Lutz Scorches, Praises Leaders in ‘Icons and Idiots’

Except for a brief stint as chairman of troubled Exide Technologies, Bob Lutz, despite his larger-than-life image as the consummate “car guy,” has never held the top spot at any major company.

He did, however, come close, as he worked his way up the ranks at BMW, General Motors (twice), Ford and Chrysler.

Flamboyant, blunt, creative and controversial, Lutz has legions of cheerleaders but also plenty of critics who like to call him “Lutz the putz.”

Now, at age 81, Lutz has penned a new 201-page book entitled “Straight Talk on Leadership: Icons and Idiots” (Portfolio/Penguin, $26.95).

Full of anecdotes, humor, barbs and battles, the title is a bit misleading; there are few true idiots and most of the purported icons have a goodly share of warts.

Lutz worked for a disparate group of CEOs over more than 50 years in the auto industry.

He praises some of his superiors such as Chrysler’s Bob Eaton and GM’s Rick Wagoner, perhaps because both gave him a long leash in pushing for vehicle design and performance – and were rewarded with a stream of winners. Not so much to like about Ford’s Harold (Red) Poling and Phil Caldwell or BMW’s Eberhard von Kuenheim.

As for legendary Lee Iacocca, Lutz says their “rocky relationship” may have been because they were too much alike.

There’s no mention of his last GM boss, Ed Whitacre, the retired AT&T CEO who took over as GM’s chairman and CEO in January 2010 following the federal bailout that saved GM.

Iacocca: Vulnerable and Insecure

Lutz’s most famous boss, Iacocca, gets mixed reviews. Lutz applauds Iacocca for his focus, inspiration, boldness and other attributes, but writes that despite Iacocca’s public image, “there was a side that was vulnerable and insecure.”

Although Lutz led development of some of Chrysler’s hottest cars and trucks, when Iacocca reluctantly faced retirement in 1992, the word got out that his job was open to “ABL,” or “anyone but Lutz.”

There’s a faint comparison to Henry Ford II’s firing of Iacocca in 1978 because, he reportedly said, “I just don’t like you.”

While Lutz writes that he had some board support, “Lee fought it vehemently. I was too ambitious, volatile, unpredictable, undiplomatic, emotional and way too prone to saying the wrong thing at the wrong time. In short, I was too similar to Iacocca.”

Iacocca instead hired Bob Eaton, then chairman of GM of Europe, as Chrysler’s CEO. Despite being passed over, Lutz stayed on as president and chief operating officer until he retired in 1998.

“Icons and Idiots” is a chronological walk-through of Lutz’s adult life and those whose leadership had a significant influence on him, for better or worse.

He starts out with his prep-school teacher in Switzerland where Lutz was born (later becoming a U.S. citizen), Georges-Andre Chevallaz, whose “intense dedication and drive for excellence laced with humor had a profound mark on me.” Chevallaz later entered politics and wound up president of Switzerland in 1980.

Returning to the States in 1954, Lutz set his sights on becoming a Marine Corps aviator and eventually flew jets for five years, though he never saw combat, having served between the Korean and Vietnam wars.

But first he had to complete boot camp at steamy Parris Island, SC, where he came face-to-face with tough Staff Sgt, Donald Giusto, his senior drill instructor, who over 12 weeks stripped away his civilian trappings and molded him into a Marine.

“He taught the values of duty, honor, and commitment (and) of perseverance under hardship, of mental and physical pain as a necessary milestone in the achievement of a goal,” says Lutz.

After five years of active duty, Lutz enrolled in the University of California-Berkeley and earned his MBA in 1962.

Always fascinated by cars, speed and design, he had Ford in mind. However, his father, an international banker, knew then-GM CEO Fred Donner, and Donner arranged an interview at GM. Lutz was hired for $8,000 a year and assigned to GM Overseas Operations as a senior analyst in the forward planning department – his first job in the auto industry.

No one told his boss, Bob Wachtler, that he’d been hired, which got things off to a turbulent start. Still, when Wachtler barked his expectations, “It was a classic example of honest, no-holds-barred leadership communication. No pretense, no sugarcoating,” Lutz writes.

In the end, Lutz concluded that “GM and I owe him a great debt.”

Lutz’s next superior was Ralph Mason, who headed GM’s Adam Opel subsidiary in Germany. He soon discovered that Mason and his wife were heavy drinkers, but in due time came to appreciate “a core of toughness and courage that sometimes appeared when least expected.”

Despite his shortcoming, Mason “presided over a remarkable period of design and engineering creativity,” and market share and profitability also increased, Lutz explains.

His next boss was Erberhard von Keunheim, then-CEO of BMW. A baron and aristocrat, von Keunheim hired Lutz as executive vice president-sales and marketing, the company’s No.2 post, for 10 times what he’d earned at GM.

They clashed repeatedly, and Lutz departed after three years. Yet, under 23 years of the baron’s leadership, BMW went on to record “miraculous” results, Lutz writes.

“While violating many of the traits of a good leader and ruling by secrecy, fear and deft maneuvering, and a sorry lack of trust for his team, the aristocrat-cum-street-fighter has to go down as one of the most successful automotive CEOs of all time, based on the wealth he created for stockholders,” Lutz concludes.

Lutz next was recruited to join Ford’s International Operations in 1974 as managing director of Ford of Germany. His ultimate boss was FIO chief Phil Caldwell, who later rose to parent Ford’s CEO.

Lutz criticizes Caldwell for an excruciating emphasis on detail in both his personal and corporate dealings. “The feeling of unease in his presence never left me,” Lutz writes.

Although Caldwell was the antithesis of a “car guy,” as personified by Lutz, he had “one powerful sense of purpose that overrode his many quirks and foibles: He was undeviatingly focused on making Ford the quality leader of the world, surpassing the then-seemingly unbeatable Toyota.”

Poling Had Lutz Seeing Red

Perhaps no other superior was tougher on Lutz than Red Poling, a by-the-numbers commander who later also rose to become Ford’s CEO.

Lutz first came under Poling’s exacting financial dictates while heading Ford of Germany, and Poling served as chief financial officer of the newly formed Ford of Europe, a move that stripped the German subsidiary of its relative autonomy.

Lutz, who resented Poling’s “micromanaging,” writes they often remained at loggerheads until after Lutz departed for Chrysler in 1986. No longer on the same payroll, they eventually warmed to each other.

“Red Poling knew, intimately and by hands-on experience, how the car business runs. Somewhat unfortunately, though, he saw it as a hugely complex set of numbers and line-item budget elements,” Lutz writes.

Early on in their relationship, he says he hated working for Poling. But Lutz’s opinion changed when the boss insisted on a tight budget for a major vehicle program that ultimately proved a hit.

“Red taught me that tough, uncompromising, unfeeling, almost nasty approach to initial cost and investments could produce meaningful savings.”

Bob Eaton, an affable GM engineer who’d worked his way up to head GM-Europe, was his next boss.

Perhaps surprisingly, the two men got along well, with Lutz staying on as president and the driving force behind a string of marketplace winners.

Lutz turned 66 and retired before the Daimler takeover, but Eaton initially stayed on briefly before exiting and retired to Naples, FL, where he still lives. He has been roundly vilified for selling out Chrysler.

Not so fast, Lutz writes. “He ran a great company, made it a desirable partner, and merged it into a larger company, in the process creating enormous wealth for Chrysler’s shareholders,” notwithstanding a giant windfall for himself.

Still, Lutz remains loyal to Eaton. “Bob Eaton has had his reputation unfairly tarnished. He was tagged a pathetic loser. By the important metrics on the scorecard, he was a winner.”

Lutz next joined Exide and offers a lucid portrait of the widespread corruption extant prior to his arrival and his efforts to clean up the mess.

Then came a call from Rick Wagoner, GM’s chairman and CEO, who was looking for a “car guy” to inject new life into GM’s moribund product line.

Lutz came onboard in September 2001 as vice chairman-global product development and soon solidified its engineering and design groups and revamped its car and truck offerings.

Although Lutz faults Wagoner for often being too loyal to executives with whom he grew up and his heavy emphasis on “process” as opposed to Lutz’s “gut” instincts, he thinks Wagoner was unfairly ousted just when GM was gaining traction. He blames the 2008 recession triggered by Wall Street’s collapse, which sent car sales reeling, for GM’s financial straits and ultimately Wagoner’s undoing.

“Rick demonstrated many of the qualities of the ideal CEO,” says Lutz. “He was honest, unflappable, fair and possessed of remarkable intelligence…devoid of bluster, autocracy and punitive behavior.”

In the end, “Rick was simply too nice, too introspective and thoughtful in many of his actions to see the company through the turbulence of 2008-’09. I hated to see him go.”