This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Opinion: Lessons from GM's Board of 1992

Yesterday, General Motors announced (that) next year they're gonna begin selling cars in Japan. . . That is good news. And they said today if it works, they may begin trying to sell cars right here in the United States. -- Jay Leno, Dec. 29, 1992

That joke from 16 years ago may make Leno seem like a financial swami, but he was only satirizing the news of the day back then. General Motors, the once-great global maker of cars, had a thoroughly miserable year in 1991 -- losing $4.45 billion -- some $9 billion in today's dollars and was fast increasing the crater in 1992. By the time the year ended, GM had lost another $2.66 billion, excluding a $20.8 billion accounting charge, and in June to September, shed some 27% from its share price.

GM's misfortunes were to change abruptly, however, courtesy of its outside board members. The group -- at first considered lame and lazy by many journalists who followed GM at the time -- not only ousted the CEO and many of his top managers, replacing him with a shrewd executive -- but proved handy with a hatchet in reducing the automaker's costs.

Regardless of how fumbling GM's board of 1992 appeared then -- their dismissal of CEO Robert Stempel was public and cruel -- their missteps can be forgiven because of the outcome. They mandated an overhaul of GM and it worked. By the end of 1993 -- 15 months after Stempel's ouster -- GM's profit had risen to $2.46 billion (roughly $4.8 billion in today's dollars) and its stock price had increased 63% to $43.95 a share.

1 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,001.22 -38.27 -0.22%
S&P 500 1,988.40 -3.97 -0.20%
NASDAQ 4,538.5510 +6.4470 0.14%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs