Q&A with Jack Smith

Q - What's your outlook for the U.S. market in 1999?

A - We don't see a recession, but the growth will slow next year and sales will be a bit lower, around 15 to 15.2 million light trucks and cars. What we see is the U.S. and Europe really remaining strong, but the rest of the world is in trouble.

Q - Do you think the impact of the DaimlerChrysler merger/acquisition has been overstated by the media or is it a fundamental paradigm shift that changes the way you and others look at things?

A - What we have is the creation of another global player. Previously Chrysler was not a global player. We always thought they would do it by acquiring someone. We didn't think it would happen the way it did.

Q - Did you ever talk to Daimler-Benz about a possible partnership or acquisition?

A - No.

Q - Why didn't you talk to them?

A - The opportunity didn't present itself. That actually wasn't on our agenda.

Q - Are there any other companies on your agenda?

A - Well, we just did a transaction with Suzuki in July. What's important about this is the opportunity of doing a lot of strategic growth with Suzuki. Our thought process is that cars will get smaller and lower-cost in developing countries. Suzuki is the leader in that area. And so we're going to work on some new car concepts for rural areas and for large urban cities with Suzuki.

Q - Will that take Opel out of the picture for global small cars?

A - No. We're talking about vehicles that are below what Opel makes. It allows us to strategically look at, for example, a rural vehicle in China. The vehicle we're talking about is not a car. It has the capability to do farm work.

Q - Why did you bring Lou Hughes back to the U.S.? Suddenly he comes up with a title called new strategies, which nobody understands.

A - We had a long-term effort going on to go to global platforms. Lou worked very well with Rick Wagoner on that and we made progress on it. I take my hat off to both those guys because it's hard to do. The difficulty was that it was slow and time consuming. We had a manpower problem and a lot of meetings. People were saying: 'It's too much structure, too much time.' So we started looking at it and came to the conclusion that the true solution was to move to a global automotive organization.

Q - What's your vision of what General Motors will be 10 years from now?

A - We'll be the world leader in transportation products and related services.

Q - Does that mean you have plans to broaden the business beyond cars and trucks into airlines or trains?

A - No, but we are talking about working hard at putting communications into the vehicle to generate downstream revenue opportunities. There's OnStar, direct satellite radio, television and bringing the Internet into the car. All of that is way out in front of us. We have experience with DirecTV through Hughes (Aircraft). We have always been kind of a hardware producer, and once it's out the door it's gone. I think today we're thinking: 'How do we stay with this vehicle?' With leasing and everything else and with the fact there are phones in the car now, there's an opportunity to participate in that, and it's very large. It takes a lot of scheming to figure out our role in that and how we work it.