring Anne Asensio, the hotshot 37-year-old Renault SA designer, to direct GM's domestic-brand designs may turn out to be a coup. But our sources say making it work may prove difficult unless reporting lines are made clearer than they are right now. "The GM immunity system is alive and well," observes one source.

n Don't fall in love with buzzwords or instant cure-alls. You're often quoted as favoring "big and fast" as GM's rallying cry. Moving too fast without weighing all of the ramifications can come back to bite you, as it has previous GM CEOs. "General Motors thinks it can win by developing and marketing cars in 12 months," says one savvy former Big Three executive. "But what's the rush if you ship bad cars?"

n John Smale, the retired Procter & Gamble Co. chairman who, as a GM director, led the board's revolt that led to Chairman Bob Stempel's departure in 1992, is now being lionized as he re-retires, this time from GM's board. But don't be mesmerized by the brand management scheme he pushed for and won at GM. Simply pumping up a brand that doesn't meet buyer's expectations won't do it. Since GM's brand scheme began taking hold in the mid-'90s, GM has lost 4.1 percentage points of market share in the U.S., and a spate of highly touted brand managers have come and gone.

n It may be painful, but some revered GM nameplates may have to go. "He has to re-focus the company and drop some brands, re-allocating resources to the stronger brands," observes a Wall Street source. Oldsmobile is the likeliest division, but certain weak-performing models in other divisions may have to be pruned.

n Postpone new vehicle generations or major make-overs at your peril. Nearly every competitor has new and significantly advanced small cars, for example, but GM turned its 2002 re-do of the Chevrolet Cavalier-Pontiac Sunfire into a more minor facelift for 2003. This when the likes of Ford's new Focus are riding high. And by the way, the new midsize Saturn LS is a flop. Technically, it's a solid contender. But, as they say, the dogs aren't eating the dog food.

n Whatever it takes, make the winning bid for bankrupt Daewoo Motor Corp. If Ford wins, it'll be another case of one-upmanship by the canny Jac Nasser. GM needs a presence in South Korea or it will face a long uphill battle in the emerging Asia/Pacific region. And don't look at recent investments such as in Fiat SpA as casual relationships. "Get in bed with them," urges our Wall Street source.

There, I feel better.