GM named Richard G. Wagoner, chief of North American operations, to head the new global unit, which will be broken into four divisions: North America, Europe, Asia and Latin America. All will report to Wagoner.
"Rick's going to lead the charge," said GM chairman John F. Smith in an address to employees.
GM (GM) stock, a component of the Dow Jones Industrial Average, was little changed by the news. Shares traded down 3/8 to 53 3/8.
The changes are similar to those undertaken by Ford Motor Corp. four years ago. The larger GM has moved more slowly, in part because of strong union resistance, to slim down, cut costs and hasten the design and rollout of new vehicles. The snail's pace of change has drawn increasingly heavy fire from shareholders and Wall Street analysts alike.
In the past two months, however, following a damaging two-month standoff with its unionized workers, the No. 1 U.S auto maker has moved more swiftly to drop below-par vehicle lines, forge ahead with plans to divest the rest of its Delphi part subsidiary, streamline its marketing structure and now reorganize its unwieldy management hierarchy.
The recent merger between Germany's Daimler-Benz AG with Chrysler Corp., the third biggest U.S. automaker, highlights GM's need to become more competitive globally.
"The level of competition internationally is ratcheting up on a continuing basis," said Smith in an address to employees. "We must be focused, we must be fast, and we must be responsive to our diverse markets around the world."
Executives said the changes "are not a downsizing move," but allow the company to move quicker in response to pressure from competitors and demands from customers. "We want to run fast, and we want to win. There is nothing more about it," Smith said.
The moves triggered speculation that Wagoner, 45, is now in position to replace Smith, 60, when he retires in a few years. Smith would not comment on succession plans.
Before the changes, the independently run North American and overseas organizations designed and built cars separately, often leading to cost inefficiencies and other problems that held GM back.
Written By Jeffry Bartash