Now in his late seventies, Bob Lutz knows his auto industry history, and his latest book, “Car Guys vs. Bean Counters,” provides a lot of lessons.
He has lived in the most inner circles at Ford, BMW, Chrysler and General Motors. Who better to tell us the history of the struggle for authority and dominance in the various auto companies, as well as the recent history of GM's fall and rise?
Lutz refers to that power playing as, “the tyranny of process over results.” Self-effacingly, he says his motto is, “Often wrong but never in doubt.”
While he comes across as confident in the book, he also impresses with his candor and humility, free to admit a personal mistake or miscalculation.
Then there is his notorious acerbic wit and occasional tendency to be blunt with comments to the press such as, “Global Warming is a total crock of s***.”
The retired vice chairman of GM chronicles the history of the auto maker from the days when iconic stylists like Harley Earl and Bill Mitchell ruled the roost. GM achieved market dominance by executing stylish cars that people lusted for because of their innovation and beauty.
But then came a bureaucratic process where no one tried to achieve anything other than to be perceived as not having made a mistake. Lutz calls it “analytics run amok.”
He singles out for particular scorn the “brand” era at GM, headed by Ron Zarella, brought in from Bosch and Lomb. Instead of designing desirable products first and then creating the underpinnings to make that design work, the first step in the new bean-counter dominated GM was to create cost-constrained underpinnings.
The design department was then given the mission to “wrap the underpinnings in something that looks as good as it can under the circumstances.”
This is the opposite of how things were done before, Lutz says.
He cites the ill-fated Pontiac Aztec, the “Quasimoto of crossovers” as an example of bad design stemming from constraints demanded by the finance guys.
There was a time when GM car paint was meant to be purposefully dull so as to not reveal flaws. There was no desire to excel or develop a “smash hit.”
Instead, the focus was on meeting “data points.” Executives could avoid the accountability of failure as long as it was perceived they had followed the GM process of pre-ordained dull design.
Brand managers were recruited from companies like Procter and Gamble, and cars were developed and marketed by people who were deodorant, baby wipe and toothpaste experts.
“The ebullient, dynamic, seductive volcano of creation had been transformed into a quiet mountain with a gently smoking hole at the top, spewing forth mediocrity upon mediocrity,” says Lutz.
The internal confusion at GM is exemplified by a conversation Lutz relates with an automotive supplier over lunch. At the time, Lutz was president of Chrysler. He asked the supplier who his favorite customer was. The answer: “GM!”
Why? asked Lutz.
Because, the supplier said, he sold GM the same bearing under seven separate parts numbers and in different boxes at wildly different prices. The purchasing departments rarely talked to each other.
Lutz tells his own version of how GM and Chrysler got a government bailout, filed for bankruptcy and then emerged from it with a reorganization plan.
“In a sense, the decline, failure, and rebirth of General Motors is simply a metaphor for what is happening to business in the whole United States,” Lutz says.
The noted automotive journalist, David E. Davis, Jr., who recently died, said, “This book should be required reading for any young person who seeks a business degree.”
It also should be read by anyone who seeks a job at or works for GM.
David Ruggles is a former dealership manager and currently an automotive consultant. He can be contacted at [email protected].