Business Week Online: Exit -- and Entry -- Ramps at GM

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Detroit August 18, 2004; David Welch and David Kiley writing for Business Week online reported that Mark Hogan, a top exec, may soon be leaving. That could open a lane for former Chrysler Group honcho Wolfgang Bernhard

It may be lonely at the top -- but not at General Motors (GM ). The carmaker has two vice-chairmen and 10 group vice-presidents. And Chairman and CEO Richard Wagoner Jr. has lured a lot of new talent over the past three years to the penthouse suite, notably former DaimlerChrysler (DCX ) bigwig Robert A. "Bob" Lutz as vice-chairman for product development.

At least one longtime exec may move on, however. BusinessWeek Online has learned that Mark T. Hogan, GM's group vice-president for advanced vehicle development and one of the top product execs under Lutz, is close to announcing a deal to become president and CEO of parts supplier Magna International (MGA ). Its last CEO, Belinda Stronach, resigned in January to run for political office in Canada. If the deal doesn't fall through, Hogan is expected to leave GM at August's end.

Hogan's departure would be a loss, but GM may have a high-powered replacement waiting to step in. Lutz has been courting former Chrysler Group Chief Operating Officer Wolfgang Bernhard for a top job at GM. Hogan's departure would give GM an opening to possibly hire Bernhard. Some insiders say Bernhard could be groomed to succeed Lutz, who is 72. But for now, bringing in Bernhard is far from certain.

"DIFFERENT VIEW." GM sources say that while Hogan and Lutz got along personally, they haven't always agreed on GM's product strategy. Sources close to Hogan say he wanted more operational responsibility and possibly a shot at running product development should Lutz retire. But Lutz has no plans to leave. Says one GM insider: "Lutz and Hogan have a different view of the world."

Magna might be a good fit for Hogan. Based in Aurora, Ont., the outfit has developed the capability to assemble complete cars for the big auto makers. In the late 1990s, Hogan pushed hard to get GM to adopt a more progressive manufacturing approach that let suppliers like Magna do more assembly.

Subsidiary GM do Brasil, where Hogan was president from 1992 to 1997, used this strategy for a compact-car assembly plant. But when Hogan tried to bring the approach to the U.S. in the late 1990s, he ran afoul of the United Auto Workers union, which feared that it would result in the outsourcing of more union jobs.

INTERNAL IRE. Eventually, GM did use some of these manufacturing techniques at its new Cadillac plant in Lansing, Mich., which is now one of the carmaker's top factories for quality output. "Magna has a history of hiring people from the auto makers," says Michael Robinet, vice-president of CSM Worldwide.

Bernhard, 43, was promoted at DaimlerChrysler earlier this year to run the Mercedes-Benz division. But on the eve of taking the job last May, he was removed from the post after he ran afoul of DaimlerChrysler's labor union and the outgoing Mercedes chief Jürgen Hubbert. His management style, described by one colleague as "caffeinated and frequently confrontational," irked Hubbert and the unions, which resented his push for a "makeover" at Mercedes.

Bernhard also raised some internal ire earlier this year by voting, as a member of DaimlerChrysler's management board, against Chairman Jürgen Schrempp's plan to invest billions more into struggling Mitsubishi Motors. Bernhard left the German company officially last month.

Lutz and Bernhard are known to be good friends, and one GM executive said Lutz has been making a case for hiring Bernhard for weeks. Volkswagen (VLKAY ) is also known to be courting Bernhard to take over management of its Volkswagen, Skoda, and Bentley brands. So Lutz will have to woo him away from other enticing offers. Talented execs like Hogan and Bernhard don't sit still for long.

Welch is a correspondent in BusinessWeek's Detroit bureau, and Kiley is the magazine's Marketing editor in New York