Bob Lutz Interview

We talk with the General's Car Czar

Edmunds.com

By Karl Brauer

October 21, 2003

He is arguably the most colorful automotive executive in the world,
with a resumé that includes stints at every major U.S. manufacturer
(and BMW) over the last 40 years. He's flown fighter jets, raced in
SCCA and become quite the cigar aficionado.

Robert Lutz started his automotive career at GM in 1963, and he
returned to the General in 2001 as the head of product development.
He is largely responsible for the Pontiac GTO and Solstice, and he is
quick to point out that many GM divisions have higher quality ratings
than Toyota.

We recently had the opportunity to speak to Mr. Lutz about his
automotive past, what he parks in his own garage and his plans for a
revived General Motors that he believes can take on, and beat, the
Japanese.

Edmunds.com: During your career you've worked at all three domestic
car companies as well as BMW. You started at GM in 1963. How does it
feel to be back with the General after all these years?

Robert Lutz: It feels wonderful. It's a completely transformed
company. A much leaner company, much better organized. Today it is no
longer organized like the behemoth that it once was where, literally,
a GM North America organization chart took up an average-size wall,
even if you only had the important people on it. Today you can almost
put it on a 3-by-5 card. That makes it much easier to do business.
It's increased the speed of decision-making probably tenfold, and
today it's a very lean and fast company and a great deal of fun to
work in.

What do you see as the major differences between the auto industry 50
years ago and today?

We are certainly, as an American automobile industry, far less
complacent because 50 years ago, and even 30 years ago, we were
competing primarily among ourselves. We used the same suppliers and
we used the same methods and we got people from the same design
schools and we had workers from the same union and so forth. There
wasn't a great deal of difference between General Motors, Ford,
Chrysler, Hudson, Packard, Studebaker and all those guys who were
still around at that time. We all delivered essentially the
same cars with similar horsepower and the same levels of quality,
which, of course, weren't all that great. And then we got the intense
challenge from,primarily, the Japanese in the '70s and '80s and,
frankly, it took the U.S.industry quite a while to respond to that.
But today I think we're there. We're producing quality as good as
anybody in the world and improving our quality almost monthly as we
speak. We're very confident of this year's numbers looking better
than last year's. It's a completely transformed industry. As we do
new product programs, we sort of secondarily look at competition from
other domestics, but we generally, now in product programs, target
the world's best. If we do a high-performance sedan we'll target a
BMW M3. A lot of times the targets are Japanese and German cars.
In terms of competitive challenge, it's truly become a global
industry. Whereas 30 years ago you could argue it was still a very
inwardly American-focused industry.

Many people say your greatest strength as an automotive executive
comes from the fact that you are a "real car guy." What led you to
becoming a "car guy" and was there a specific moment in your life
when you knew you were a "car guy?"

Well, I think I grew up in a family where there was a great deal of
automotive enthusiasm. My mother's sister was married to a guy who
had a 1938 Talbot Lago. Another uncle owned a 4.5-liter Delahaye that
had belonged to a French Formula One driver. My father always had
interesting cars like Jaguars and Aston Martins and so forth, and I
just got interested at such an early age. Toy cars were the only
thing I wanted to play with,and by the time I was three, if I went on
drives with my mother I could call out every make and every model and
every year of every car on the road even before I could read
nameplates. And then as I grew older I really wanted to do three
things. I wanted to be a race driver, I wanted to be a fighter pilot
and I wanted to be an automobile executive. In order of success I
think I did probably the best work as an automobile executive,
second best as a Marine fighter pilot, and as a race driver I was
average,but I did manage to do all those things.

What vehicles do you currently own and why?
From a prior career I still have two Vipers, which I'm sort of
reluctant topart with because they're collector's pieces in terms of
VIN numbers. I have a '34 La Salle convertible, which is the first
car I remember my parents driving. I have my father's old 1952 Aston
Martin DB2 Vantage, beautifully restored. I have a 1941 Chrysler
convertible. I have a 1971 Monteverdi High Speed, which was a Swiss-
built, Ferrari-esque,high-performance coupe. It was one of those cars
like Bizzarini, and like Iso Rivolta, and like Lamborghini that was
created by a wealthy individual who was tired of being mistreated by
Enzo Ferrari, and said, "To hell with you! Who needs you? I'll build
my own." And that resulted in some very interesting European cars,
usually with Italian bodies and American engines, and this one is,
too. For 1971 it's an extremely exciting and good-looking car. I have
a 1962 Buick Skylark convertible because it belonged to my deceased
best friend, and I bought it from his widow. That's got the aluminum
215-cubic-inch V8 engine, and when you drive it you realize that what
we were doing, basically 40 years ago, was great work. That car is
still so good that you tell yourself, "No wonder GM had over 50
percent market share back then." I've got a 1952 Citroën, six-cylinder
front-wheel-drive car, which was the biggest front-wheel-drive car in
the world at that time. I have a 1934 Riley MPH semiautomatic,
aluminum-bodied sports car, that the Riley company built to compete
in Le Mans. It has huge 18-inch magnesium brakes and a lot of cast
magnesium in the structure. Very interesting car technologically.
I've got a Steyr-Pinzgauer, a former Swiss military vehicle.
Extremely high ground clearance, three differentials, air-cooled,
four-cylinder engine, hub-reduction axles, torque-tube drive?
maybe the world's most competent all-wheel-drive vehicle. I got that
surplus from the Swiss army a few years ago. I've got two
Cunninghams, a 1953 C3 Coupe and a 1952 C4R Le Mans racing replica.
And I've got an Autokraft Cobra, an aluminum-bodied Cobra.

What do you consider the single most significant automobile ever
produced?
Well how can you overlook the Model T, which put the nation on the
road? How can you overlook the Volkswagen Beetle, which did the same
thing for Europe? And how can you overlook the 1934 Citroën? It was
the world's first unitized body. The world's first mass-produced
application of front-wheel drive. The world's first application of
longitudinal, double wishbone,torsion bar suspension at the front
end. The world's first application of IRS with transverse torsion
bars and trailing link suspension at the rear end. For 1934, that
thing was 20 to 30 years ahead of its time. It defined the layout of
generations and generations of cars. Mine is a '52, but it's
identical to a '34 because they didn't change the body during the
war. In terms of ride and handling, it is still a totally modern
automobile. Every time I get in that car I'm hugely impressed when I
think about what the Citroën engineers did in 1934.


You did the Viper during your stint at Chrysler, and now Neil
Hannemann,who led the Viper team, is doing the GT at Ford. Does GM
need a Viper/GT class vehicle, or is the Corvette strong enough to
handle that role?
Let me tell you that the Corvette C6 will have versions where we
confidently predict it will suck the doors off of both the cars that
you just named. The current Z06, with 400 horsepower, on the
Gingerman Raceway, laps faster with its 400 horsepower than the new
Viper does with 500. So other than just brutal straightline
acceleration, the Z06 is faster today. Clearly the C6 Corvette,
without giving anything away, is going to be a major step forward in
vehicle mass, dimensions, handling, braking and, most important of
all, power-to-weight ratio. So I think whatever gap exists now
is going to be eliminated ? in total performance. I think we'll match
the competition in acceleration, and we will beat them in on-road
handling. And if the Z06 version of the C6 is not enough to do it,
we've got a few tricks up our sleeve, which we're already
investigating. But it will always be Corvette-based.


Who do you consider to be the major players/personalities in the
industry today (beyond present company of course)?
It's clear that Carlos Ghosn has to go down as one of the significant
figures of today's automobile industry. A brilliant guy who has done a
brilliant job of leading Nissan on the road to recovery. It's just
hard to fault him on anything, it just looks like he's done
everything right. His boss, Louis Schweitzer, at Renault has done a
brilliant job. He's my second or third cousin, by the way. We're
related on the grandfather side. But I don't praise him because he's
my cousin. He's just done a great job.

So it's in the genes is what you're saying?
Well, maybe. The family used to have its own car company way back
when. There have been an inordinate number of family members
connected to the carbusiness in one way or another, so maybe it is
genetic.

There's also Mr. Folz of Peugeot-Citroën, [and] if you know the
European scene, it is hard to not be impressed with what has been
done with Peugeot-Citroën, which wasn't supposed to happen. It's an
independent, family-owned company, not affiliated with any major
producer. The typical sort of company where you say, "Well, they
don't have the resources to survive in today's world." They're not
only surviving, they are Europe's largest and most profitable
automobile company.

And though he's recently retired, Ferdinand Piech of Volkswagen-Audi
is perhaps a somewhat flawed personality because of his enthusiasm and
intellectual brilliance and his passion for high-performance
machines. I think this caused him to lose balance a little bit, and
it's a balance that I've always struggled to maintain within myself,
because you've got to take care of the bread-and-butter stuff.
Perhaps what Piech did was he neglected the bread-and-butter
Volkswagens and let them get a little bit old as he was doing
Lamborghini Murcielagos and Lamborghini Gallardos and Bugatti
Veryons, Bentley W8s, Volkswagen Phaetons and multicylinder, 12-
cylinder,16-cylinder luxury cars ? until the cows come home. This was
pursuing his own personal passion and doing these exciting,
exceptional cars, which get the attention of the car magazines and
car enthusiasts like me, but they don't really move the day-to-day
iron. But he's still, if somewhat flawed, an amazing guy with
incredible intuition for what works and what doesn't. What he did to
transform Volkswagen-Audi from sort of a lackluster, somewhat dull
company into a company producing really exciting, vibrant cars is
really pretty impressive.

Why do you think the Japanese continue to gain market share in the
U.S.? Is it simply product-related or does it go beyond that?

Part of it is, of course, exchange rates. Adjusted for costs in the
respective countries, the yen is just too weak. And considering the
cost of doing business in the United States in U.S. dollars, the
Japanese still have a cost advantage of three to four thousand
dollars per vehicle, which they can either use to pricing advantage
or margin advantage or putting more equipment into a car at a given
price. And it doesn't matter whether they produce the cars in the
U.S. or not, because a lot of the content is still imported. People
say, "Well, Toyotas are built in the United States now." Yes, many
are assembled in the United States, many are not assembled in the
United States, and even the ones that are assembled in the U.S.
contain a high percentage of Japanese or other offshore parts. The
exchange rate issue is real. The other thing is, I don't think there
is a real, measurable quality difference anymore. If you look at J.D.
Power ranking by make ? by nameplate ? as opposed to by corporation,
Toyota is actually now in ninth place. And Buick, Chevrolet and
Cadillac are ahead of Toyota. It's only when you lump Lexus and
Toyota together that Toyota barely squeaks out a first-place
position ? a little known fact, by the way. So the reality is
we've closed the quality gap but the lag in customer perception is
still huge. The average person still believes that the Japanese cars'
quality and reliability is head-and-shoulders above General Motors,
and it simply is no longer the case.

It's going to take a while for that to get through. I would say the
onus is on us to produce vehicles, which we're now doing and the
Chevrolet Malibu is the first concrete example, vehicles with a much
higher level of visual quality. Better panel fits, closer gaps,
better door-closing sounds, better-tailored seat covers and more
precise ***** and switches. Soft, low-gloss plastic parts instead of
hard, shiny ones. All of those things are part of what the customer
registers as a quality perception, which is why we call it "perceived
quality." And your real quality can be outstanding, but if your
perceived quality is off, the customer says, "Gee,I don't know, this
is a pretty lousy-looking interior. I can't believe this is a good
car." And you turn them off. That part we still have to fix
across our whole product line and do interiors and exterior fits and
finishes that tell the customer, "Wow, this thing was put together
with great attention to detail and love of craftsmanship." That's
really the Volkswagen and Audi secret. If you look at J.D. Power,
their cars are not even average, but the way they are finished is so
good that the customer thinks, "This is done with such care and love.
I must have this car."

Why should today's buyer consider a Chevrolet Malibu over a Toyota
Camry? It sounds like you're saying that the quality is there, even
if the perception isn't.

Absolutely, plus the Malibu offers a lot of things the Camry doesn't.
I will concede on the Camry a higher level of refinement, a more
richly crafted interior and a quality reputation. But the reality of
quality is that the Malibu beats the Camry according to J.D. Power.
The Malibu has better performance and far better ride and handling.
And I believe the Malibu is roomier. The new Malibu, you put that
next to a Camry and I tell you, in terms of fits and finishes, gaps,
interior quality and so forth, you're going to find the Malibu is
equal to, I think, the Camry. And with the V6 engine, it outperforms
it and I think it outhandles it. It also outbrakes it. I believe
personally, subjectively, that it's more fun to drive. And we do have
a price advantage.

And I would say one more thing. We've been reading a lot about the
deindustrialization of America, and about manufacturing jobs going
offshore. And, while I don't want to wave the American flag and say
it's your patriotic duty, etc., etc. But, I think all other things
being equal,the American purchaser should ask himself or herself when
they buy a vehicle, "What am I doing for the American economy here
with my purchase?" That's all I'm saying. And Toyota will say, "Yeah,
but the Camry is made in the United States." Well, yes it is and no
it isn't. And most of their vehicle lineup is not. And even the Camry
contains a very high percentage of Japanese engineering, Japanese
parts, Japanese supplier components, and so forth. So, I think at
some point we're going to have to decide whether we want an
automobile industry or we don't. And I would never expect the
consumer to buy an inferior vehicle just because it's American. But
these vehicles are no longer inferior. I think we've taken the last
of the excuses away.

What is the number-one challenge facing GM right now? It sounds like
it's changing the company's perception.
Yes, that's exactly right, you've got it. We've got to. And it's
through advertising. It's through unpaid communication, through
speeches, through owner experiences, through word of mouth. We have
got to get the truth out about where we are on quality and
reliability versus the Japanese. And as I say, part of the
communication is how the car is put together. Because, again, you can
have a totally reliable car with crooked body gaps, a door that
closes with a bad sound, cheap interior plastic parts, carpets that
don't quite fit. None of those things are a reliability problem or
something that you go to a dealer about, but they're not nice. And
it's up to us, as we've done in the Malibu, and as we will do in all
of the cars we launch, that all of the sights and sounds, materials,
controls and everything will contribute to sending the message of
quality, as opposed to detracting from it. But you're right, it's our
biggest problem ? the lingering reputation that American companies,
General Motors in particular, cannot produce consistent quality the
way the Japanese can.

Do you see the Internet playing a role in changing this perception?
Yes, very definitely. I think quite possibly a more educated, more
aware, younger group uses the Internet as opposed to just talking to
buddies at the bar or watching television. And the Internet is great
for spreading word of mouth.


What is GM's greatest strength/advantage in the marketplace?

We still have close to 30 percent of the market, and I'm convinced
that it's going to grow. For the last four months Chevrolet has been
selling in the United States at a three-million-unit-a-year rate. And
I think that Chevrolet, with the new Malibu, the new Colorado pickup,
the new van, which is sort of a blend between sport-utility and
minivan, basically a sport-utility with sliding doors on the side,
and with the Chevrolet Equinox small sport-utility. And with all the
other new stuff coming from Chevrolet like the Cobalt, which replaces
the Cavalier, which, arguably, is almost old enough to vote. You see
a Chevrolet that is just a powerhouse. My forecast is that Chevrolet
will be the number-one selling division in the United States in a
relatively short amount of time. And then you've got the resurgence
of Cadillac. We've got Pontiac on the comeback trail with the GTO as
its flagship that's going to help change the whole perception of
Pontiac. We've got a lot of exciting stuff coming from Pontiac, as
well as Buick. And we've got this new Hummer brand that can be
expanded downward into smaller sizes and price classes. So, I just
see us ideally positioned in the market. One of my perceptions coming
back to GM after working for all the other companies is, this company
has more smart people in it.

I used to say at Chrysler, jokingly, back in the bad old days at GM,
I'd get the Chrysler guys together when I was arguing for speed
rather than studying stuff all the time. I would say, "Look guys, the
bad news is the average guy at GM has 20 points of IQ on us. And the
good news is that the average guy at GM has 20 points of IQ on us,
because they're intellectual to a point where they will constantly
study ramifications of things rather than acting. Whereas we're dumb
enough to seize the obvious and we just go ahead and do it. Too much
intellectual power can be a drawback, but it is no longer a drawback
at GM because the company realizes that a less than perfect decision
made quickly is better than a perfect decision made too late. It's a
highly streamlined company ? very, very fast decision-making, very
little paperwork, and yet you have all this intellectual potential on
the engineering side and the manufacturing side.

 

Let me tell you that the Corvette C6 will have versions where we
confidently predict it will suck the doors off of both the cars that
you just named. The current Z06, with 400 horsepower, on the
Gingerman Raceway, laps faster with its 400 horsepower than the new
Viper does with 500. So other than just brutal straightline
acceleration, the Z06 is faster today. Clearly the C6 Corvette,
without giving anything away, is going to be a major step forward in
vehicle mass, dimensions, handling, braking and, most important of
all, power-to-weight ratio. So I think whatever gap exists now
is going to be eliminated ? in total performance. I think we'll match
the competition in acceleration, and we will beat them in on-road
handling. And if the Z06 version of the C6 is not enough to do it,
we've got a few tricks up our sleeve, which we're already
investigating. But it will always be Corvette-based.


:flag :D :party: - Keep it going Bob!

 

Yeah, but it will probably be ugly.... :lol:

 

:withstupid: