Between The Lines: A Look Into Bob Lutz' Mind
Published: January 24th, 2008
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GM Car Czar Bob Lutz wants you to know what's on his mind. So, at last night's Automotive News congressional confab, Maximum Bob let rip, revealing the concerns triggering the suit's septuagenarian synapses. But, as usual, there are major gaps between Bob's thoughts and actual reality. Back in '03, I predicted that the automotive industry was on the cusp of a New Golden Age…To my credit, I didn't say exactly when this was going to happen… I would argue that the industry is in much better shape than it was five years ago, and that General Motors is in a lot better shape too. News flash: The Big 2.8 are all losing money. GM has just lost its title as the world's largest automaker (if you discount cars made under a minority partnership agreement with China's SAIC and Wuling). To my simplistic mind, "better shape" doesn't mean closing factories, buying-out workers and losing market share in your home territory. But Bob's not worried.I don't think about [global leadership]. And the answer would be the same whether today's numbers said General Motors is Number One, or Number Two…or tied!So why all the press releases proclaiming GM's still number one– by a mere 3k sales? Oh that's right: Maximum Bob doesn't think about it.The bottom line is, we are running the business in the best interest of the customers, employees and shareholders.Tell that to the laid-off employees and the remaining GM workers with reduced pay and benefits, because their employer can't make enough money to afford them. But hey, never mind, the circus is in town. And Bob's busy thinking about the press' comments about the Detroit Auto Show."How can you possibly not find any buzz at an auto show that includes so many examples of the world's most advanced propulsion technology? Like… a "hydrogen-powered" Cadillac without an actual propulsion system? [c]onsumer behavior is difficult to change, and it when it does change, it takes time, and a darn good reason. I'm not so sure about about the first part of that assertion. GM and the others managed to change American car buyers' behavior pretty quickly in the ‘70's and ‘80's. But MB's right that consumers need a good reason to change. Only Bob thinks Americans will give up their trucks and SUVs only if gas prices rise sharply to levels near what they're paying in Europe.In other words, let's not focus our corporate resources on offering Americans a high-quality, well-engineered small car (at a profit) that might entice consumers to change. Let's legislate high fuel prices so consumers have to change– regardless of what we offer. And there I was thinking Lutz was against federal intervention in the free market. And speaking of boondoggles…[t]he best route to a significant near-term reduction in petroleum usage is E85… f all the flex-fuel vehicles that GM, Ford, and Chrysler have committed to have on the road by 2020… were to run on ethanol, we could displace 29 billion gallons of gasoline annually.Considering the cost of converting existing products to "flex fuel" (a couple of hundred bucks), considering that GM just bought a chunk of an ethanol company, considering the federal fuel economy credits given to cars that will never touch a drop of corn juice, Bob's enthusiasm for E85 is no surprise.But that doesn't make it right. E85 is an unsustainable con that will collapse under its own weight. While you can’t blame GM for playing the con, why do I think they actually believe that ethanol is the answer?Electrically driven vehicles powered by lithium ion batteries represent the… future of the… industry. A year ago, everyone was saying, "What's GM doing with this car that's allegedly going to run on lithium ion batteries, which we all know won't work in a car?"We're still asking what GM's doing with the Volt. Despite all their promises, they've yet to come up with a viable battery for the electric – gas hybrid. This and other advancements may be years away, in reality, but we're going to be ready, because we're developing the vehicles [and] the electronic control technology… today. We are going to be ready, more ready than anyone else is going to be, when the battery technology is beyond what it is right now. A noble goal, indeed. But when tomorrow's batteries are ready, today's technology probably won't work with it any more than 1999's OnStar will work with today's digital cellular network. You're going to see, gradually but emphatically, the auto industry enter a whole new age. When this new age arrives, will GM be around to witness it? Either way, GM's future will be Bob Lutz' legacy.[The GM fastlane blog links to a pdf of Mr. Lutz' speech.]
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Stu Sidoti: "1:Removing barriers…Whenever some luddite threw up a block to an improvement based upon GM’s old ‘best practices’ or ’standard operating procedures’ so they could hide behind ‘the rules’ and not have to INNOVATE, Bob would have these little cards he would hand to the person or staff in question; on one side it would read (I’m paraphrasing) ” Who told you that?” and on the other side it would read ” Tell me why we can’t do it?” and if you got one of those little cards, you had to provide the answer that day…and once Bob had the answers he would have his staff review the reason ‘why not’ and if the ‘best practice or SOP’ needed to be removed or updated, it was. That simple act has been such a liberating force for the creative people within GM who for decades have had their hands tied by the old ways. He has always indicated that his main objective was to put in place a system of creating and developing products that encouraged people to participate in the creative process and by first removing a lot of barriers he has made more of a difference than you may be able to see right now, but this by itself, asking Who? and Why Not? has made a huge impact on the process and greatly improved the morale…Huge." Stu this sounds a lot like what I heard about Lutz when he was at Chrysler in the '90's (when Chrysler was a real auto company). If he had not fouled up his relationship with Lee he would have been CEO. You think GM is bad now, imagine GM without him and the products he has championed so far. Somehow I don't believe the burueacratic malaise at the Ren Center would have done better. On the Allpar site there is an interesting tidbit at the end of an article titled "Chrysler in 1992" that states that Lutz campaigned for the top spot in much the way that Lee did at Ford in the 70's. And like Henry II, Lee wouldn't let him have it. But instead of firing Lutz, Lee bought in an outsider (Eaton). It also mentions that 12 of the top design engineers quit after Eaton took over, all within a short period to time. Loyalty to Lutz, or the system he had in place, or both? Or an aversion to Eaton's more traditional executive policies?
I spent 3 years living in Italy in the earl 90's. Gas was then $4.75 a gallon. Gas is now about $8.65 a gallon. We drove cars with engines ranging from 500cc up to big engines like we have here in America. A 30 year old 2-cylinder 500cc was enough to push a mini-car to 50 mph with 2-3 people on board. A city car to be sure but exactly what a person NEEDED for traffic which was moving at 35 mph or less. My daily driver was then an early 70's VW Super Beetle with a fire breathing 40 HP. Despite being best suited for city car duty, I drove it from one end of the country to other several times in all weather. It was enough to go 75 mph on flat ground. My final car was a real step "up" in power and size. It was a nearly 200K mile '84 Rabbit convertible that had been everywhere. Factory delivery car that toured Europe and then spent years in America then returned to Italy in the care of the original owner, wrecked, sold to me, and repaired. It had a whopping 1.8L four cylinder (90HP) and would run 125 mph flat out. We drove the car on the autostrada on MANY, many trips to Rome and points north cruising at 100 mph. It's 0-60 times were prob about 10 seconds and it got about 35 mpg as I recall. It handled well, rode well, aged well, stopped well, and was a hoot to drive. My current '97 Cabrio is not much larger but it is about 800 lbs heavier. Not as tossable. Not as much fun. Much more comfortable on the highway of course and prob safer. Friends drove all manner of vehicles with small engines. My Italian friends did a better job of matching their needs to the vehicle they drove. Occasionally when they needed a larger vehicle they borrowed or rented one. When they needed something heavy moved for them they either had a brother-in-law with a van or truck or the paid for delivery. It just worked... Much cheaper than operating a large vehicle all the time. I like small cars and will welcome more and more of them on our roads here in America. I also mostly believe in consumer free-will and want to let economics help people choose what they drive BUT if the sky-is-falling crowd is to be believed, we need to be conserving what we consume. If nothing else Asian and India will vastly change what we can buy at current prices as they hit the roads by the millions. Despite being a gearhead all my life, from a family of high-powered street rods, I can't understand why folks feel they need to drive the current run of 300+ horsepower living rooms everywhere they go. Keep 'em for weekends and drive something cheaper (to buy and feed) the rest of the time. Save your money and buy a boat, or buy your kids a house when they get married (so they aren't paying a 30 year mortgage where the interest paid will roughly equal the principal. Then those kids if properly raised can go on to do the same for their children). The rest of the world is already paying the high prices, we will too - in a decade? Why not diversify our energy sources (wind, solar, coal, hydro, nuke) NOW and start changing what we drive NOW? Worst case I'm wrong and the air is cleaner. I don't know about you but I only go ~80 mph on the highway and ~40 mph in town. It doesn't take much of a vehicle to do this. I have been against against big government because of the waste that it creates but I am about ready for some fuel taxes to encourage folks to consider more efficient ways. If nothing else repeal tax breaks for oil companies and gas guzzlers...