Lutz Pushes for Transformation, Not ‘Incrementalist’ Notions

LOUISVILLE, KY – There are a lot of things that could keep General Motors Corp. Vice Chairman Bob Lutz awake at night, but No.1 these days is what he calls “global climate-change mania.”

Speaking at the Global Automotive Conference here Monday, Lutz takes shots at both liberal environmentalists and Bush Admin. regulators for creating a climate of panic and fear in Washington that is producing ill-conceived “incrementalist” notions about saving fuel that focus solely on the internal combustion engine and unfairly pressure only vehicle manufacturers.

Earlier this month Lutz said GM was putting several key future rear-wheel-drive platforms on hold because of concerns about meeting tougher fuel economy standards.

“If we have to devote our resources to meeting fuel economy mandates that demand we get 30% better mileage, we can’t devote them to future rear-drive products that we don’t know how to get 30% better mileage from,” Lutz said at the time.

The decision to take a second look at the product planning stems from the Bush Admin.’s proposal to raise corporate average fuel economy standards 4% a year from the current 27.5 mpg (8.5 L/100 km) requirement today. Other proposals circulating in Congress would put CAFE requirements at 34 mpg (6.9 L/100 km) by 2016.

Another factor is the recent Supreme Court ruling giving the Environmental Protection Agency the power to regulate vehicle carbon dioxide emissions, a gas that contributes to global warming.

Lutz begins his speech here declaring GM’s commitment to improving fuel economy and painstakingly detailing a long list of fuel-saving initiatives, including flexible-fuel and nine new hybrid-electric vehicles, as well as GM’s new 100-car test fleet of hydrogen-fueled vehicles.

GM Vice Chairman Bob Lutz

He then jabs at environmentalists and the media for not understanding the cost of commercializing fuel-saving technologies such as HEVs and clean diesels that meet the EPA’s strict new Tier 2, Bin 5 emissions standards.

Lutz also rips federal regulators for not forcing oil companies to do more in creating a distribution network for ethanol fuels.

The complexity and cost of squeezing another 30% of efficiency from internal combustion engines is a task those outside the auto industry do not fully comprehend, he says, suggesting lawmakers meet directly with auto makers to learn what is commercially feasible instead of relying on estimates by commissions or groups with no automotive experience.

“Let’s really have a national program,” Lutz adds, arguing for “transformational” strategies that promote alternative fuels and electric-powered vehicles.

“We get told what to do by the government all the time. How about telling the oil companies that they are to put in one ethanol station for every gas station that has over five pumps?” Lutz says, pointing out GM soon will have 2 million flex-fuel vehicles capable of burning ethanol on the road in North America.

The federal government also should institute national programs to dramatically increase cellulosic alcohol production and import ethanol from Brazil, which is the world’s largest and most efficient producer of the fuel, Lutz adds.

But Lutz doesn’t just criticize outsiders. He acknowledges GM lost its way for 15 or 20 years and became not the world’s largest auto maker, but rather an agglomeration of four regional companies.

He points out some of GM’s much-heralded global architectures were not really global at all.

And, he admits that until very recently, GM’s interior design also has been sorely lacking.

Of the previous-generation Cadillac CTS interior, Lutz says: “We managed to make it very expensive, but it doesn’t look very expensive.”

But all those issues now are in the past, he says. The auto maker now truly is a design-driven company with globally developed products and architectures that can share component sets and be built all over the world.

This emphasis on “interbuildability” promises to yield huge benefits in the future, more than 20% to 25% savings in such areas as material, component and engineering costs, Lutz says.

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