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How's He Doing So Far?

DETROIT For the past three years here, in 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.

DETROIT — For the past three years here, in 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-chomping, fast-driving 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 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 he isn't going anywhere.

He says he has no plans to retire because he's still having too much fun. “I keep telling Rick I don't want to work until I'm 80 and I'm 72 now,” he says.

Who will replace Lutz when he finally bows out? Lutz 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?”

Possibly 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 Lutz's 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. “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:

  • Streamlining and totally revamping GM's product development group, with design elevated from low- to high-priority status, and putting a sharp focus on interiors with high levels of material and assembly quality — a facet of product development too long neglected by the highly analytical GM.
  • Developing vehicles with satisfying vehicle dynamics also is a priority for Lutz, himself an expert driver. To better create vehicles with the European-style handling so revered by enthusiasts, he has overseen construction of a test track at GM's Milford, MI, Proving Ground that mimics the famed Nurburgring road course in Germany.
  • Eliminating the ill-conceived brand-manager organization, dating to the early 1990s, that he inherited, urging designers and engineers to unleash their creative talents to develop superior vehicles. GM's era of “brand management” essentially was the antithesis of sound product development, and Lutz quickly dismantled the system that valued marketers more than engineers.
  • Providing a morale boost for the entire corporation, which had been dismally low as it wallowed “in a sea of mediocrity,” as one source puts it. “GM feels like the big kid on the block again,” says Andrew Chien, president of Ricardo Strategic Consulting in North America.
  • Spearheading a “best-in-class (BIC)” philosophy that says future GM models must perform up to or beyond competitors in every segment — even if it will add cost. Some argue this is high risk, but Lutz says it's a bigger gamble to keep building vehicles that don't sell and then plunking costly incentives on them.

“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 for 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. A car is doomed if the only thing you can say about it is that it debuted on schedule, says Lutz.

The “new” GM accepted the holdup. That 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 cord would have been previously unimaginable at GM.

GM brass have many times made 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 role in reworking GM's big moneymakers: the next-generation fullsize pickups and SUVs coming in 2006 and 2007.

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 Lutz 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.

Skeptics also looked askance when Lutz last year flatly stated the revised Pontiac 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 criticized for lousy handling, cheap interiors and hokey fender flares. But a Chevy spokesman says Lutz can't take the blame. “Those 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,” Lutz 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.

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 vehicle line executives 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.), which are global auto companies, because it just doesn't work anymore.”

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.

Lutz's best-in-class initiative may be a big 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 says he must keep working because he isn't wealthy and has “expensive hobbies.” He made $3.7 million last year in direct compensation and $7.2 million in unpaid incentive awards and common stock.

He appears to have bigger plans for himself. At a speech to dealers and analysts, the septuagenarian Lutz said he'll be ready to take over as CEO when Wagoner, 51, retires,.

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

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