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The Final Chapter of Lopez

The final chapter in this controversial clash of philosophies came only nine months after Lopez arrived in the United States. Having generated much attention with his tactics, which were directly opposite to those of Chrysler, Lopez created one of the most bizarre chapters in American business. On March 13, 1993, Volkswagen ended a week of rumor and announced that it had hired Lopez away from General Motors and had offered him a seat on its management board as head of production and procurement. The story shocked both Jack Smith and the rest of the GM management, who had become impressed with his results of cost improvements. They quickly responded and announced on March 15 that they had persuaded Lopez to remain at GM by giving him more authority over production. GM scheduled a press conference for the following morning, at which Chairman Smith was to announce the retention and enlarged responsibility for Lopez. Instead, just one half-hour before the press briefing, Smith was forced to announce that his deal had fallen apart and confirmed that Lopez had again changed his mind and was indeed defecting to VW. The way the story unfolded, and the shock of the final resolution, further convinced the suppliers that trust and loyalty were not in the vocabulary of the once famous—now infamous—cost-cutter.

In a final twist, a short time later, General Motors announced that it was filing legal actions, including charges of criminal theft, against Lopez for stealing proprietary corporate documents and cost information that he took with him to VW. The case was pressed in federal court but was dropped several years later after Lopez was critically injured and suffered permanent brain damage in an auto accident in Spain. At the time of Lopez's defection, though, GM moved to address the complaints of the suppliers and industry analysts by naming Richard Wagner, a young, personable, and rising financial executive, to replace Lopez, as a sign that the company needed to modify its adversarial approach. Wagner later replaced Smith as the CEO and chairman of General Motors.

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