General Motors Death Watch 113: Hey Diddle Diddle

I’ve said it before, I’ll say it again: GM Car Czar Bob Lutz is a gift. To the media– not GM stockholders. The General’s Vice Chairman of Global Product Development feels free to make it up as he goes along, paying scant regard to the current state of the world market or his own company’s plans. Lutz proved the point, again, at his Swiss birthplace. Speaking to reporters at the Geneva auto salon, Lutz outlined his vision for Cadillac. Unfortunately, Cadillac’s General Manager was at the same show.

So, Mr. Lutz, Caddy’s flagship sedan, the DTS. The model accounts for 25.6% of the brand’s U.S. sales. Does it? I’m not surprised. Yes, well, moving forward, front or rear wheel-drive? Rear wheel-drive. That’s the way we’re going with all our mainstream– I mean, upmarket cars.

Jim Taylor, General Manager, Cadillac. DTS. Front or rear-wheel drive? Good question. We could put the DTS on the Zeta rear wheel-drive platform– which we’re using for the new Pontiac G8– or merge it with the STS line. Or keep it in its current form. So no decision yet? No decision yet.

Mr. Lutz, what about a small Caddy? You guys sell the front wheel-drive Cadillac BLS in Europe, South Africa and Mexico. Any plans to bring it to the States? We don’t want a front wheel-drive Cadillac in the domestic market. As for a small rear wheel-drive car, "there's certainly an opening, whether we choose to fill it or not."

Jim, you on board with that? "We're not going there. We're a $30,000-to-$40,000 player, not a $20,000-to-$30,000 player."

Even now, I find it astounding that a company as large as GM is run by people who don’t know the first thing about competitive strategy. Strike that– who don’t HAVE a competitive strategy. Or if they DO have one, the people in charge of implementing it have no idea what it is. How could the two men determining the fate of GM’s flagship brand have various, nebulous plans for its future?

No wonder GM is getting its ass kicked.

Even a cursory glance at Toyota’s success tells us the company’s top executives have read, understood and implemented Sun Tsu’s “The Art of War.” To wit:

“The good fighters of old first put themselves beyond the possibility of defeat, and then waited for an opportunity of defeating the enemy.” Think Camry.

“He wins his battles by making no mistakes. Making no mistakes is what establishes the certainty of victory, for it means conquering an enemy that is already defeated.” Think Toyota’s rep for reliability and their limited product line.

“Appear at points which the enemy must hasten to defend; march swiftly to places where you are not expected.” Think Prius.

“We can form a single united body, while the enemy must split up into fractions. Hence there will be a whole pitted against separate parts of a whole, which means that we shall be many to the enemy's few.” Think Toyota’s three divisions.

Need I go on? The really depressing bit is that you can read Sun Tsu and marvel at all the ways GM has violated virtually ALL of the principles set forth by the master military strategist.

GM’s seemingly endless strategic failure seems preposterous, given the fact that Maximum Bob Lutz is a former Marine aviator. Surely a top flight military man should understand the rudiments of armed conflict enough to formulate something akin to a coherent plan for victory.

But then, Lutz served from 1954 to 1965, before Colonel John Boyd changed Marine fighting strategy to reflect Sun Tsu’s principles. Lutz was trained to execute what Boyd called "hey diddle diddle, straight up the middle.” In other words, Lutz and Co. still believe in a direct assault on Toyota, using strength of numbers to overwhelm the enemy.

Why else would GM even entertain the idea of buying Chrysler? Even though it’s clear to anyone with a modicum of common sense that the last thing GM needs is more cars, workers, bureaucrats, divisions and dealers, the fools running the company couldn’t immediately see that the concept offered nothing more than a corporate suicide pact. How many examples of ruined conglomerates do you need to see before you realize that “synergy” is another word for insanity?

If GM had some genuine mental firepower at the top, could they turn the company around? Absolutely. But they’d need to adopt Sun Tsu’s final strategy: if all else fails, retreat. Many see GM’s successful expansion into foreign markets as its final hope. Others do not. As Cadillac’s lackluster lineup proves, GM needs to regroup, conserve its remaining resources and marshal them for the fight on the home front. Otherwise, all will be lost.