GM's Pearce Leaving for Hughes
{{#rendered}} {{/rendered}}General Motors Corp. vice chairman Harry J. Pearce was named chairman of Hughes Electronics Corp. Friday, saying that every "serious proposal" would be considered from companies hoping to buy the GM subsidiary.
Pearce, 58, who resigned his position with GM, is replacing Hughes chairman and chief executive Michael Smith, who retired but will be retained as a consultant.
Hughes executive Jack Shaw, 62, will take over as CEO and join the board.
{{#rendered}} {{/rendered}}"These changes were the result of intense and comprehensive discussions between Hughes, GM, management, boards and Mike," Pearce said.
Pearce, 58, will oversee the "strategic restructuring alternatives" of Hughes, GM said in a statement. For months, GM has been considering a number of sales options for Hughes, which owns DirecTV.
Pearce said the boards of directors at both GM and Hughes would consider any serious proposal from companies interested in buying the electronics company.
{{#rendered}} {{/rendered}}"I have to deliver for the enterprise what delivers the most value to most classes of holders of Hughes stock," Pearce said.
GM's board of directors this month had authorized renewed talks with Rupert Murdoch's News Corp., after months of negotiations through the winter failed to produce a sale agreement for Hughes.
Satellite television provider EchoStar Communications Corp. also has placed itself in the picture to acquire Hughes.
{{#rendered}} {{/rendered}}In a filing with the Securities and Exchange Commission Thursday, EchoStar said GM is open to discussions for a sale of DirecTV to Littleton, Colo.-based EchoStar.
Both companies covet DirecTV which is the largest home satellite television provider in the United States with 9.5 million subscribers. EchoStar's Dish Network has 5.3 million subscribers. DirecTV also provides high-speed internet connections.
One acquisitions specialist believes Pearce's ascension to the top of Hughes will greatly accelerate talks to sell the company.
{{#rendered}} {{/rendered}}"He's focusing 100 percent of his time on that effort," says Rajesh Kothari, a partner at GMA Capitol of Farmington Hills, Mich.
Kothari says while EchoStar is a viable suitor, News Corp. has "bigger, deeper pockets. It's a better fit."
The combination of putting Pearce in charge and opening the door to EchoStar is really a way to "turn up the heat," on News Corp. Kothari said.
{{#rendered}} {{/rendered}}Pearce refused to comment on negotiations with either company.
Pearce said his decision to leave GM was unrelated to any health issues. He successfully battled leukemia after he was diagnosed in 1998.
Pearce has been vice chairman of the GM board of directors since 1996, with responsibility for GM's non-automotive businesses, including Hughes.
{{#rendered}} {{/rendered}}He attracted attention in 1992 for a news conference at which he discredited a segment shown on the NBC's Dateline called "Waiting to Explode?" The segment showed gas tanks on GM pickup trucks catching fire after several crashed. However, Pearce and his team discovered the pickup trucks were rigged with model rocket engines to ensure the tanks would catch fire.
Pearce's pet project of late has been the development of GM's Precept fuel cell vehicles.
Shaw, 62, has been with Hughes since 1987, most recently as senior executive vice president responsible for the Enterprise Sector, which includes Hughes Network Systems and PanAmSat.
{{#rendered}} {{/rendered}}Shares of GM were down 19 cents to $56.40, while shares of Hughes, which trades as a GM tracking stock, were up 41 cents to $24.71.