Three Years and Counting

For the past three years in Detroit, the city of cars, there has been but one name explicitly synonymous with “Car Guy.” Bob Lutz.

Bob Lutz, the cosmopolitan General Motors Corp. vice chairman of product development who cut his teeth at BMW AG, cemented his reputation at Chrysler Corp. and speaks four languages. Bob Lutz, ex-marine pilot, still-extreme civilian pilot and ultimate auto-executive-as-auto-enthusiast.

Cigar-chompin,' fast-drivin' Bob Lutz is the only hair-on-fire, let's-kick-some-butt executive GM has had since John Z. DeLorean left the company in the early 1970s.

GM Chairman Rick Wagoner knew that is exactly what he wanted when he recruited Lutz in 2001 to revolutionize the company's languid product-development culture. Lutz has done for GM what the X Games did for sports: given it a new, more youthful appeal. Even so, Lutz is not perfect, or without detractors.

Ward's recently interviewed Lutz on the eve of his 3-year anniversary at GM. Three years originally was to be the extent of his contract, but Lutz startled some GM folks last year by rather casually revealing his exit date wasn't cast in stone, and that he might stay on longer. It now seems certain Lutz isn't going anywhere.

He says he has no plans to retire because he's still having too much fun. Who will replace Lutz when he finally bows out? Lutz, 72, says he has no “crown prince” in mind, and that he has identified a small cadre of passionate product people in GM's global empire who collectively could carry on his crusade if no single leader emerges.

So after three years on the job, what's he done? Has the car guy's car guy lived up to his billing?

When Wagoner plucked Lutz from his chairmanship at troubled battery maker Exide Technologies, he reasoned that if perpetually stodgy GM was to reverse its decades-long erosion of market share and compete with the immensely competent new generation of products pouring into the U.S. from Europe and Japan, the company desperately needed a high-flying personality to inject new energy into the company's humdrum vehicle lineup.

The selection of Lutz as GM's new product guru raised eyebrows and ruffled feathers. Lutz certainly has an action-packed resume, but doubters wailed: “The guy's almost 70. Was there nobody within GM — nobody younger, nobody free of Lutz's occasionally bizarre methods — to answer the call?”

Probably not, it could be argued. Lutz delivers “buzz,” a quality the average GM suit doesn't possess in abundance. His many devotees insist Lutz's charisma and instinctual product savvy have been a godsend for GM.

Critics — fewer, or at least less public with their opinions — say his impact is overrated. Lutz's presence, for example, has resulted in no measurable influence on GM's market share, which has remained essentially unchanged during his tenure.

But interviews with GM insiders, analysts, dealers and others underscore that Lutz has made a profound impact at GM.

“I think he has made permanent changes,” says David E. Cole, director of the Center for Automotive Research. “I don't know how GM could go back to the old way it was doing things.”

He credits Lutz with toppling GM's slow-moving bureaucracies, setting its talented product people free and spreading enthusiasm among the ranks. “I'd give him an ‘A,’” says Cole. “He has been extremely influential in redefining the business process at GM.”

In short, Lutz has taken a cutting torch to the mangled maze of GM's obsessively bureaucratic product development, which over the decades became more concerned with honing its own internal efficiencies than with creating inspiring vehicles.

The list of Lutz's more-meaningful initiatives provides an outline of what may be considered his “successes” to date:

“If we continue with very low-cost and somewhat agricultural-feeling vehicles, we'll continue to be derided by the automotive press,” he says. “I don't know any other way out of the American (auto) industry's dilemma against the imports other than doing demonstrably superior cars at any given price point.”

Gary White, a vice president and vehicle line executive (VLE)-fullsize trucks, says Lutz's impact “has been gangbusters from the start. He got after styling inside and out. He sees things some of us never saw before in the design.”

The Buick LaCrosse midsize sedan arriving this fall, which replaces both the Century and Regal, appears to be more-or-less the first “new” model to demonstrate this thinking. Lutz demanded upgrades in handling, performance, fit-and-finish and interior execution. He insists the car's interior equals or beats European and Japanese cars in its class.

Those changes resulted in a year's delay for LaCrosse's launch. “There was nothing favorable you could say (about the pre-Lutz LaCrosse and the replacement for Buick's LeSabre flagship) except they were on time,” says Lutz.

The “new” GM accepted the holdup for both cars, which speaks volumes about Lutz's corporate culture-changing impact — and the power he wields. His late-in-the-game yank on LaCrosse's product-development andon cord would have been previously unimaginable at GM.

But GM brass have many times made similar bold pronouncements for upcoming waves of new models, only to have them fall hopelessly short of the “world-class” qualifier the company now embraces. LaCrosse and several other key models launching this year may be viewed as put-up-or-shut-up examples of whether Lutz really is arming GM to churn out demonstrably better vehicles.

The next gut check is the Chevrolet Cobalt and Pontiac G6, also coming later this fall. Cobalt, riding on the new Delta front-wheel-drive architecture, replaces the lackluster and money-losing Chevy Cavalier and GM's worn out J-car platform. The G6, using the new and already well-regarded Epsilon FWD platform, supplants the popular but hardly world-class Pontiac Grand Am.

Focusing initially on Buick, Saturn and Pontiac, Lutz killed the well-received Buick Bengal concept but has blessed the sporty, 400-hp Velite convertible unveiled at this year's New York Auto Show, part of GM's new fullsize rear-wheel-drive car platform.

He has returned “pizzazz” as a must-have element for GM's concept vehicles, some of which already are in the production pipeline, including the much-ballyhooed Pontiac Solstice roadster coming in late 2005.

“People were afraid it was going to be a pretty face, a cheap and cheerful sports car,” Lutz says, “and I think they were surprised to find it's like a miniature Corvette.”

Two other sporty concepts enjoyed solid showings at this year's Detroit auto show, and both share the Solstice's supposedly high-quality, low-cost Kappa platform: the audaciously designed Saturn Curve and the Chevy Nomad. Curve is a “go,” but the Nomad apparently isn't earmarked for production.

Beyond that, Lutz's fingerprints also are on the new rear-drive Cadillac STS, which replaced the Seville this summer; a revised interior for the Cadillac CTS to answer criticism of an otherwise hit car; the next-generation Chevrolet Corvette C6 just reaching the market; and a fair-to-middling upgrade for the '04 Pontiac Grand Prix that forced Pontiac to minimize the kitschy body cladding that had become its most-resonant brand “differentiator.”

GM sources say up to now, Lutz has had relatively little involvement with GM's comparatively healthy light-truck business, but he knows trucks. In the mid-1980s he headed Ford's truck operations. He tweaked GM's revamped minivans, which it chose to rename “crossover sport vans,” arriving soon, with new front and rear treatments and quieter, more elegant cabins.

More telling will be Lutz's key role in reworking GM's big moneymakers, the next-generation fullsize SUVs (GMT900) and pickups coming in 2006 and 2007.

Drawing on his international credentials, GM earlier this year sent Lutz to Europe for three months as interim president of financially ailing GM of Europe (GME). During the 1980s, he served as chairman of Ford of Europe.

Lutz was unable to magically reverse GME's financial outlook: It lost $112 million in the first quarter, putting its breakeven 2004 forecast in doubt. But he did unveil a product development renaissance at GME aimed at drastically chopping redundancies.

Lutz's adventures are not free of misstep, however.

Although one of his more endearing quirks is distributing “Sez Who?” stickers meant to challenge employees to take individual responsibility for flagging problems in vehicle-development programs, he may have ignored his own advice on a few occasions. Internal critics say Lutz's persona at times overwhelms the job at hand, causing Lutz himself and others to be distracted from the very tenets he preaches: putting out the best possible product.

One such product-related foible is the Pontiac GTO. Lutz played a critical role in moving the car quickly into production, but so far it has been a sales bust. GTO has been criticized for generic styling that Lutz is supposed to have outlawed.

Journalists also looked askance when Lutz last year flatly stated the revised Grand Prix “is the best performance sedan, certainly for a domestic, that I've ever driven.”

And GM's all-new '04 Chevy Colorado and GMC Canyon compact pickups have been properly criticized for lousy handling, cheap interiors and hokey fender flares. But a Chevy spokesman says Lutz can't take the blame as the trucks were “‘baked in’ pretty much before Lutz started,” he says.

Lutz has on several occasions openly accused the automotive media of bias against domestic-nameplate vehicles. “We'd like to see an end to the stereotyping and categorization of domestic cars in print,” he said.

Many experienced journalists agree that while Lutz's point may have some merit, his attacks on “media bias” nonetheless appear to be the sort of excuse-making the Big Three have fallen back on to justify their decades-long loss of market share.

To his credit, however, Lutz challenged to a race a Canadian auto writer who had written the Grand Prix was inferior to Nissan's Maxima. The Grand Prix-piloting Lutz whipped the journalist and the Maxima.

Not known for overt humility, Lutz says he would take “strong exception to any portrayal that over-emphasizes my influence” during his first three years at GM, “but in a sort of honest self-assessment, I was quickly able to reorganize the front end of our product development process, which was very process-focused with a very left-brain, overly systematic approach, leaving very little room for creativity. It was very mechanistic.”

Lutz says he got rid of brand managers “as a species” and reduced the influence of VLEs on styling. “We had 14 VLEs at the time making design judgments, and there's not a car company in the world that has 14 executives capable of making ultimate design decisions. It's got to be concentrated in the hands of a few people.”

One of Lutz's major moves has been to mesh GM's worldwide engineering and design groups to “operate as one function and get out of this business of running four different companies in the U.S., Europe, Australia and Latin America,” he says. “The world is too small for this when you're competing with Toyota (Motor Corp.) and Honda (Motor Co. Ltd.).”

In GM's scheme, platform-sharing across international lines would mimic Toyota's strategy, with exterior styling and other architectural modifications to meet brand objectives, local demands and tastes.

He cites the Epsilon platform, which was developed in Europe and provides the underpinnings for the North American Chevy Malibu and Pontiac G6, as well as the Saab 9-3 and Opel Vectra in Europe. But each car in the end was developed separately by VLEs for each brand, resulting in unnecessary differences and adding cost.

“In very silly ways, the Malibu and G6 wandered away from the Vectra for no earthly reason,” he says. If Malibu, for example, had shared body styling with Vectra, “it would've been better received in the U.S.,” Lutz says.

Rather than separate VLEs for each nameplate sharing a common architecture, “there will be one global VLE (for the platform), and he'll call the shots” for everyone, Lutz says.

For instance, it makes no sense that Saab, a money loser that sells 120,000 cars yearly, should continue as a separate entity developing its own designs, he says, especially since it still needs vehicles like coupes, an SUV and a crossover.

“How are they going to compete? They can't” without commonality, he says. Industry observers, however, question whether the '05 Saab 9-7X, a re-engineered Chevy TrailBlazer, is good for Saab's brand equity.

Lutz outlined the new approach to Europeans during his GME stint and concedes not everyone is happy about it. He says he found product develoment there to be “dysfunctional” and dispatched “14 of our brightest midlevel executives” on a 2-week offsite to study the situation. “They came back and the answer was crystal clear: That we were basically hamstrung by our organization. Running three separate organizations on the same continent (Opel, Saab and Vauxhall in the U.K.) without sharing design, engineering and manufacturing” doesn't work.

Lutz's best-in-class initiative may be a bigger roll of the dice, but he considers it the only way GM will win back and keep customers. With the backing of Wagoner and Chief Financial Officer John Devine (who approached Lutz to join GM), Lutz aims to rival GM's toughest competitors in developing cars and trucks that excel in all respects.

“We're no longer in a world that you can design vehicles down to cost,” he says. “Of course, you've got to be conscious of cost. But you can no longer do a vehicle (and say) it's pretty good, and we'll be all right, and because we're GM we'll get our share. You won't get your share.”

Lutz credits GM's manufacturing and assembly operations and suppliers for performing diligently in executing his quality and aesthetic initiatives.

Siemens VDO Automotive, for example, had the contract to supply instrument clusters on the Cadillac CTS, beginning in 2001. It was later determined that the cluster design didn't measure up to the car's upscale, performance image, so Siemens delivered a new cluster directly to Lutz and it was installed as a running change.

“The cluster went from one that was passable to one that was considerably better looking,” says Dave Barnes, Siemens VDO account manager for GM sales, crediting the ‘Lutz effect.’

GM dealers generally applaud Lutz, with some reservations.

Peter Brandow, a Philadelphia Chevy dealer, questions Lutz's drive to attract “enthusiasts” and argues that real vehicle differences have less to do with innovation and more about ownership.

“We had better be able to appeal to ‘Joe Lunch Bucket,’ who has given up the idea of owning a rocket car and wants only a decent ride at a fair price,” says Brandow. With the demise of Cavalier, Chevrolet will have only the small, GM Daewoo-built Chevy Aveo (starting at $9,455 up to $12,045) as a true entry-level car. Production of the Pontiac Sunfire, however, will continue in Mexico.

Other dealers say Lutz's showroom impact has yet to be determined. “Lutz hasn't been around long enough for us to really see how he can do,” says a Pennsylvania Pontiac-Cadillac dealer.

Lutz remains in excellent health — trim and a self-described modest drinker who is careful about what he eats. His lust for cars shows no signs of diminishing. Lutz says he has a plateful of challenges remaining; 36 months is not long enough to carry out the product-driven revolution he was charged to ignite at GM.

Lutz also avers that he must keep working. He says he isn't wealthy and has “expensive hobbies.” The un-wealthy Lutz pulled down $3.7 million last year in direct compensation and $7.2 million in unpaid incentive awards and common stock.

Besides, who says Lutz is leaving? In addition to extending his original 3-year stint, he appears to have bigger plans for himself. At a recent speech, Lutz said when Wagoner, 51, retires, he'll be ready to take over as CEO.

When the crowd laughed at the prospect, an attendee says Lutz had a look on his face that seemed to say, “Hey, I wasn't joking.”
— with Alisa Priddle, Tom Murphy, Bill Visnic and Cliff Banks

Maybe GTO Needs a New Song

If there's a black cloud over the generally sunny reviews bathing Bob Lutz since he took over as GM's product development chief, it's in the shape of the '04 Pontiac GTO he pushed into production.

Built in Australia and based on GM Holden Ltd.'s Monaro rear-wheel-drive platform, the revival of the famed original GTO “muscle car” of the 1960s was aimed at quickly bolstering Pontiac's low-on-testosterone lineup now that the redoubtable Firebird is gone.

The GTO was something Lutz could do fast because most of the pieces were already available.

He visualized a high-performance, able-handling midsize 2-door coupe to run with premium performance coupes from BMW AG, Audi AG and Toyota Motor Corp.'s Lexus division. The GTO's not-unsubstantial 350 hp comes from a modified Corvette 5.7L OHV V-8, backed by a 4-speed automatic or 6-speed manual transmission.

By some accounts, Lutz hit the mark. “No, Pontiac's new '04 GTO is not an ear-shattering, liver-pummeling reincarnation of the original Goat (its common nickname),” Motor Trend reports, but “yes, it is the fastest, most appealing GM muscle car in memory.”

Appealing, however, doesn't apply to exterior styling. Since the GTO was introduced early this year it has received a cool reception from the car-buying public; only 3,766 had been sold through June.

Although the GTO may have all of the hardware to meet the demands of most ardent performance enthusiasts, its undistinctive sheetmetal doesn't make an impression. The original GTOs bore unmistakably muscular styling cues, and it became so popular that at least one song was written in its honor.

“The GTO is a mixed success,” says Bryan Fitzpatrick, chairman of the Industrial Design Department at the College for Creative Studies (CCS) in Detroit. “The car is a bit bland, but it's not all Lutz's fault — he was sort of hamstrung in keeping most of the same sheetmetal. We talk to people in our studios and they're not too excited” about the GTO, he admits.

Still, the folks at CCS are heartened by the new approach Lutz is taking, says Fitzpatrick. “Pontiac got rid of all that junk on the sides of their cars, and Buick is getting away from the bloated look.”

Ever the optimist, Lutz is convinced that once the GTO's attributes are fully recognized, there is still time for it to be accepted. He blames its sluggish start primarily on “serious misdistribution. It's based on ‘turn and earn’ (industry parlance for allocating vehicles to dealers based on their sales performance).”

This policy favors Midwestern dealers because they sell more Pontiacs, while West Coast dealers — where the car might find a more-willing audience — have been “under-supplied,” he maintains. And GM hasn't gotten across the message that here's raw V-8 power in a rear-drive coupe — something not seen in a new-age American car for a generation.

“I wish we were sold out, but it's a $35,000 (actual base price is $31,795, topping out at $34,000) Pontiac,” Lutz says. “It looks like we're at the end of this generation of body styling, but most people who look at the GTO objectively love it,” he says.

Whether or not it's excuse-making, Lutz's timing, and possibly budget, seemingly ruled out quickly bringing to market a new-age GTO with the strong visual appeal and heritage of the original. But a fresh-bodied GTO, likely with underpinnings similar to the current car, reportedly will arrive in 2007.
— David C. Smith with Brian Corbett