The new cars and trucks coming out ofthese days are amazingly good. Three years ago you couldn’t make a statement like that.
The credit largely goes to Bob Lutz, GM’s vice chairman of global product development, who was brought in to fix the system in 2001.
But Lutz didn’t do it alone. Ed Welburn’s design team is crafting beautiful bodies and interiors. Jim Queen’s engineering organization is developing them to high degrees of refinement. Tom Stephens’ powertrain group is fitting them with silky-smooth engines and transmissions.
Gary Cowger’s manufacturing staff ensures the product is coming down the line at the highest levels of quality and efficiency.
And that’s where the problem starts. The thinking inside GM these days is, “Everything is running so well, why do we need Lutz’s position anymore?”
I’ll tell you why. In every major corporation the financial people have more power than anyone else. They have their hands on all the money, and if they don’t like what you’re doing, you can’t get any. And that’s why you need a car guy who outranks them.
Finance staffs are really good at capturing all the costs that go into making an automobile. But they don’t have a system that’s good at capturing value. And perceived value is what customers really pay for.
That’s where a car guy like Lutz comes in; someone who intuitively knows what makes a great car. One small example: How many times has a new vehicle debuted with a cheap plastic interior because an auto maker needed to shave cost off a program?
And yet, that cheap interior never saved a dime. It made the car look so tacky, it took $3,000 in incentives to lure people into buying it.
Good car guys know how to prioritize trade-offs, so they can meet all the financial targets without sacrificing what it takes to come out with a great product.
But being a good car guy isn’t enough. He (or she) needs to be a top officer in the company, so he can pull rank and invest more in the product when it’s needed. Lutz is able to make decisions happen that lower-ranking product people could never get away with.
In all large organizations, there’s always the danger that “the system” becomes the focus of everyone’s efforts, instead of the customer. Over time, the system inevitably tries to pull the product-development process towards the easiest solution at the lowest possible cost.
That’s how you end up with the ‘91 Caprice, the ‘97 Malibu or the ’01 Aztek: competent vehicles that met specifications but never set customers’ hearts aflutter.
That’s why, when the 75-year-old Lutz decides to retire, GM needs to replace him with someone who has his knowledge and experience and is worthy of his rank. Hey, come to think of it, isn’t Wolfgang Bernhard available?
John McElroy is editorial director of Blue Sky Productions and producer of “Autoline Detroit” for WTVS-Channel 56, Detroit, and Speed Channel.