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GM Reorganizing Carmaking Divisions Into Small and Large Car Groups

October 4, 1994

WARREN, Mich. (AP) _ General Motors Corp. is restructuring its carmaking units, combining midsize car operations with its large car division and bringing Saturn Corp. under an expanded small car group.

North American operations president G. Richard Wagoner said Tuesday the changes, which put GM’s car development and assembly efforts under two umbrellas instead of four, are aimed at ″getting our product out faster, more efficiently.″

The restructuring is part of a gradual ″recentralizing″ of General Motors to establish closer control at headquarters over car development, said David Healy, an auto industry analyst with S.G. Warburg & Co. in New York.

Richard G. LeFauve, president of Saturn, will keep that job and add responsibility for the new Small Car Group, which will consist of Saturn and the operations of GM’s Lansing Automotive Division.

GM’s Midsize Car Division will become part of a new Midsize and Luxury Car Group headed by Donald Hackworth, who has been general manager of the Cadillac-Luxury Car engineering and manufacturing division.

Wagoner said the formal alliance between Saturn and the company’s other small car operations would continue the process of sharing Saturn’s success and having Saturn gain from expertise elsewhere in the company.

″We’re not going to take Saturn apart,″ Wagoner said. ″But I don’t think Saturn’s success on an ongoing basis requires that it do everything from the first bolt up uniquely.″

LeFauve issued a news release emphasizing that Saturn will remain a separate subsidiary of GM, with its own labor contract, organizational structure, marketing approach and ″the freedom to continue to innovate in those areas.″

But analyst Healy said Saturn ″looks like it’s slowly being reabsorbed into GM from its status as being an independent car company.″ He said that makes sense.

″On its own, it can’t make money and it needs new products,″ Healy said.

Since 1992, GM’s car development operations for the United States, Canada and Mexico have been divided among Saturn and three major divisions: Cadillac- Luxury Car; Lansing Automotive, for small cars; and Midsize Car.

The midsize unit was responsible for several vehicles that failed to captivate buyers. They include the Chevrolet Caprice, GM’s pointy-nosed minivans and sedans such as the Oldsmobile Cutlass Supreme, Buick Regal and Chevrolet Lumina.

″We are not dissatisfied with midsize today,″ Wagoner said Tuesday, but he acknowledged that it is the company’s ″biggest, most challenging segment.″

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