GM History, 1980 - 1989

As the ‘80s began, GM faced the challenges of modernization. Responding to customer’s continuing demands for more fuel efficient vehicles at reasonable prices, the company launched an unprecedented $40 billion, five-year capital spending program to open the way for dramatic technological progress throughout General Motors. Included were new auto assembly plants in Orion Township, Michigan, Wentzville, Missouri and Detroit/Hamtramck, Michigan, as well as a new Fort Wayne, Indiana truck assembly center.

In addition, virtually all of GM’s car lines were redesigned from body and frame, rear wheel drive, to integral body, front-wheel drive designs in order to reduce weight and improve fuel economy.

In 1981, General Motors Acceptance Corporation and Motors Insurance Corporation, the Corporation’s finance and insurance operations, moved their headquarters from New York to Detroit.

Later that year, a major realignment of GM’s worldwide truck and bus operations occurred. As a result, the truck and bus group took on complete responsibility for the design, engineering, manufacturing, sales and service of all General Motors trucks, buses and vans in North America and throughout the world in an effort to improve efficiency and to enhance GM’s competitive position.

In 1982, General Motors entered into joint ventures with two Japanese companies. The Corporation purchased $200 million of convertible debentures from its Japanese affiliate, Isuzu Motors Limited, to assist in financing the development of a new subcompact vehicle to be produced in Japan and sold worldwide. And, in July, GM entered into an agreement with Japan’s Fujitsu Fanuc Limited to design, manufacture, and sell robotic systems. GMF Robotics Corporation. Shortly after its formation, the Troy, Michigan, based company took steps to design and build a new manufacturing and headquarters facility in Rochester Hills, Michigan.

A major project involving GM’s Buick Motor Division was announced in January 1983. This effort involved a complete revamping of the car assembly operations in Flint to produce all-new front-wheel-drive automobiles for the 1986 model year. Referred to a "Buick City," the concept also involves supplier firms and ultimately created nearly 5,000 jobs in the integrated complex.

In 1984, GM restructured its entire North American Passenger Car Operations into two integrated car groups functioning as self-continued business units. The long-standing Fisher Body and GM Assembly Divisions were melded into the new groups. The two groups -- Chevrolet-Pontiac-GM of Canada (C-P-C) and Buick-Oldsmobile-Cadillac (B-O-C) had complete responsibility for engineering, manufacturing, assembly, and marketing for their products. GM Chairman Roger B. Smith described the concept of self-contained business units as "making the maximum use of every resource, including every one of our people."

A new frontier in the U.S. automobile industry was forged in February 1984, when GM and Japan’s Toyota Motor Company formed a joint venture to produce a new small car in Fremont, California, under the name of New United Motor Manufacturing, Incorporated (NUMMI). The joint effort put its first automobile on the market June 13, 1985, with the introduction of the Chevrolet Nova.

In a merger completed October 18, 1984, the automaker acquired Electronic Data Systems of Dallas, Texas. Operating as an independent consolidated subsidiary, EDS, as a world leader in the computer services industry, benefits GM by more effective control of computer services throughout GM. In addition to EDS, GM acquired minority interests in several smaller, high-tech companies in the vision robotics and artificial intelligence fields. The goal: to further improve its technological capabilities in these sophisticated fields.

In 1985, GM announced the addition of a new automotive operating unit - Saturn - to its passenger car divisions, thus adding a sixth nameplate to GM. Saturn Corporation is headquartered in Troy, Michigan. The car are produced in a highly integrated plant at Spring Hill, Tennessee, 30 miles south of Nashville. Saturn uses start-to-finish innovation to produce a family of subcompacts to compete with Japanese imports while achieving an unprecedented union-management partnership in the development and manufacture of the Saturn project.

In mid-1985, GM diversified and expanded its knowledge in ‘state of the art’ aerospace technology when it purchased Hughes Aircraft Company, El Segundo, California, for $5 billion in cash and securities.

From a strategic standpoint, this acquisition accelerated the rate of application of electronics into GM’s automotive products as well as provided GM with access to world class systems engineering resources. General Motors Chairman Roger B. Smith said the acquisition of Hughes, along with EDS, gave GM "the basic building blocks we need to go forward. To be able to have a lock on the intelligence and research that Hughes has to help us with our future is just tremendous." GM combined its Delco Electronics Division, AC Spark Plug Division’s instrument and display systems business unit, and Delco Systems Operations with Hughes to operate independently as a new subsidiary, GM Hughes Electronics Corporation (GMHE).

In 1986, General Motors continued to lead industrial organizations worldwide. During one of the automobile industry’s most competitive years ever, GM achieved record sales and revenues of $102.8 billion. GM faced many challenges in 1986 and continued to do so into the 21st Century as it confronted the challenges of foreign competition and a global economy.

To accomplish this, GM took a tough stand on cost reduction. The year 1986 saw plant closings, significant reduction of salaried employees worldwide, the phasing out of noncompetitive or obsolete component manufacturing operations, and the overall reduction of operating expenses. These cost-reduction efforts, in conjunction with the opening of six new plants in five years and tremendous investments in retooling and modernizing 12 other

facilities, were designed to enhance stockholder value and make General Motors a high-quality, cost-competitive company ready for the challenges of the 21st Century.

The results of GM’s efforts began to payoff in 1987. GM introduced the Chevrolet Corisca and Beretta, the Pontiac Bonneville, the ultra luxury Cadillac Allante the GMC/Chevy full-size pickup trucks, and Oldsmobile began production of the Quad 4 engine at the Delta Township Plant. The company also offered a new six-year, 60,000-mile powertrain warranty, with six year, 100,000-mile corrosion protection, showing GM’s commitment to produce high quality cars and trucks.

In 1987, General Motors earned net income of $3.6 billion on sales and revenues of $101.8 billion. During the same year, GM’s net income record reflected earnings at each of its three subsidiaries -- General Motors Acceptance Corporation (GMAC), Electronic Data Systems (EDS) and GM Hughes Electronics (GMHE).

Also in 1987, GM’s Sunraycer, a solar powered car designed and built by various units of GM won the inaugural transcontinental World Solar Challenge race in Australia, outdistancing its nearest competitor by more than 600 miles. The flawless performance over the six-day trek was further evidence of GM’s ability to respond to the changing world of the automobile industry.

GM’s commitment to quality was very evident in 1987. GM executives and UAW leaders formed the Quality Network, a joint effort for strategic development of high quality, customer valued products. Also, GM established the Targets for Excellence program. This new supplier development/assessment program was formed to ensure continuous improvement for its suppliers. Its aim was to evaluate and assist suppliers in five key areas: quality, costs, delivery, management and technology.

In October 1987, General Motors Corporation and the United Automobile Workers (UAW) signed a historic three-year labor agreement that underscored a new spirit of teamwork and human partnership between management and labor. The agreement, reached without a work stoppage or strike deadline, featured unprecedented job security provisions and the establishment of joint study committees at GM plants around the country. The on-going focus of these local joint committees is to review operational competitiveness and to find ways to improve quality and efficiency and thereby attract new work.

GM began 1988 with the largest single showing of GM technology in history at the "Teamwork and Technology: For Today and Tomorrow" exhibit at the Waldorf-Astoria Hotel in New York City. The show served as a report to the nation on how GM was multiplying the power of its people and technology to continue into the 21st Century as the number one producer of cars and trucks in the world.

Also in 1988, GM introduced its newly redesigned mid-size cars, the Buick Regal, Oldsmobile Cutlass Supreme, and the Pontiac Grand Prix.

GM earned record net income of $4.9 billion in 1988 on sales and revenues of $110.2 billion.

On February 6, 1989, General Motors Board of Directors declared a two-for-one stock split on GM’s $1-2/3 par value common stock, the first time the common stock split since 1955.

In the face of a six percent decline in auto industry sales volumes in the U.S., General Motors’ sales and revenues in 1989 increased to a record $126.9 billion and earnings were the third highest in GM’s 81-year history despite a difficult sales environment.

Also in 1989, GM introduced the Chevrolet Lumina, the Corvette ZR-1 featuring a 32-value DOHC all-aluminum eight-cylinder engine and six-speed manual transmission, and the Geo Storm and Prizm. GM also unveiled the highly styled, all-purpose Pontiac Trans Sport and the Oldsmobile Silhouette featuring the largest plastic panels ever put on any vehicle.

On the global front, GM purchased 50 percent of Saab Automobile AB of Sweden to develop, manufacture and market Saab passenger cars worldwide.

During the Eighties, General Motors implemented more change--with new plants, new technology, new products, a new commitment to cost efficiency, and a new commitment to its people--than in all of the previous seven decades of the Corporation’s history.