October 2002

GM's Internet Overhaul

Continued from page 1

By Glenn Rifkin

Remaking a Giant

It would be difficult to find a corporate giant more unlikely to achieve information age glory than GM. Tagged for much of the past three decades with adjectives like staid, slow-moving, bureaucratic and moribund, GM had been slowly suffocating from its own inertia. Plagued by bloated cost structures, labor troubles, forgettable products and intensifying global competition, GM had watched helplessly as its market share slid from nearly 60 percent in the 1960s to less than 30 percent by the 1990s. As the millennium approached, GM seemed stuck in the slow lane as its big-three rivals Daimler/Chrysler and Ford Motor prepared to roar past.

But under G. Richard Wagoner Jr., the 49-year old former Duke University basketball player who became GM's chief executive officer in June 2000, the company has begun a significant, technology-driven overhaul that is already paying dividends. As rival Ford fell from grace with a $5.5 billion loss in 2001, GM wowed Wall Street with surging earnings and several quarters of sustained growth. Excluding special charges, GM earned $1.5 billion in 2001 and nearly $2.3 billion in the first six months of 2002 alone.