graphic
News > Technology
Hughes CEO quits
May 25, 2001: 3:36 p.m. ET

As GM unit seeks merger partner, Smith steps down from his post
graphic
graphic graphic
graphic
NEW YORK (CNNfn) - Just a day after General Motors gave its nod to another possible merger partner for its Hughes Electronics subsidiary, the unit's chairman and chief executive stepped down from his post.

Michael T. Smith, who reportedly had tried to thwart buyout advances by EchoStar to buy Hughes (GMH: up $0.39 to $24.69, Research, Estimates), on Friday resigned his position, effective immediately, the company said.

He is being replaced as chairman of Hughes by GM Vice Chairman Harry J. Pearce, who has had senior management oversight responsibility within GM (GM: down $0.23 to $56.36, Research, Estimates) for Hughes Electronics and has served on the Hughes board of directors since 1992.

graphic  
The Hughes board of directors also named Jack A. Shaw as its new chief executive officer. Shaw, who has been with Hughes since 1987, most recently served as senior executive vice president responsible for the enterprise sector, which includes Hughes Network Systems and PanAmSat.

On Thursday, GM gave EchoStar (DISH: up $0.46 to $33.76, Research, Estimates), the No. 2 U.S. satellite broadcaster, permission to proceed with acquisition negotiations with Hughes.

Such a move would unite Hughes' top U.S. satellite-television broadcaster DirecTV with EchoStar's No. 2 DISH Network.

In addition to EchoStar, Hughes has been in merger negotiations with Rupert Murdoch's News Corp. (NWS: up $1.18 to $37.71, Research, Estimates) on a potential deal that would combine its assets with the world's top satellite television company, Sky Global Networks.

"Smith's been the big opponent to the News Corp. deal. It's been rumored that Smith didn't like the deal because it wasn't good for shareholders. He might have been a bump in the whole process. I don't know if he's just tired of fighting with them," said Suzanne Betts, analyst with Pittsburgh Research.

"I thought he was doing a good job. Either way, something needs to be done with Hughes because as part of GM, it's not a good fit," she said.

"As part of EchoStar or News Corp., it will probably do better," Betts said, adding: "I was always of the impression that EchoStar wasn't even in the ballpark compared to what News Corp. was offering."

"While there is understandably some anxiety inevitably created when there is a potential change of ownership of a company, I assure the employees of Hughes that they have my personal commitment to doing what is right for the business, the people, and the shareholders," Pearce said in a statement Friday. graphic


-- from staff and wire reports

  RELATED STORIES

EchoStar will talk to Hughes - May 24, 2001

GM approves DirectTV talks - May 1, 2001





graphic

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.
Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.