By on January 13, 2009

“I’ve never quite been in this situation before of getting a massive pay cut, no bonus, no longer allowed to stay in decent hotels, no corporate airplane,” GM Car Czar Bob Lutz tells NPR radio. “I have to stand in line at the Northwest counter. I’ve never quite experienced this before. I’ll let you know a year from now what it’s like.” Hopefully not. Meanwhile and before that, Maximum Bob was busy comparing the Chevy Malibu to the VW Phaeton. On one level, I’m down with that. The VW Phaeton was a stunning car, in an absurdly misbranded, high-tech kinda way. I mean, we’re talking about a vehicle that automatically adjusts the angle of its sunroof at speed to protect occupants from sonic distress. But during his don’t call it The Detroit Auto Show interview, GM Car Czar Bob Lutz proudly reveals that the Chevy Malibu took its styling cues from the ill-fated Phaeton. What styling cues? Of course, there’s more Maximum Bobage to be savored here.

“Back 15 or 20 years ago, it was the people who really knew about cars and knew what they were doing who made those [American car dissing] statements,” Lutz tells the taxpayer-supported radio network. “And then it filters down to the less and less knowledgeable. And now the whole cycle is starting again at the top, where the knowledgeable people who truly understand the business now say the new range of General Motors cars are probably the best vehicles of their types in the world. And that’s going to trickle down — but it takes time.” Surprisingly (or not), Bob dismisses the possibility of advertising as the solution to Ye Olde (new?) Perception Gap…

“Frankly we don’t do enough [advertising],” Lutz insists. “We just can’t afford it right now. And there is not enough, not enough advertising dollars in the world to change the perception of people who are absolutely locked in and basically lock you out.”

But, apparently, the Malibu is “still gaining momentum.” “It is an extremely well-accepted car.” Not well accepted enough, Mr. Bond. And let’s see those hotel receipts, please.

[thanks to Pete Connor for the link]

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41 Comments on “Bailout Watch 338: GM Car Czar Stays In Lousy Hotels, Flies with the Rabble...”


  • avatar
    klossfam

    Maximum Bob may be a “car guy” but he is total d-bag and a good example of why/how the Big 2.8 got to where they are today. He is, however, entertaining in a “This guy is really a TOOL” sort of way.

  • avatar
    Richard Chen

    The current Malibu’s greenhouse is a clone of the VW Phaeton’s, and very similar to the prior Acura TL. Sounds better to say you’ve copied from the Germans, right?

  • avatar
    guyincognito

    Too bad Bob doesn’t know about the secret check-in line behind the smoked glass doors to the right of the Northwest counter…

  • avatar

    Can’t afford advertising? Isn’t that how other companies have died? Oh yeah…….

    John

  • avatar
    KixStart

    See that, Maximum Bob? [rubbing finger and thumb together] It’s the world’s smallest violin playing the world’s saddest song.

    There’s quite a few people at GM, talented people, good people, honest, self-effacing people, who did their jobs well and are still getting cut loose with zilch because YOU didn’t do your job well.

  • avatar
    psarhjinian

    “I’ve never quite been in this situation before of getting a massive pay cut, no bonus, no longer allowed to stay in decent hotels, no corporate airplane,”

    Part of me wants to be annoyed by this, but if you’re paying the man millions of dollars to sit in line at the counter, you’re not getting your money’s worth. Corporate jets exist to maximize the time of very highly paid people.

    Now, whether or not you think Bob is fairly compensated is another topic entirely.

    Surprisingly (or not), Bob dismisses the possibility of advertising as the solution to Ye Olde (new?) Perception Gap…

    He’s right, in a way. Advertising alone won’t change things. You have to build trust, and advertising is all about, quite frankly, lies and deception.

    Customers know this.

    “Frankly we don’t do enough [advertising],” Lutz insists. “We just can’t afford it right now. And there is not enough, not enough advertising dollars in the world to change the perception of people who are absolutely locked in and basically lock you out.”

    And here’s where he’s wrong, and in a bad way. As is typical for GM, he sees the perception gap as the customer’s problem, not GM’s. News to Bob: it is GM’s problem to fix, and you’re not going to fix it by talking down to your customers, or blustering about how you’re better now.

    The “Surprised?” campaign is evidence of this kind of bitter, customer-blaming myopia.

    Bob, let me tell you this: if you want to get customers back, you need to build trust. To do that, you need to stand behind your product. Cost-offset scheduled maintenance, long and comprehensive warranties, and a system where customers can get satisfaction if they feel they’re being Goodwrench’ed, either by backstopping your dealers when they come claiming for warranty work, or allowing your customers to go over your service department’s head for authorization.

    Hyundai did a lot of this, and they’ve shed more negative perception than GM could ever dream of.

  • avatar
    klossfam

    I personally like the “still gaining momentum” comment…Of course, in this economy, gaining momentum could mean you sold 2 Malibu’s east of the Mississippi and 1 West of the Rockies…I’ll admit the ‘Bu is a solid choice vs a Cam/Cord/Nata, however…

  • avatar
    Bancho

    Why couldn’t they have copied the Phaeton’s grill while they were at it?

    Like psarhjinian said, the “Surprised” campaign comes off as bitter and condescending, especially the one where they cherry picked a performance model of the MINI to compare to the Hybrid Escalade. This series of commercials alone has turned my opinion of GM more negative (I didn’t think that was possible so I was indeed “Surprised ™ “).

  • avatar
    PeteMoran

    Another from the NPR transcript, how’s this one;

    “Our history has been our plans were always too grandiose, and then we built too many cars and then you have to incentivize them to get rid of them, and that destroys the value of the car. It’s much better to be behind demand and trying to catch up than the other way around.”

    Bob! You think so??????????????????????

  • avatar
    M1EK

    Part of me wants to be annoyed by this, but if you’re paying the man millions of dollars to sit in line at the counter, you’re not getting your money’s worth. Corporate jets exist to maximize the time of very highly paid people.

    This holds true as long as the highly paid person isn’t going to Washington to beg for taxpayer money. Get real. An occasional exposure to how the other half lives can only improve things for our privileged classes.

  • avatar
    sean362880

    Richard Chen :

    The current Malibu’s greenhouse is a clone of the VW Phaeton’s, and very similar to the prior Acura TL. Sounds better to say you’ve copied from the Germans, right?

    Well, they did a crappy job of it. Not to say that the Malibu interior isn’t impressive, it’s just not at all similar to the Phaeton’s.

    http://autos.msn.com/research/compare/photocompare.aspx?c=0&n=3&i=8&tb=1&ph1=t107005&ph2=t101793&dt=0&v=t107005&v=t101793&v=t106992&r=1

  • avatar
    TEXN3

    I wonder if a DoubleTree or Sheraton is considered low-class? And standing in line for first-class must be very tough…I just can’t bear having to sit in business class sometimes, knowing there is a crying baby 50ft behind me!

    Definite similiarity in the rearend…which is what you usually see first at the rental car parking lot.

  • avatar
    Richard Chen

    @sean362880: look at the (exterior) side profile, especially above the beltline

  • avatar
    hwyhobo

    psarhjinian wrote:
    if you’re paying the man millions of dollars to sit in line at the counter, you’re not getting your money’s worth

    If they are idiots, you are better off idling them, so they can do as little damage as possible. Best yet, he, RW, and a few others should have been fired long time ago.

  • avatar
    ra_pro

    “I’ve never quite been in this situation before of getting a massive pay cut, no bonus, no longer allowed to stay in decent hotels, no corporate airplane,”

    That quote tells one all one needs to know about the social, economic and political situation in Detroit and why Detroit will not survive. Not unless they have managers who don’t think of themselves as being special and above all the working working people they work with. Because of comments like these I no longer think bailing Detroit is possible. I think the only thing that can save Detroit now is Chinese (communist) ownership where everybody is more or less equal to everybody else socially.

  • avatar
    yankinwaoz

    He is right. All the advertising in the world isn’t going to change minds….

    So that being said, take your advertising budget and back your cars with the best no-BS warranty on the market. Make sure the the dealers no longer screw over YOUR customers.

    Then you will rebuild your reputation, one customer at a time.

  • avatar
    mcs

    Part of me wants to be annoyed by this, but if you’re paying the man millions of dollars to sit in line at the counter, you’re not getting your money’s worth. Corporate jets exist to maximize the time of very highly paid people.

    It doesn’t work that way. If they can’t afford the extra time to have an exec traveling commercial, then don’t send him on the trip in the first place or he has delegation issues.

    When you’re in that type of position, there is a hierarchy of minions running around doing the minute by minute work. You usually have a personal assistant as well. You get paid for directing the minions and making the big decisions. At that level, if his staff can’t live without him for the time it takes to get on the plane, he needs new staff.

  • avatar
    AKM

    Part of me wants to be annoyed by this, but if you’re paying the man millions of dollars to sit in line at the counter, you’re not getting your money’s worth. Corporate jets exist to maximize the time of very highly paid people.

    This holds true as long as the highly paid person isn’t going to Washington to beg for taxpayer money. Get real. An occasional exposure to how the other half lives can only improve things for our privileged classes.

    Yup. And also as long as the highly paid exec is worth what he’s paid. If he’s running his company into the ground, I don’t see the point of giving him MORE time to do that.

  • avatar

    It’s all really depressing.
    It’s not as if they weren’t told things were headed south and fast. And now, post-polyanna, they’re pretending to be surprised by developments.

    Why doesn’t Bob fly his Alfa trainer jet wherever he needs to go? Put some hours in his logbook, that should do the trick.

    GM really, really doesn’t need Lutz.

  • avatar
    Geotpf

    There’s a simple solution to GM’s problems:

    Improve reliability on all (not just some, all) of their vehicles until the pages in Consumer Reports reliability report for Chevy and Pontiac and Caddy and Buick and Hummer and GMC and Saab and Saturn are seas of little red circles like the pages for Toyota, Lexus, Honda, Acura, and Subaru are.

    Wait five to ten years.

    Problem solved.

    Of course, they don’t have five or ten years and don’t know how to build cars as reliabile as Honda/Toyota/Subaru, so there is no solution. At all.

  • avatar
    mikey610

    He has become every American’s stereotype (at least those who bother to think about it) of a domestic auto company executive.

    The more he talks, the more he reinforces those opinions. Not helping.

  • avatar
    NickR

    And there is not enough, not enough advertising dollars in the world to change the perception of people who are absolutely locked in and basically lock you out.

    Regrettably, he is right. I am somewhat willing to give the Big 2.8 a chance, as I do believe they have improved. But I have to reconcile the value of their recent models with a lot of bad memories. Most people don’t bother. Their list of target cars never extends as far as the north american brands (unless they are looking for high performance in which case the ‘Vette is usually a candidate).

  • avatar
    mtypex

    I find Bob hilarious! I wonder if they can put him on a regular talk radio program, so I can listen to him as I pilot my Acura down the expressway.

  • avatar
    pharmer

    Sad. I wonder if he knows how regular people actually use cars?

    They should make him rent cars, too. Maybe then he’d understand a little bit about how undesirable the rental fleets make their cars look, or how poorly they age when driven by a different person every other day.

  • avatar
    70 Chevelle SS454

    I’ve met Bob Lutz, and listened to him explain his vision of the future of GM and the industry.

    If GM is relying on him to turn them around, they ought to also be preparing for Chapter 11.

  • avatar
    psarhjinian

    It doesn’t work that way. If they can’t afford the extra time to have an exec traveling commercial, then don’t send him on the trip in the first place or he has delegation issues.

    When I started out as a young analyst, it was made very clear to me that you do not waste the time of senior partners who bill out at hundreds of dollars per hour. Any time they’re not doing billable work, they’re effectively costing the company money.

    The same applies to executives. When you’re dealing with someone who makes forty thousand dollars a day, you want maximize the amount of time they’re doing useful work. Whether you think Bob Lutz is useful is another topic, but I wouldn’t want my upper management idling.

    This is why I have a Blackberry stuffed to the gills with admin tools, two laptops, three WAN cards and enough batteries to power a Prius: I’m paid to crank out work wherever possible. I can reboot half a server room from an airport lounge, and I’m paid less money in a whole year than Rick Wagoner makes in two days. I’d expect the same of someone like Wagoner or Bob Lutz: that they’re given the opportunity to earn their compensation.

    Again, the point isn’t whether they’re worth it, or if you’re actually better off keeping a loose cannon like Lutz as inactive as possible, it’s that his time does cost money.

  • avatar
    jthorner

    Aw, poor Bob has to stand in line for his seat on the plane. WAKE UP IDIOT! You have been one of the Masters of the Universe of Detroit during its long decline from Top Dog to Beggar.

    You think you are suffering? How about all of the screwed over customers and employees you and your gang have left in your prodigious wake?

    As far as the executive time thing goes, at Bob’s level it is about leadership and decision making, not about maximizing billable hours. In a crisis, living like the regular folks do and not complaining about it is AN ACT OF LEADERSHIP. Assuming ol’ man Bob has kept pace, he can use his Blackberry to stay in touch and keep providing those best in class decisions he is getting paid to make even while on the road. Sure you have to turn it off in the plane, but that then provides time for reading and introspection outside the office noise …which is also essential to great decision making. Finally, there are excellent networking and intelligence gathering opportunities available from those first class airline seats.

  • avatar
    KixStart

    psarhjinian: “Part of me wants to be annoyed by this, but if you’re paying the man millions of dollars to sit in line at the counter, you’re not getting your money’s worth. Corporate jets exist to maximize the time of very highly paid people.”

    I disagree… The top execs all should be functioning strategically nearly 100% of the time. They can do that anywhere, from the crapper to the boardroom. If they must fly somewhere quickly, for some kind of crisis management, they have other issues with their organization and flying there won’t help. Wagoner can’t afford to be out of communication for very long but he shouldn’t need to be in any particular place at a moment’s notice, either.

    The jet’s a perk, pure and simple. And GM had 7 of them, and they (and Ford’s I do believe) spent a lot of time on leisure travel and commuting duties. That’s not productive.

  • avatar
    CamaroKid

    psarhjinian: “Part of me wants to be annoyed by this, but if you’re paying the man millions of dollars to sit in line at the counter, you’re not getting your money’s worth. Corporate jets exist to maximize the time of very highly paid people.”

    He probably did less damage to the company doing nothing standing in that line then he has in the past 5 years working hard behind his desk.

    I’ve been in a Corporate Jet… They are not about saving time. They are about being pampered and having you butt kissed. I’ve done the business case for a CEO who wanted a private jet. Even at Lutz and Rick Salaries these Jets DO NOT have a positive business case.

    Wanna skip the line, fly first class.

    I’m sorry Lutz that you feel so “unwashed” now… welcome to the real world.

  • avatar
    HeBeGB

    I wish we could get rid of the term “Perception Gap” and just replace it with “Reputation”. Move it from being the customers error to the companies responsibility. Maybe then they’d understand how quickly you can lose it and how long it takes to get it back.

  • avatar
    Lokki

    As is typical for GM, he sees the perception gap as the customer’s problem, not GM’s. News to Bob: it is GM’s problem to fix, and you’re not going to fix it by talking down to your customers, or blustering about how you’re better now.

    That’s it, in a bucket. I’ve wanted to buy a Detroit car since the 1986 Taurus – the last time they really reinvented themselves. I always decide to wait another year or two, and another year or two later, I’m always glad that I waited. Where’s the evidence today that GM has changed?

    Here’s the situation you face if you buy a GM car today – given the best of circumstances and assuming that GM survives and prospers:

    When you go to sell it or trade it in 2012, the market will be flooded with other GM cars of the same age that people bought cheap, and you’ll get nothing for it. Additionally, the new cars from the reinvigorated GM will be so much better that people will be willing to pay more to get one of them rather than the old technology that you’re peddling in your used Buick.

    I think I’ll wait another year or two before I consider GM.

    Now, if they took that Government money and used it to extend their warranty period for a few additional years….

  • avatar
    Ingvar

    “I wish we could get rid of the term “Perception Gap” and just replace it with “Reputation”. Move it from being the customers error to the companies responsibility. Maybe then they’d understand how quickly you can lose it and how long it takes to get it back.”

    That is in fact quite interesting. I have never thougt of that. But of course, somewhere, somehow, some spinmeister must have thought that up. “We don’t have a bad reputation, though there are some issues with a perception gap”. I can’t believe I fell for their newspeak. Incredible…

  • avatar

    I guess Bob hasn’t figured out that GM employees can use Northwest’s secret “preferred customer” check-in counter at DTW… although Delta will probably put the kibosh on that.

  • avatar
    fahrkultur

    Malibu vs. Phaeton? Not a fair comparison. The Phaeton is probably the best built car in almost any price class (take a 12 cylinder W12 engine model and you get a Bentley GT without the turbo charger). Due to badge snobbery it never caught on, excellent news for anybody shopping for a used one. Why waste time with plastic if you can have the real stuff?

  • avatar
    Chris Inns

    Maybe having Bob Lulz fly commercial airlines and stay in “non decent” hotels does waste a little of his “valuable” time, but the entertainment value of watching him forced to sort of live like an everyday prole more than compensates.

  • avatar
    cleek

    HeBeGB :
    January 13th, 2009 at 2:16 pm
    I wish we could get rid of the term “Perception Gap” and just replace it with “Reputation”. Move it from being the customers error to the companies responsibility. Maybe then they’d understand how quickly you can lose it and how long it takes to get it back.

    BINGO

  • avatar
    TheRealAutoGuy

    I would humbly suggest listening to the link before judging.

    You can literally “hear” him smiling as he says his bit about travel. At the end of the part where he talks about the hotels, etc., he even laughs. It’s clear he’s making a point about how much things have changed at GM, and that they’re operating in a new period of austerity.

    Spoken words often sound different than written words, by the way.
    This case is a good example.

    Yes, I’m sure Bob is using the GM check-in counter in Detroit. The cost of that “perk” is born by Northwest, by the way, not GM.

  • avatar
    factotum

    That’s a new one: trickle-down quality. Just when you thought it couldn’t get any more bizarre.

  • avatar
    Areitu

    “Frankly we don’t do enough [advertising],” Lutz insists.

    Maybe if they advertised right…

    The Volt and Camaro are so hyped up from last year’s media blitz, you’d think the cars were already out.

  • avatar
    mikedt

    Bottom line, Bob. If you want me to believe GM makes the best/most reliable cars, put your money where your mouth is and give me an extended warranty. After all, if you’re telling me the truth it shouldn’t cost you anything. Until then I have to go with my gut, conventional wisdom and anecdotal evidence.

  • avatar
    357Sig

    GM must have a Phaeton in its design studio as inspiration. The Buick Lucerne also looks like a close cousin of the phaeton. In fact, everything rear of the front wheel on the Buick Lucerne is literally a tracing-paper copy of the Phaeton.

    The interior is also a clone, some parts more than others. If imitation is indeed flattery, VW’s got to be blushing.

    Here’s a comparison…. Need I say more.

    http://autos.msn.com/research/compare/photocompare.aspx?c=0&n=3&i=0&tb=0&ph1=t107081&ph2=t100133&dt=0&v=t100133&v=t107081&r=1

    It’s too bad that the americans are such brand snobs and that VW didn’t dedicate the $$ necessary to properly advertise the Phaeton. Oh, yes and lets not forget that some of VW’s dealers were a little uncomfortable selling a $100,000 car (in the case of the W12).

    The Phaeton is still selling quite well in the rest of the world, with a much larger selection of engines than were offered in the USA. The V10 Twin Turbo Diesel will move the car (which weighs in about the same as a Chevy Tahoe) almost as quicky as the the W12.

    For 2009, the Phaeton has had a few minor upgrades, but essentially remains unchanged from what was (unsuccessfully) sold here in the USA for the model years 2004, 2005 and 2006.

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