General Motors Corp. plans to eliminate the general manager positions at its five marketing divisions in a further move to centralize its North American Operations unit.
Brand management and marketing also are major pieces of the coming changes, a GM insider said.
GM's Saturn Corp. subsidiary, which doesn't have a general manager or brand managers, isn't part of the proposed reorganization.
TITLES NOT KNOWN
While eliminating the general manager layer, a new three-person management tier would be set up under Ron Zarrella, group VP-sales, service and marketing at North American Operations, executives close to GM said.
They didn't know exact new titles, but said Philip Guarascio would be one of the three.
He's now VP-general manager of marketing and advertising for North American Operations.
Another new position under Mr. Zarrella would be to oversee all brand managers, and the remaining one would oversee sales and service.
John Middlebrook and Roy Roberts, the general managers of Chevrolet and Pontiac-GMC divisions, are said to be among those under consideration for the posts, the executives close to GM said.
The proposal is expected to go to the unit's Strategy Board in about a month, then to the President's Council for final approval. GM's board will see the plan, but its blessing isn't necessary.
North American Operations may need to create more new positions, one of the executives speculated, especially for the manager overseeing all the brand managers, since it would be too difficult to have nearly 40 people directly reporting to one. More doable would be five or six people under him, perhaps one from each of the five divisions.
The move comes as GM is studying a consolidation of its U.S. field marketing staff.
The proposed field changes would create a single staff to handle all brands in regional markets, replacing the current staff for every division. The shift would diminish general managers' role in sales and service, leaving them with only marketing duties.
HINTING AT CHANGES
Richard Wagoner, president of GM's North American Operations, hinted at a change in an interview with Automotive News last week.
"I can't imagine the world where we're not going to have people responsible for the Pontiac brand or Cadillac brand," Mr. Wagoner said. "If that's your question, general managers are not going away. If your question is, will the general manager of today always be like today? I doubt it. They've changed a lot since the 1970 period and they will continue to change. They've changed a lot from three years ago. But someone responsible for the brand is very important to us. That's not going to change."
NO DECISION YET
Mr. Zarrella's spokesman, Group Director of Management and Communications James Farmer, said nothing has been completed: "We are studying a number of different models within the vehicles sales, service and marketing group, but it isn't soup yet; no decisions have been made." Through Mr. Farmer, Mr. Zarrella declined to be interviewed.
NAO last year hired an outside consultancy to conduct a study on the reorganization. Its plan is now what is being tweaked by GM executives, the insider at GM said.
The news isn't shocking, according to three of the executives close to GM.
"The signal was sent up a long time ago," said one executive close to GM, citing the company's $72 million purchase in 1996 of the downtown Detroit Renaissance Center for its new headquarters. Published reports at the time said GM planned to move all its marketing divisions into the new head~quarters for better coordination.
While GM confirmed early reports of its purchase of the building, it dubbed the centralization reports "media speculation about organizational changes."
To date, GM's Cadillac, Chevrolet and Pontiac-GMC divisions have relocated in the Renaissance Center. Oldsmobile and Buick will move later this year.
"NAO is changing the culture of the organization around thinking more along the lines of GM and less about the divisions," another executive close to GM said. The changes, if approved, are aimed at making GM faster, better and leaner.
"Each division has a lot of duplication, and they're trying to get rid of some of the duplication and cut out some of the layers and cut out some of the costs and make the organization more marketing-driven," he said.
GM officially switched to brand management at the start of 1996, naming its first brand managers in fall 1995. But its market share, inching down for decades, slipped from 31.3% at the end of 1996 to a record low 31.1% at the end of last year, according to Automotive News.
New consumer incentives in April helped inch up market share for the first four months of 1998 to 31.2% vs. 31% for the same period a year ago.
Although many staffers would stay in place, another round of changes at GM "does disrupt the organization," said a former GM manager still close to the carmaker. "Everyone has to learn new jobs."
But long term, a North American Operations-centered consolidation could help GM reduce the number of different nameplates it markets, the former GM manager said.
Auto industry analysts have said too many of GM's vehicles overlap and compete with each other.
Copyright May 1998, Crain Communications Inc.