So Long, Bob. Hello Bob Chrysler's Lutz isn't ready to settle down

Chrysler Corp. Vice Chairman Robert A. Lutz in July cleaned out his spacious, memento-filled office, and, at age 66, moved on to a new chapter in his varied and colorful life.

Only he knows what lies ahead. He already serves on four corporate boards and a handful of civic, educational and charitable organizations. Yet despite his many accomplishments in an automotive career that has spanned 35 years and four companies, he's not ready to settle down.

He could sit back on his farm near Ann Arbor, MI, and enjoy his collection of cars, trucks, planes and motorcycles, gliding quietly into a lush retirement.

But you sense that Bob Lutz still has something to prove. A potential candidate to one day head Ford Motor Co., his career was short-circuited in the early 1980s by his own strong views and corporate politics. He also was the seemingly logical choice to succeed Lee A. Iacocca as Chrysler's chairman in 1992. However, his propensity for brutal frankness, sometimes flip public statements and clashes over corporate strategy reportedly riled Mr. Iacocca, a renowned egocentric.

So for Chrysler insiders, it became "ABL. Anyone but Lutz." Mr. Iacocca instead courted Robert J. Eaton, then head of General Motors Corp.'s International Operations, who took over on Jan. 1, 1993. Mr. Lutz remained on as president.

The two men outwardly are vastly different, except for one important trait: Both are "car guys" who love the products. Mr. Eaton is an engineer from Kansas who moved up quickly and quietly at GM. Mr. Lutz, born in Zurich and raised in New York state, is a brash, charismatic international figure fluent in German and French with more than 20 years in European automotive posts. He's also a former Marine Corps pilot (1954-'59) who occasionally sports a crew cut and who always proudly wears his Corps tie clasp.

Speculation that the two "Bobs" would wage internal war never panned out.

Mr. Lutz accepted his No.2 role without rancor, and the two men - along with other key executives - jelled into a team that has made Chrysler the industrial darling of the '90s, setting a giddy pace in everything from styling to productivity and profits.

Like the guy who hired him from Ford in 1986, Mr. Iacocca, Mr. Lutz wants to keep active. Even before departing he took a close look at investing in New Venture Gear, a 50/50 Chrysler-GM transmission joint venture, which is for sale, but took a pass.

He's also considering something on the supplier side where there's plenty of action these days. And who knows, he could take another run with a different automaker after the one-year noncompetitive clause in his Chrysler contract expires.

Worth millions and with annual retirement pay exceeding $300,000, he clearly doesn't need a regular job. Still lean and healthy, the tall white-haired executive has broad interests and strong, often controversial, opinions on numerous subjects. Combined with his success as a key molder of a rejuvenated Chrysler, which flirted with bankruptcy in the early '90s, he could write his own terms in taking on new challenges in fields ranging from education to politics.

Or how about the movie business? His speeches often are sprinkled with parallels between cars and flicks, focusing on how exceptional creativity produces superior results.

Some of his antics in unveiling new Chrysler models show he has a flare for the dramatic. In 1993, Chrysler used Hollywood special effects to explode windows in Detroit's Cobo Hall as Mr. Lutz and the late Detroit Mayor Coleman Young safely "crashed" through on their way to introducing the all-new Jeep Grand Cherokee.

Mr. Lutz departs on the eve of Chrysler's proposed merger with Daimler-Benz AG, about which stockholders of both companies will decide on Sept.18. He was an instrumental player in that deal when D-B Chairman Juergen Schrempp broached the subject to him at the 1997 Frankfurt Motor Show last fall. Mr. Lutz informed Mr. Eaton, and things got serious when the two chairmen met during the North American International Auto Show in Detroit last January.

In May the companies shocked the automotive world by revealing they'd combine forces, with D-B paying $38 billion for Chrysler stock and retaining 57% interest in what will become DaimlerChrysler AG (see WAW - June '98, p. 26).

Mr. Lutz was scheduled to retire when he reached 65 in February 1997. He stayed on another 17 months at the board's request, easing out during that period as a "coach and consultant" while giving up day-to-day duties.

That reprieve from joining the Medicare set also made him officially available for the Schrempp meeting and subsequent merger discussions.

Why is he departing now? "I naturally have pangs (of anxiety) about it, but I've come to grips with the transition," he tells WAW. "I wish I didn't have to go, but my rational side says it's time to get on."

Although Chrysler will come under Daimler control, Mr. Lutz is convinced that "we won't lose our brand identity. The important, costly things will be shared."

Chrysler and D-B discussed a possible link-up in 1996 when Kirk Kerkorian, Chrysler's largest shareholder and, at the outset, Mr. Iacocca, waged a takeover battle.

At that time, what D-B and Chrysler "were talking about was either too big or too small," he recalls. "We were in a no man's land. It was too big for a joint venture (the talks focused on large trucks) and too small for an overall solution."

Now that the deal has been cut, Mr. Lutz doubts there'll be cultural problems. "There is always going to be some friction, but I don't see any at the senior level. We (Americans and Germans) are becoming more alike," he says, cogently adding that "there's a major clashing of cultures within the Big Three."

Mr. Lutz says he "always had this fascination with toy cars, real cars, pedal cars, you name it." As a youth he constantly sketched cars, became quite good at it, and thought he might become a designer before discovering he didn't have quite enough talent.

But he had an undeniable flair for design, which was helpful in a series of high marketing and leadership roles at Opel, BMW AG and Ford, where he served as Ford of Europe chairman and executive vice president of International Operations before approaching Mr. Iacocca to join Chrysler in 1984.

His success is all the more surprising because he got a late start. He rather proudly recalls he was kicked out of prep school (he doesn't say why) and didn't graduate until he was 22. His father thought a stint in the Marines would help, so he joined and became a jet pilot (he still flies his own jets and helicopter).

Then it was on to the University of California at Berkeley where he was a Phi Beta Kappa and earned his bachelor of science degree in 1961, receiving his MBA, with highest honors, in 1962 and then joining GM in New York as an analyst in its Overseas Operations (see Scuttlebutt, p.27).

Although he sometimes is mistakenly described as an engineer, his university focus was production management. "When I joined GM they viewed me as a business type, and they were constantly amazed that I knew what an extrusion was, what impact-forming was and so forth. They said, 'Don't you have a business degree?'" he recalls.

Mr. Lutz was a prime mover in organizing Chrysler's platform team product development scheme that first bore fruit when the all-new LH full-size cars arrived in 1992; he counts that as perhaps his biggest triumph.

Although Ford's "Team Taurus" in the early '80s was a pioneer in that thinking, Chrysler adopted the concept company-wide, a strategy now emulated by automakers worldwide, including Ford.

But being tagged a "car guy" above all else rankles Mr. Lutz. He also wants to be remembered as a strict financial disciplinarian, not one who spends foolishly. "There are always two sides to the coin," he says. "(Some people think) you're either a great product guy or a great business guy, but how could you possibly be both? I tried very hard to be both of those things, and I think I was."