GM 'car czar' is force behind push to abandon old ways of building cars
DETROIT - Since becoming General Motors' (GM) "car czar" last year,
Bob Lutz has delivered a consistent message to engineers and designers:
abandon business as usual.
With GM staring down bankruptcy fears in 2005, Lutz, 74, was the
catalyst behind a successful effort that brought the launch of the new
Silverado and Sierra pickups forward by three months. Getting the
revamped GM trucks to dealers this year helped to shore up sagging U.S.
sales and beat rival Toyota Motor's much-anticipated Tundra by a full
More recently, Lutz, GM's vice chairman, has had Toyota in his sights
again by pushing GM development teams to leapfrog the Japanese
automaker in areas such as electric vehicles, according to people
familiar with the effort.
Although Chief Executive Rick Wagoner was in the hot seat this year as
the automaker slashed costs and shut plants after a $10.6 billion loss
in 2005, the next stage of GM's turnaround will hinge on efforts
spearheaded by Lutz, analysts say.
"Lutz is a man with vision and discipline," said Dave Cole, chairman of
Center for Automotive Research. "Most importantly, he has an absolute
passion for the product."
In the past two years, Lutz has pushed for change in areas where he
admits GM lagged, such as design, quality of interiors and the time it
takes to bring new vehicles to market.
"GM has such a reputational deficit to overcome that it has to be very
good for a few years before people actually get it," Lutz said in a
Known for his outspokenness, Lutz is a former fighter pilot who
sometimes flies his helicopter to work, buzzing over the glass GM
towers on the Detroit River to a helipad nearby.
He began his career at GM Europe in 1963 and went to BMW, Ford Motor
and the former Chrysler before retiring in 1998.
Asked by Wagoner to rejoin GM in 2001, Lutz came back with a mandate to
overhaul GM's approach to products based on a tough-minded assessment
"When I came back to GM, the Japanese and Germans were way ahead of us
in quality," he said. "And that gave everyone a bad impression,
especially import owners.
"They would rent a GM car at the airport, drive it and it would be OK,
but everything they looked at was gray and depressing and inexpensive
looking. And they thought, 'Now I know why I'll never buy an American
car, particularly not one from GM.' So we had to fix that."
Lutz is also changing the way GM engineers cars in a bid to cut costs
and show that GM does not need an alliance partner like Nissan-Renault
A U.S.-based team will focus on SUVs and pickups for GM, while Europe
will handle midsize cars, ensuring that the automaker uses fewer
vehicle platforms around the world.
With GM only about halfway to its goal of dropping structural costs to
25% of revenue from 34%, the reengineering effort could help GM cut
billions in costs by reducing the average cost of building vehicles,
according to analysts.
For example, the Saturn Astra, a U.S. version of the German Opel Astra,
will hit American showrooms next fall. The Astra will be made in
Antwerp, Belgium. By 2009, the once-ailing brand will have three cars
from Opel, rebadged as Saturns.
"Design has to lead the creative process," Lutz said, conceding during
a briefing for journalists this month that "there was a period when GM
kind of lost its way."
Lutz said he was optimistic about 2007 - a year when a number of
products he has helped steer will go on the market.
GM will launch the redesigned Chevrolet Malibu next year. It also has
well-reviewed crossovers - car-based utility vehicles that are
smaller than traditional SUVs - such as the GMC Acadia, Saturn
Outlook and Buick Enclave.
The new Saturn Vue, Aura and Astra will also hit showrooms next year,
as will the new Cadillac CTS sedan.
"If this product line doesn't do well, then I'm out of ideas," Lutz
Analysts say GM, whose sales have fallen more than 8% in 2006, still
faces a number of risks next year.
A slowing economy is likely to cause an overall industry decline in
sales next year, and weakness in the housing market is expected to hurt
pickup sales. GM also needs to work on connecting with younger
consumers, analysts have said.
Still, analysts say the next phase of GM's turnaround will largely be
influenced by the success of its new models.
"This product resurrection that GM is in the midst of right now, they
would not have ... without Bob Lutz," said IRN analyst Erich Merkle.
"You can restructure, reorganize, you can right-size ... but if you do
not have the right product in place, no turnaround can exist."
GM's board this month increased Lutz's retirement benefits by $3.4
million, sparking speculation that he could be nearing the end of his
run at the automaker.
"I think it would be safe to think, at 75, that your career has peaked.
But am I going anywhere? No. I'm very happy with my role at GM and will
be here for a little while," he said.