Topic: Lutz to Retire

[DockMan]

GM's Latest Challenge: Losing Lutz
Bob Lutz announces his retirement. Without its legendary product czar, will GM continue to push exciting new designs?

By David Welch

It will soon be the end of an era, not just for General Motors (GM) but for the entire auto industry. At the close of this year, GM's car czar—the charismatic and controversial Robert A. Lutz—will retire.

GM announced the decision Monday morning, Feb. 9, naming Thomas G. Stephens, who heads up the automaker's engine and transmission works, as Lutz's successor in the job of vice-chairman of global product development. Stephens will take over on Apr. 1, when Lutz moves into an advisory role.

Lutz, who turns 77 on Feb. 12, said he told Chairman and CEO G. Richard Wagoner Jr. last fall that he would take a smaller role starting this year. At his age it was time to slow down. But a bigger tipping point for Lutz was the government's increasingly hands-on role in how cars will be made. Lutz said he was looking ahead at engineering and designing new cars to meet tougher government-mandated fuel economy rules rather than strictly to spark passion among car buyers—and thought it would be a good time to start moving out. "What I have proven to be best at is the psychological and emotional end of the business, designing what people want," Lutz said in an interview. "We're seeing an increase in regulation. This is one reason I think it will be a good time to retire. I won't have to worry about that stuff."

One GM manager who is close to Lutz said the legendary car guy also wanted some time to himself to fly his plane and ride motorcycles—both lifelong passions.

Insiders say Lutz is still a very effective executive. For his career longevity, he credits a healthy diet that excludes red meat. But some say that at his age he was beginning to slow down. And the job is a demanding one. Overseeing product development all over the globe, Lutz spent a lot of time reviewing new models in GM's far-flung operations. In 2007 he logged four times the air travel of CEO Wagoner, according to the company's proxy statement.
Design Renaissance

When Lutz leaves at the end of the year, Stephens will have big shoes to fill. Under Lutz, GM embarked on a design renaissance that pushed through some strong new models with sharp designs such as the Chevrolet Malibu, Buick Enclave, and Cadillac CTS. GM also got in step with better cabins and interiors as the company quit cutting corners on things that delight car buyers the most. During an interview in 2003, about two years after Lutz took over, he told BusinessWeek his new rule was: "No more boring cars."

Stephens, a career engineer, will have to pick up Lutz's push for style and his ability to ram projects through GM's bureaucracy. But at least he has the rank of vice-chairman to give him clout. And in a regulatory-driven car business, Stephens may have the right résumé. He's an engine guy with a slew of classic cars in his garage. At the same time, he has been a key player in the development of GM's hybrid technology and the company's efforts to meet fuel economy rules.

The Malibu may be the most significant car Lutz spearheaded. The design was progressive, and in many ways the family sedan was best in class. Before the car market tanked, Malibu sales were way up over its boxy predecessor, and the new car sells for about $3,000 more than the old one did. "Without Lutz, they wouldn't have cars like the Malibu," says James N. Hall, principal of 2953 Analytics, an auto industry consulting firm. "The Malibu would have been the most milquetoast car. Lutz made GM stretch."
Some Bad Moves

He had some losers, too. Lutz hoped the Saturn Sky and Pontiac Solstice two-seat roadsters would resurrect both brands. Neither did, and they lost money. His love for sporty rear-wheel-drive cars led to the Pontiac G8, another weak-seller. And when he put an SUV nose on GM's old minivans earlier in the decade, the low-budget move bombed.

But the improvement in quality of interior and design has shown up in other models, such as the Enclave and its siblings, the GMC Acadia and Saturn Outlook crossovers, not to mention the forthcoming Chevy Equinox midsize SUV.

Lutz also pushed through big spending for the Chevrolet Volt electric car. It took even his maverick style and cult of personality three tries to get GM to green-light the project. When it hits the market in 2010, it could be a talisman for the Chevy brand and proof that the automaker can play in the advanced technology game.

Still, for all that Lutz did, GM will need to prove that even without his forceful personality it can continue to bring better styling, craftsmanship, and new ideas to market. Hall says GM has institutionalized better execution in engineering and design. But Stephens will still have to get finance and purchasing to loosen the purse strings to make better cars. "Lutz worked because he punched holes in the company's autoimmune system," Hall says. "The problem comes in when doing the right thing is a lot more expensive."

Lutz says that GM should be well prepared after he is gone. During his tenure, he changed GM's new-car development process to start with design first. The company's design department would create a product vision aimed at catching eyes and then start making the compromises for, say, better headroom, more cargo space, better fuel economy, and the like. "It's now institutionalized that we start with an aesthetic vision first," Lutz says, "as opposed to the old system of starting with an analytically designed vehicle and letting the designers gift wrap it." So long as GM keeps that process, Lutz says, styling will continue to improve even after he retires.

When Lutz does take the exit ramp at the end of the year, the industry will also lose one of its most colorful executives. He had a knack for making headlines throughout his career. Lutz infuriated his old Chrysler boss Lee Iacocca when he referred to Fiat (FIA)—which Iacocca was courting for a merger—as a "dead bride."
Controversial Moments

Wagoner has also had to distance himself from Lutz's very public dismissal of global warming, which he once called "a crock." Lutz also said that forcing automakers to build fuel-efficient cars through regulation—instead of consumer-based incentives or taxes—was tantamount to curing obesity by forcing clothing makers to produce only small sizes.

But he also had a knack for making exciting cars. Lutz started his career in GM's European business in 1963, where he gets credit for a leading role in developing some of Opel's better designs. He then went to BMW (BMWG) and later Ford (F), where his knack for spotting smart styling and pushing it through bureaucracy got him a reputation as a car guy, a macho designation for executives who know how to make cool cars.

He made a big mark at Chrysler, from 1986 to 1998, when he spearheaded some hot models for Jeep as well as the PT Cruiser. After he departed when Daimler (DAI) took over Chrysler, Lutz piloted failed attempts to restart Indian Motorcycles and an ultraluxe car company using the Cunningham name. He also had a few tumultuous years running Exide Technologies (XIDE), a battery maker.

That's when Wagoner picked his brain in the summer of 2001 at the behest of former GM and Ford CFO John M. Devine. Wagoner met with Lutz and asked him who would be the next Lutz to take over product development at GM. Lutz, then 69, said, "Don't assume it isn't me."

Now GM, and in some ways the industry, will be trying to see if they can come up with the next Lutz.

Welch is BusinessWeek's Detroit bureau chief.

http://www.businessweek.com/bwdaily/dnflash/content/feb2009/db2009029_162350.htm?campaign_id=rss_daily

[DockMan]

Thank God he's leaving, bring me back the beautiful exteriors of the Aztek and the 1st Gen. Avalance - more TPO exterior panels for all.

Lord, I hope the new guy is decent.

[Honda Owner]

If Lutz would only go today. Here is a guy who has run several car companies into the ground with product people won't buy but magazines love. He gave us the Camaro when we wanted a Yaris beater. Brilliant! And people still defend this!

But he has to wait until the end of the year so he can negotiate his golden parachute. He also has to buy JP4 futures for his two jets.

[ovr50]

Makes sense to me because:
1. Lutz is a "car guy" who will not enjoy presiding over a reduced size, reduced product, no "pizazz" type of company. The chemistry is wrong.
2. Lutz is 77 years old. Why not quit now?
3. I'm sure Lutz has enough/plus will have his "leaving" package, in order to live as well as he wants to for the rest of his time.

GM will need a more bank/finance/work-out type of guy/gal to run it for the next number of years. It will be about survival, not the lastest and fastest product.

I think I'd leave too, if I were Lutz. Makes sense to me.

[safristi]

... that's SO AGEIST Ov'r.................. ....next time yer on my BUS yer payin FULL FARE..................

[dougjp]

Ovr, sadly you hit the nail on the head. The executive of future vehicle producers at this point looks to be a bean counter greenie that only a Pelosi could love. Forget what people actually want to buy, forget 'desire' and 'emotion' in buying vehicles, people will be told what they want to buy. Its a sick feeling but it happened before and this goes in cycles. For example, remember the garbage that was produced in the post gas crisis days in the mid 70's. 

[Careener]

Not being one to go quietly he has posted to GM's Blog.

You’re Not Rid Of Me Yet

By Bob Lutz
GM Vice Chairman

By now you may have heard the news that I have given up the duties of leading General Motors global product development.

Please note that I relinquish these responsibilities secure in the knowledge that the guiding philosophy of pursuit of absolute product excellence is now firmly embedded in the organization. That unquestionable fact made a very difficult decision much easier for me.

I feel very comfortable handing over the keys to Tom Stephens, and his new role makes perfect sense given that GM is preparing to integrate its Global Powertrain Operations into the Global Product Development organization. Tom will do a great job ensuring the continued excellence of GM’s new cars, trucks and crossovers, and he has a great team already in place to help, led by Ed Welburn, Jim Queen, John Smith and Jon Lauckner.

There has been speculation that I would stay until the debut of the Chevrolet Volt next year. When I do retire at the end of this year, the Volt program will be well on its way to launch and I’ll feel the same sense of pride and accomplishment that the entire Volt team will feel when the first ones are silently rolling off the assembly line.

So I’ll be around the rest of the year, helping with the transition and acting as senior advisor to Rick Wagoner, and I’m sure you’ll read further updates in this space about how it’s going. Most importantly, I remain as confident as ever in the future of General Motors and the continued excellence of its products. And you’ll see even more evidence of that as the next few years unfold.

http://fastlane.gmblogs.com/archives/2009/02/youre_not_rid_of_me_yet.html

[articsteve]

Lutzo has seen GM's books, industry projections, and the futility of the Volt as a financial success.  When GM files for Chapter 11 it won't look that he's running away since he made the announcement so early.

[Leviathan]

 

[articsteve]

I remain as confident as ever in the future of General Motors and the continued excellence of its products. And you’ll see even more evidence of that as the next few years unfold.

One thing you can't take away from Lutzo is he is one fantastic pitchman.

[ovr50]

I remain as confident as ever in the future of General Motors and the continued excellence of its products. And you’ll see even more evidence of that as the next few years unfold.

One thing you can't take away from Lutzo is he is one fantastic pitchman.

I hope he is right, but there is not much else he can say right now as he will be there the rest of this year. Hopefully, he will publish a book of his experiences, and then he can let it all hang out. I would certainly buy a copy.

[Trainman]

Ovr, sadly you hit the nail on the head. The executive of future vehicle producers at this point looks to be a bean counter greenie that only a Pelosi could love. Forget what people actually want to buy, forget 'desire' and 'emotion' in buying vehicles, people will be told what they want to buy. Its a sick feeling but it happened before and this goes in cycles. For example, remember the garbage that was produced in the post gas crisis days in the mid 70's. 

Except for car enthusiasts (ie autosexuals) who has "desire" and "emotion" for a vehicle?  My wife does not nor do most of my friends.  So a bean counter type may be the best thing for GM right now. Autosexuals are in the vast minority when it comes to car ownership and GM can not afford to meet their/our desires right now.

[ovr50]

Lutz won't be the only one leaving GM. Apparently, a news story this AM in the Detroit News claims the guy in charge of NA dealerships is leaving also.

Additionally, GM is cutting 10,000 of it's 73,000 white collar jobs (worldwide) per the following Detroit News story:

http://www.detnews.com/apps/pbcs.dll/article?AID=/20090211/AUTO01/902110387/1148

No real surprise in all this stuff, as GM has now less than a week to present it's Plan to the US govt on how it can remain viable and avoid bankruptcy (which is still a real possibility per news stories).

GM may be re-named "Congressional Motors"  - no wonder Lutz wants out.

Sure be nice to have some good news one of these days........

[Leviathan]

I don't blame him for wanting out of the whirlwind...

Sure be nice to have some good news one of these days........

From and interview that was posted on a number of sites including Autoweek

You had said you wanted to stay on at GM to at least see the launch of the Chevy Volt plug-in hybrid in 2010. Why the change of heart, given the importance of the Volt to you?

That was the intent at the time. First of all, it's well on track. We will be driving finished Volts this summer because we'll have a lot of them through the tail end of this year and next year. So in terms of low-volume production, we'll be producing them, we just won't be selling them. As far as I'm concerned, the Volt is done.

That's some Voltastic news right there!

[Honda Owner]

Let's face it, Lutz was yesterdays' man, the while belt and loafer generation. Just him being at GM is a sad comment on what was once and industrial powerhouse. GM is so completely misguided that it would be comedy if tens of thousands of people were not losing their jobs. It is all so simple and yet so many don't get it:

Product

Product

Product

And speaking of product:

That's some Voltastic news right there!

These cars will be AT LEAST $40,000 in the USA and more like $50,000 here. How many are going to be moved? How much profit per unit is there in them and overall profit? Can GM afford this kind engineering outlay when it is all but bust? Wouldn't it be a better investment to design and sell a car that is as good as a Corolla and sell it for less. For this kind of money, GM could have done just that. This company laid off TEN THOUSAND while collar workers yesterday and you can bet lots of them were engineers. It is amazing just how clueless GM and its devotees (who don't buy them anyway since they can't afford you) are.

Here is my favourite line from GM devotees: "Their new stuff is much better." First, their products should have never have got this bad to begin with. Second, the "new stuff" hasn't had the time to self destruct yet. Tell me your 2009 GM car is wonderful five years from now and back it up with hard data and I will believe you.

[articsteve]

That's some Voltastic news right there!

 

[articsteve]

These cars will be AT LEAST $40,000 in the USA and more like $50,000 here

That is correct.  I watched a feature interview with Lutz where he said he hoped to bring the Volt in at 40K USD, but thought 50K would be more like it. 

Then he went on to say that it would lose money in the first year or so.  Well those "or so" days are over.  It's a ridiculous car considering most manufacturers are working on the very same thing but in the less opulent range.

[initial_D]

What is the point of having an electric car costing over $40,000? Green Messenger?

[Leviathan]

Eh, $40k for version 1.0 of the technology and they'll sell everyone that they make in the first years. GM can do no right: gas is > $4 "Why is GM building gas sucking SUVs". gas is <$2 "Why is GM wasting time on a car that uses little to no gas" 

[DockMan]

I'm sure the same kind of savvy  folks who buy Prius' will dole out the cash for the car. More of these on the road means proliferation of the technology that hopefully gets cheaper with time and economies of scale. When it finally makes financial sense to own a hybrid.....I'm sure I will buy one.