Bob Lutz going GM

[ricksLS1]

General Motors Corp. hired former Chrysler Corp. Vice Chairman Robert Lutz as vice chairman of product development to help the largest automaker improve its vehicles and reverse falling market share.

Lutz, 69, will report to General Motors Chief Executive Rick Wagoner. He resigned from his current job as chief executive of battery-maker Exide Technologies, effective Sept. 1.

General Motors' U.S. market share has plummeted to about 28 percent from more than 50 percent in the 1960s partly because its cars have been less attractive than models made by rivals, analysts said. A recent attempt to break the mold didn't work when sales of the Pontiac Aztek, a hybrid of a car and a sport-utility vehicle, fell short of expectations.

``Lutz is a very fine auto man and a great acquisition,'' said Glickenhaus & Co. senior partner Seth Glickenhaus, who sold all his 115,689 General Motors shares as of March 2001. ``There's so much room for improvement at General Motors that almost anything he would do would be an improvement.''

Lutz, who has worked at all three major Detroit automakers, ``will be a burr under the saddle of senior GM people who have been surviving by keeping their heads down in meetings,'' said David Davis, editor emeritus of Automobile magazine. ``Every GM engineer under the age of 50 would see his arrival as good news.''

General Motors shares rose $1.66, or 2.7 percent, to $64.33 in midmorning trading. The stock has climbed 26 percent this year, while DaimlerChrysler AG's U.S. shares have advanced 19 percent and No. 2 automaker Ford Motor Co. has gained 7.3 percent.

Market Share

General Motors has watched Japanese automakers such as Toyota Motor Corp. and Honda Motor Co. snag U.S. market share, first in the 1970s by creating low-cost, dependable and fuel-efficient cars and now with sport-utilities and luxury cars.

Lutz, a former Marine pilot who has owned his own fighter jet, retired from Chrysler when the company was acquired by Daimler-Benz AG in November 1998.

When Lutz arrived from Ford in 1986, Chrysler's product lineup was derived from compacts introduced in the early 1980s. Chrysler then developed a string of products, including the Dodge Ram pickup and the Intrepid family of midsize cars, that were praised by analysts and boosted sales.

Lutz was Chrysler's president from 1993 through 1996 during one of the automaker's many turnarounds. In that time Chrysler went from the verge of bankruptcy to being named Forbes magazine's Company of the Year in 1996.

Not all analysts are Lutz fans.

``I don't think he's a very good car guy,'' said Jim Hall, an analyst at industry research firm AutoPacific Inc. ``Bob Lutz is one of the reasons that Chrysler didn't do a full-size SUV.''

`Ugly Cars Don't Sell'

When Lutz left Chrysler, he wrote a book titled ``Guts: The Seven Laws of Business That Made Chrysler the World's Hottest Car Company.'' Those laws include ``Too Much Quality Can Ruin You'' and ``Disruptive People Are an Asset.''

``Ugly cars don't sell,'' Lutz told an audience of industry executives in January. Many new concept cars ``look like angry kitchen appliances -- furious bread machines, vengeful trash compactors.''

Consumers were reluctant to accept the unusual styling of the Pontiac Aztek, which has a large flat back end that supports an optional camping tent. General Motors has sold 18,201 Azteks so far this year, far below the original projections for first-year sales of as many as 75,000.

``If you took, over the past five years, all the major nameplates and had an `ugly-off' (competition), General Motors would win hands down,'' said Dan Poole, an auto analyst at National City Corp. which owned 308,191 GM shares as of March 2001 and most recently sold 35,790. By hiring Lutz, Wagoner ``is going to go up a few notches in the investor community's eyes.''

Design Department

General Motors design chief Wayne Cherry has reorganized the vehicle design department to create a particular look for each brand. Cherry, who will report to Lutz, is expected to retire next year when he turns 65. The automaker has hired 100 new designers since 1995, including 30 from overseas.

General Motors' current product chief, Tom Davis, doesn't have the power envisioned for Lutz. Davis is credited with developing full-size trucks and sport-utility vehicles whose sales are increasing while Ford's decline. Davis will retire in next year's first quarter, General Motors said in a statement.

``He is coming in with a specific responsibility for a specific time,'' said Maryann Keller, an independent auto analyst and consultant. ``It results in there being no (office) politics in his situation.''

At Exide Technologies, the largest maker of automobile batteries, Lutz will remain as chairman and be succeeded as CEO by President Craig Muhlhauser, spokesman Tim Yost said. The Princeton, New Jersey-based company recently changed its name from Exide Corp.

Lutz helped solve several problems he inherited at the company. He settled a Florida attorney general investigation to sales practices $3.7 million, closed four factories and 11 distribution centers and cut more than 1,500 jobs to reduce costs. In March, Exide pleaded guilty to U.S. federal charges that it conspired to sell used batteries as new at Sears, Roebuck & Co. stores and agreed to pay a $27.5 million fine.




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[VTHokie00SL2]

Those laws include ``Too Much Quality Can Ruin You''

Is this why Chrysler products are such crap these days?! LOL! I wouldn't go anywhere near one if I were buying a car today. If it's built by Chrysler, you can pretty much count on it having poor reliability and pathetic crash test results. I hope that's not the future direction of GM - they need to improve quality in order to compete with the "imports".

[ricksLS1]

I sa that Quality line too.

[thatjerryguy]

I wonder how long it'll take until Bob Lutz, Car Guy, gets swallowed up by the quagmire that is GM bureaucracy. >(

[dieseljack]

Lutz will have his work cut out for him. There appears to have been no accountability among the GM design and marketing hierarchy for the stupid decision making that has brought about eroding market share. The company is no longer run by passionate automobile men. You now have short-sighted bean counters right out of the Roger Smith mold who strangle any creative engineering or design progress that just might possibly be appealing to customers.

Ah yes, Roger. Even though it was his good fortune to be associated with Saturn's success, it was he, in the eighties, who goose-stepped GM into dwindling sales, killed the Fiero, and sold off very profitable divisions such as GMC Bus.

Ed Cole and Bunky Knudsen must be spinning in their graves.

[piney]

If I recall correctly, Lutz is a real car guy. He should be an asset. I believe that he is the father of the Viper and Prowler - a real car guy and the first non-accountant to head a car company in many years.

I've said for a long time that if GM could borrow Chrysler's stylists, that there would be a heck of a company. Besides the Aztec (which is so ugly that they had to ship one off to people on Survivor in order to find someone to want to be in it), there is the Rendezvous to share the ugly award. GM's mini-van stylists have to be double-agents for someone else - tall, narrow, and unattractive.

If Oldsmobile had made cars like the 300M, the division would still exist. Let's hope that he has something to do with the new S series.

[edwilson13185]

I'm not sure why Chrysler products have lackluster crash tests lately. The new Intrepids protect your head and chest alright, but they apparently think it's ok for people to do without feet. explain it somebody?! I know I'll head for Saturn or Chevy for my next car, certainly not tin can chrysler. I like Chrysler's styling better, but I'd rather live in a generic car than die in style in a crash.

Ed

[haypops]

From the great man's own mouth "Saturn is nicely positioned as Detroit's answer to the imports. It's also known for great customer handling, but that may not be enough to do it. That's one of the brands that needs further handling and further defining."

On the other hand he believes Pontiac, GMC, and Cadillac are OK.

see
http://auto.com/industry/lutz3_20010803.htm

[dmtsl2]

Well, Bob Lutz may be a "non-accountant," but he does know how to cut costs like one. He used to be chairman and CEO of Exide Technologies Corporation and earlier this year they "announced restructuring plans that would cut its annual costs by $90 million and its work force by 950."

If I recall correctly, I thought Saturn Corp. lost somewhere in the neighborhood of $980 million last year and was predicted to do a near-repeat this year.

Anyway you look at it, the next few years are going to be different and interesting for GM/Saturn.