Auto Pileup

BARELY A WEEK AFTER NEW CEO JOHN F. SMITH Jr. pledged to make General Motors profitable by the end of 1993, his mission appears even more impossible. Most troubling, GM could now face untold costs in settling liability lawsuits relating to fire hazards in its Chevrolet and GMC pickup trucks, 5 million of which are still on the road. Newly released internal documents indicate that from 1983 to 1987, GM recognized but failed to correct a design flaw that exposed side fuel tanks during crash impacts, allegedly causing about 300 deaths.

Then, just as Ford and Chrysler were reporting 20% gains in car sales, GM products slipped 3.7%. This created the potential for a fourth-quarter loss of $1 billion, to finish off a record third year in the red. Because of declines in its investment portfolio, GM's unfunded pension liability has swollen from $8.6 billion to $11.4 billion. GM is preparing to freeze salaried wages and again suspend executive bonuses, selling off money-losing operations like National Car Rental and stopping production of its slow-selling Cadillac Allante ($61,675) sport coupe. Not even the Allante's powerful '93 Northstar engine seems able to get the auto industry's lame giant moving. (See related story on page 61.)