Path: bloom-picayune.mit.edu!enterpoop.mit.edu!snorkelwacker.mit.edu!news.media.mit.edu!americast.com!americast.com!usa-post Newsgroups: usa-today.bonus,americast.usa-today.bonus From: usa-post@AmeriCast.Com Organization: American Cybercasting Approved: usa-post@AmeriCast.com Subject: bonus Mon, Nov 2 1992 Date: Mon, 2 Nov 92 04:47:35 EST Message-ID: Lines: 146 11-02 0000 BONUS: Millstein is behind big GM moves USA TODAY Update Nov. 2, 1992 Source: USA TODAY:Gannett National Information Network A crackerjack corporate lawyer with a highly developed social conscience and a lousy golf game is the central figure behind the aggressive actions of General Motors' outside directors to turn the company around. Ira M. Millstein's ideological fingerprints are all over the shakeup of GM's senior management team, which resulted in the resignation last week of Chairman and CEO Robert Stempel, say many familiar with Millstein and GM. WHAT IS MILLSTEIN UP TO NOW? They add that Millstein undoubtedly has played a major role in selecting the new chairman and CEO expected to be announced Monday. Millstein favors splitting duties of chairman and CEO. The betting right now is that board member John Smale will become chairman, and that GM President John "Jack" Smith will be new CEO. HOW DID THIS HAPPEN TO GM? GM directors, lulled by record earnings in the 1980s, did not respond to the automaker's market-share collapse and suddenly are scrambling to save the company. GM had 45% of the U.S. car and truck market in 1980; just 33% today. The company has lost $971 million so far this year. That's atop a record $4.5 billion loss last year and a $2 billion loss in 1990. WHAT DOES GM NEED? Fixing troubles that big requires bold moves - bolder than Stempel has been willing to take. So most of the 11 outside directors (of 15 total board members), attempting to essentially take over the company from its managers, have turned to Millstein (MILL-steen). The high-powered Manhattan lawyer has guided the outside directors through other treacherous maneuvers, and is a trusted confidant. WHAT DOES MILLSTEIN KNOW? Millstein "knows the company very well and is, in effect, providing much guidance to board members. He certainly has the confidence of the board," says Maryann Keller, GM expert and auto-industry analyst at Furman Selz. Millstein declined to be interviewed, partially in deference to attorney-client privilege. But books and papers he has written, combined with comments from friends and associates, speak volumes of his quest to jumpstart corporate USA. WHAT ARE HIS IDEAS? He passionately believes that executives must be more accountable to boards of directors and that directors need to be more accountable to shareholders - particularly institutional investors. Putting Smale, an outside director who once ran Procter & Gamble, in charge of GM would help achieve that. "I've watched him operate and listened to him talk and he has been very clear about what boards of directors should be doing," says New York Comptroller Ned Regan. HOW DO THEY KNOW EACH OTHER? The two know each other through Millstein's role heading a task force that examines investments made by New York's $54 billion pension fund. Asked about Millstein's influence with GM's outside directors, Regan says: "He not only has the board's ear, I think he would be inclined to advise them when to move and when not to move. He's a man with the courage of his convictions, and his convictions are pretty good." WHAT IS MILLSTEIN'S BACKGROUND? Millstein is no stranger to large-scale corporate upheaval, having recently overseen Drexel Burnham Lambert's labyrinthine bankruptcy settlement. Introduced into GM's orbit seven years ago by then-general counsel Elmer Johnson, Millstein advised GM's directors regarding a new class of stock created by the acquisition of Hughes Aircraft. Tight bonds formed between Millstein and GM's outside directors in 1986, when he helped them come up with a plan to pay Ross Perot $743 million to remove him from the board. HOW DOES MILLSTEIN'S PERSONALITY HELP? Top-notch judgment and an ability to laugh at himself are other Millstein attributes, says Johnson, now practicing with a Chicago law firm. "He doesn't give up easily - he's the most persistent man I know," Johnson says. A mere two weeks after knee surgery, he was pounding his 65-year-old body across a tennis court, against the advice of doctors and friends. IS MILLSTEIN TENACIOUS ON BEHALF OF CLIENTS? When compensation expert Graef Crystal wrote a book that criticized a $3.5 million compensation package received by a CEO Millstein was advising, war ensued. Millstein fired off two letters suggesting that Crystal back off, and threatened legal action when Crystal said he might publish the letters. To Crystal's way of thinking, the tactic was "nothing less than corporate terrorism," prompting Millstein to say: "I will continue to do this whenever I think something calls for it, and my client is right." WHAT MORE IS THERE TO MILLSTEIN? He is more than a hard-charging, head-down attorney who routinely leaves hurt feelings and scorched earth in his wake. "He's no pusillanimous wimp. He's strong and tough when he has to be," says Columbia University President Michael Sovern, a longtime friend. But Millstein can also be "a graceful man and gracious, so you're not likely to go away mad. Tough challenges are nothing new for him, so he will not be intimidated by difficulties or the strength of other players." HOW IS MILLSTEIN DIFFERENT? A trim 5-foot-10, thanks to tennis and bicycle riding, Millstein doesn't sleep, eat and breathe the law, like some successful attorneys. "He's not a guy who just focuses his nose to his own narrow pursuits," says Harvard Business School Professor Jay Lorsch. A law partner with Weil, Gotshal & Manges, Millstein has favorite projects; one is the Central Park Conservancy, which raises money for park improvements. In addition to chairing that group, Millstein does free work for the Yeshiva University's Albert Einstein College of Medicine, a Bronx institution where he's a vice chairman. "It's a pleasure to see that kind of intellect operating to solve problems that seem unsolvable," school dean Dominick Purpura says of Millstein. WHAT ARE HIS OTHER OUTSIDE TIES? Millstein also has strong ties with academia; he's taught at the New York University School of Law and Yale University's School of Organization and Management, among other institutions. Interestingly, last year he helped write The Battle for Corporate Control: Shareholder Rights, Stakeholder Interests, and Managerial Responsibility. DOES MILLSTEIN HAVE ANY DOWNFALLS? If Millstein has an Achilles' heel, those who know him are loathe to pinpoint it. "I guess everybody has idiosyncracies, but I just can't put my finger on his," says buddy Burton Resnick, a Manhattan developer. He does allow that his friend has a "lousy golf game," but quickly points out Millstein only recently took up the sport. Bonus Editor: Kate Coughlin. (1-919-855-3491) Making copies of USA TODAY Update (Copyright, 1992) for further distribution violates federal law. This article is copyright 1992 Gannett News Service. Redistribution to other sites is not permitted except by arrangement with American Cybercasting Corporation. For more information, send-email to usa@AmeriCast.COM