LOU HUGHES had a brave idea six years ago when he was named General Motors' top international executive. He decided to base himself in Zurich instead of Detroit.
Europe made sense. GM's products outside North America are mainly Opel-bred and the corporation's lean manufacturing know-how was mostly forged in Europe. Moreover, it is easier to manage Asia on Swiss time than on the Detroit clock.
It was enlightened to have a small group of Hughes-led executives plan quick, entrepreneurial strikes from Europe rather than Detroit.
Europe was also the bright spot in GM's universe. The products were good and the profits even better.
But things were too hot not to cool down. GM Europe quality, sales and earnings have slipped. Hughes has clashed with Opel in Germany over the pressures of going global. The solution to the embarrassing internal squabble is to relocate Hughes and other top international managers to the USA later this year.
It is questionable whether moving a handful of top executives from Zurich to Detroit is the right response. Opel and the technical development center in Ruesselsheim, Germany, remain critical to international expansion. Conflicts could be made worse by geographical separation.
On the other hand, GM Chairman Jack Smith moved from Europe to the USA in 1988 when he was named executive vice president for international. For four years, he successfully managed the global business from Detroit. Under the new set-up, Smith will no doubt be plugged into day-to-day international operations once again.