Maximum Bob Signs Off

Edward Niedermeyer
by Edward Niedermeyer

[Editor’s Note: The following farewell message from GM Vice Chairman “Maximum” Bob Lutz was published today at GM’s Fastlane blog. In honor of Lutz’s larger-than life presence on the American auto scene, we are republishing his official goodbye in its entirety. Thanks for the memories, Bob!]

As I mark my last day at General Motors today, I want to say a special thank you and farewell to the loyal readers of FastLane. This blog would not have been the success it has become without you, and I’m sure you’ll continue to read the many interesting posts about GM and its vehicles that will follow on these virtual pages.

I leave here today knowing full well that this company is on the right track, especially in terms of the products, which pave the path to success.

Several reasons exist for my unbridled optimism, but the vehicles stand out above all others. The old film mogul Louis Mayer once famously said, “There’s nothing wrong with Hollywood a few good movies wouldn’t fix.” The same philosophy applies to automotive companies; the best vehicles win.

No automotive company has ever turned itself around without great cars and trucks, so it was obvious to us that we needed to strengthen the product line in all segments, and, over the course of the past several years, I believe we have done exactly that. Simply put, the cars, trucks and crossovers in GM’s lineup now, top to bottom, constitute the strongest roster it has offered in decades, if not ever. And the ones in the pipeline in the near-term are even better.

Creative authority was returned to the hands of the designers at GM, and we’re now seeing results in vehicles like the Buick Lacrosse, Cadillac CTS and SRX, Chevrolet Malibu, Camaro and Equinox and the GMC Terrain. All are doing well in the market, and are helping to revive the image of the four brands they represent. Those four brands are more than holding their own in the marketplace, proving the naysayers wrong who said eliminating half our brands would cost us a lot of market share. March was the sixth month in a row that the four brands collectively delivered a year-over-year retail sales increase.

Furthermore, all the key metrics used to assess the health of a brand are moving in the right direction. Incentive spending is down. We continue to close the gap vs. our competitors and make sales based on the wheels, not the deals. Our average transaction prices are up. Our residuals are up. And our inventories are way down, compared to where they were last year — some 340,000 units down.

And our quality continues to improve. Chevrolet is now on par with Toyota and Honda in J.D. Power’s Initial Quality Survey, something I hope will improve even further when the next study comes out. We’ve had a 45 percent reduction in warranty claims since 2007 and a 75 percent reduction in recall costs in the same time frame.

In 2009, according to NHTSA data, GM’s percentage of vehicles recalled vs. the total number of vehicles on the road was just 3.1 percent. Four manufacturers have larger numbers, and the top three are into double-digits.

Beyond the improved vehicles and quality, the bottom line is looking better too. This company, through the cleansing fires of Ch. 11, put itself in a position to succeed. Financially, our balance sheet is in the best shape it’s been in for quite some time.

We have an essentially debt-free balance sheet, and a new and more competitive labor situation. The “new” GM, in my view, is a powerhouse. We have good variable margins, which we’ve always had, by the way, but which were overpowered by massive fixed costs. At anything remotely resembling normal industry volumes, GM will be quite profitable. I’m not saying when… but rest assured it will be soon.

And another big reason I predict success for GM is the confidence I have in the people, and the senior leadership.

GM has always had great talent. It just didn’t always use it to its maximum potential. The people here are truly the best and brightest — I’ve known that since the beginning. Now the culture has turned 180 degrees since I returned here in 2001. It’s more product-centric than ever, and the focus on designing, building and selling the best vehicles in the world is razor sharp. This company is not set up to do a mediocre product anymore. Period.

I have faith that Ed Whitacre and his team know exactly what needs to be done to keep this company moving in the right direction. Focus on the products, keep things simple, boil the fat of unnecessary process out of the system. Tom Stephens, Mark Reuss and Ed Welburn have, like the CEO, an unwavering commitment to putting out one great vehicle after another.

The American jazz legend Charles Mingus once said, “Making the simple complicated is commonplace; making the complicated simple, awesomely simple, that’s creativity.”

That describes the approach the leadership of the new GM is taking perfectly. This business isn’t all that complicated. Do the best product you can do, and if it looks better and drives better than the other guy’s, you win.

I only have about 47 years of experience on which to base this opinion, but I believe GM is poised to win. Thank you very much for your terrific support.

Edward Niedermeyer
Edward Niedermeyer

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  • John Horner John Horner on May 03, 2010

    "Simply put, the cars, trucks and crossovers in GM’s lineup now, top to bottom, constitute the strongest roster it has offered in decades, if not ever. And the ones in the pipeline in the near-term are even better." And once again we have evidence of GM's problem, self-reference. Who cares if they are making the best vehicles GM has made? The real question is how they stack up against world-class competitors; not how they stack up against GM's former products. By the best-in-class measure, GM is still an also ran. Sure the GM pickup truck line is competitive, but Ford is the benchmark in pickups, not GM. Where is GM's response to the Transit Connect? Look at Europe: GM is getting killed across the board in Europe. Cadillac remains a pretender to the Standard of the World crown and never seems to manage having more than one decent selling product at a time. Chevrolet pitches the craptastic Aveo, the woefully uncompetitive Impala and North America's worst smallish pickup truck (Colorado). Even the mighty Corvette gets by mostly on brand and price. Meanwhile, Buick is a complete joke in the home market and GMC remains a Chevrolet with a nose job. May the best car win you say? By and large the best cars are winning, and very few of them sport the GM Mark of Excellence. Lutz may or may not have moved the needle a bit, but GM remains a global also ran in most segments. P.S. The Volt is going to wind up being just the latest in a long line of GM money pits.

    • Accs Accs on May 03, 2010

      Hmmm Then ya find out that one of the best "Buicks" is being rebadged as a DAEWOO. Its shit like that gives me no happy feelings about GM... tells me they are still up to their old tricks.

  • Skylinegtr02 Skylinegtr02 on Jun 25, 2010

    good riddance to the idiot obviously half the people on this form have not had to work on the crap, or have never owned one of the newer gm vehicles for more than 3 years. I have owned many gm products over the last 20 years i have had a 92 Saturn sl, a 93 Saturn sl, a 91 Chevrolet camaro convertible, an 00 gmc safari van, and a 01 Saturn sc. the older 2 Saturn sl's i believe were the best cars gm ever built no real maintenance other than oil changes and minor issues over the years i had about 360k miles on my 93 when it finally died and my 92 is still running with about 210k which i gave to my nephew. The camaro hasn't giving me many problems over the years. But the 00 van has giving me numerous problems many of which should have been recalled by gm for major safety reasons, but were recalled on similar models but not the safari, don't ask me how the got away with that crap anyway i have a van now that just suddenly decides to engage an abs event every once in a while when braking for no absolute reason even a low speeds which can be extremely hazardous when driving the only power door lock that works is the drivers side and the drivers side power window takes about 5 minutes to roll up. And from what I've heard from x Baltimore plant employees it is all the fault or faulty Mexican made wiring harness that management let these vans out the door with. The 01 Saturn was still about as good engine wise except for it would have an idling issue on cold days in the winter. but the interior quality went to crap with issues like a constantly leaking sunroof and finally a complete failure of the drive motor due to the crappy plastic they used to replace the rollers on the drive screws breaking. all as maximum bob tried to transform Saturn into a youth oriented car like Toyota's scion with cars like the ion red line that they eventually recalled because of problems with it catching on fire. now I'm living on a base here in Germany though i am down to three cars my 06 Honda civic hybrid which gets beautiful gas millage and i haven't had a single problem from yet. My 89 BENZ 300CE AMG which is built to survive a nuclear war and still can cruise easy at 120 on the autobahn once again even on a 20 year old car no issues at all. And finally my 02 Nissan skyline GT-R 34 V spec (Jap spec) which i would take up against anything. once again no issues other than regular maintenance. and not to mention all of the Opel's I've seen here which if it was not for their ties to gm i would by in a second. and ones like the Opel speedster which was replaced by the Pontiac solstice aka speedster gt. But once again i am stuck with another piece of Government motors garbage. I'm here in the states on business and my travel agent setup my rental car and everything but behold what do i get stuck at at the rental car agency a friggen Chevy hhr i was even joking with my friends before i came that if they try to give me a gm i would refuse it so now im stuck with this cramped underpowered piece of shissa for the next week. Speaking of which didn't maximum bob design the same pos in question. he ruined Chrysler in the 90's he ruined gm in the 00's i say good riddens and please don't ruin Benz, Honda, or Nissan for me next.

  • V16 2025 VW GLI...or 2025 Honda Civic SI? Same target audience, similar price points. Both are rays of sun in the gray world of SUV'S.
  • FreedMike Said this before and I'll say it again: I'm not that exercised about this whole "pay for a subscription" thing, as long as the deal's reasonable. And here's how you make it reasonable: offer it a monthly charge. Let's say that adaptive headlights are a $500 option on this vehicle, and the subscription is $15 a month, or $540 over a three year lease. So you try the feature for a month, and if you like it, you keep it; if you don't, then you discontinue it, like a Netflix subscription. In any case, you didn't get charged $500 up front the feature. That's not a bad deal.In my case, let's say VW offers an over the air chip reflash that gives me another 25 hp. The total price of the upgrade is $1,000 (which is what a reflash would cost you in the aftermarket). If they offered me a one time monthly subscription for $50 to try it out, I'd take it. In other words, maybe the news isn't all bad.
  • 2ACL A good car, but - at least in this configuration -not one that should command a premium. Its qualities just aren't as enduring as those of Honda's contemporary sports cars. For better or worse, this is a formula they remain able to replicate.
  • Jalop1991 I just read that Tesla's profits are WAY down "as the electric vehicle company has faced both more EV competition from established automakers and a slowing of overall EV sales growth." This Cadillac wouldn't help Tesla at all, but the slowing market of EV sales overall means this should be a halo/boutique car. Regardless, yes, they should make it.
  • FreedMike It's just a damn shame that Alfa never conquered its' quality demons in time for the Giulia and Stelvio to hit the market - these are loaded with personality, and we need more product like that.