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General Motors to combine product development, research teams

| Thursday, July 16, 2009

DETROIT — The new General Motors Co. began changing its executive ranks and streamlining its management structure Wednesday, announcing the departure of several top officials.

The biggest change is combining research with product development effective immediately. The two had been separate teams.

GM says in a statement that the move is a step toward making the company more agile and efficient.

The company also says Vice President of Research and Development Larry Burns and Vice President of Communications Steve Harris will each retire effective Oct. 1.

CEO Fritz Henderson promised to streamline GM's bureaucratic management structure and cut executive ranks by 35 percent. Changes are to be announced by the end of July.

Combining product development and long-term research gives GM the ability to tie research to future products, but it also could cause it to get shortchanged at budget time, said Martin Zimmerman, a former Ford Motor Co. chief economist who now is a professor of business administration at the University of Michigan.

"The product development guys are rightly going to be concerned about the near-term deployment of the technology, and the R&D guys typically are concerned about farther out," Zimmerman said. "The management problem comes when you have your budgeting decisions and there's going to be a tug between stuff that looks near-term and the longer-lead stuff."

Henderson, under pressure from the GM's largest stakeholder, the U.S. government, wants a more nimble company, one that can make decisions faster and is less bureaucratic than the GM of the past.

In the old GM, several committees often reviewed decisions, holding up new vehicles and making it slow to respond to market changes. Designs were often changed from bold to bland, with GM stamping out nondescript cars such as the old Chevrolet Malibu.

Henderson plans to thin executive ranks from about 1,300 to 850 by the end of the year. Total U.S. salaried employment will drop by 6,150, or 21 percent, from 29,650 at the start of the year to 23,500 by the end.

Burns, 58, a 40-year GM veteran, has led the automaker's move into alternative fuel technologies such as hydrogen fuel cells. He also has been an advocate for the industry to connect vehicles electronically to make roads safer and ease traffic flow.

He will be replaced by Alan Taub, 54, who now serves as executive director of research and development and is in charge of GM's seven science laboratories across the globe. Taub will report to Tom Stephens, vice chairman of global product development.

Harris, 63, a 40-year public relations veteran who has been with GM since 2006, will be replaced by Chris Preuss, 43, who now is vice president of global product and European communications. He will report to Vice Chairman Bob Lutz, who heads creative elements of products, marketing and customer relationships.

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