According to Bob: How GM cars got better
Even before he rode into General Motors as the product-development savior in 2001, Bob Lutz found himself being recruited for plots to take over the company.
There was Heinz Prechter, the ASC sunroof king who proposed that Lutz and ex-Chrysler executive Steve Miller join with him as a pre-assembled management team to buy shares and get the board to clean out management.
There was J.T. Battenberg, the former GM executive who undertook the thankless and ultimately impossible task of making money at Delphi Corp., the spun-off hodgepodge of former GM parts operations. Battenberg, Lutz writes in his new memoir-cum-management book, Car Guys vs. Bean Counters, "called me at work one day. His proposal: he would exert backdoor influence to have me elected CEO of GM" because he was concerned about the direction of the company.
Those are among the startling revelations in Lutz's book, which hits the bookstores next month.
The book is pure Lutz. Self-confident and self-congratulatory in way that could be repulsive with anybody else, it's funny, congenial and sometimes self-deprecatory. And honest.
The book gives the best-ever insider's view of a dysfunctional if polite GM culture that valued process, rules and hierarchy above all else, even above the product and the customer.
Lutz's book inadvertently raises the question: At GM, will Lutzism outlast Lutz? In his great success leading a top team at Chrysler in the 1990s, "I obviously failed to create a sustainable culture of customer focus and product excellence at Chrysler. But I believe the lesson will 'stick' at GM."
The jury is still out. And GM already has rearranged product development by installing a good organizer/manager, rather than an intuitive "car guy," at the head of the organization.
Lutz proudly wears his motto: "Often wrong, but never in doubt." (A disclaimer: I'm among those who give Lutz credit for revolutionizing GM's car lineup and turning dull appliances with tacky interiors into attractive, desirable vehicles that people would want to buy. Exhibit A: the Chevrolet Malibu.)
As a management book, Car Guys argues that intuitive and creative product people (like Lutz!) should be running things, not those analytical MBAs. He also argues that GM's fall was largely a result of a) terrible government policy on fuel economy, which basically gave the Japanese automakers a free pass, and b) a mean-spirited media that reveled in being unfair to GM and its Detroit peers.
Against outsiders like the media, Lutz is like the mother of the bad kid: protective. Then, after blaming others for GM's failure, he spends half the book with sometimes hilarious anecdotes about GM's stultifying culture, which almost guaranteed mediocre cars that consumers could blithely ignore. Never in doubt.
'A horror show'
Soon before he started as vice chairman in September 2001, Lutz had a look-around at GM's future products. He held his tongue about cars and SUVs that "were obviously doomed to failure."
At the Pebble Beach Concours d'Elegance that year, GM design chief Wayne Cherry invited Lutz to his suite and showed him photos of future cars: "It was a horror show."
To Lutz's surprise, Cherry said: "I don't like any of these either. Most of them are really awful."
The problem wasn't that Cherry and his team couldn't design. It was that GM's vehicle line executives determined everything, including design, and their main goal wasn't to create great cars but to meet all their cost targets and deadlines, in part to show that GM could develop cars just as fast as Toyota could. (Toyota is a tremendous bugaboo to Lutz, so irritating that he and his team created the Chevy Volt to try to leapfrog Toyota and what he considered its unwarranted reputation as the green company.)
At his first meetings with GM's top strategy boards, Lutz found "the notable absence of any focus on the thing that matters most: the company's products."
When he got into the GM brands, Lutz found silly pictures of "homes, furniture, watches, sunglasses, pens, pots and pans and (almost without fail) a golden retriever or two, all indicative of the mood, or soul, of the brand."
"It was unmitigated hogwash."
At Buick, GM's experts had decided that to cater to the elderly, the cars would have no instrument panel but would instead be run by voice controls. Lutz drove a prototype with an engineer.
"At his urging, I asked for 'more cold air.' 'No, no!' he said. 'You have to scroll verbally! First say 'climate control.' When the car says 'climate control,' you say 'blower. When the car repeats 'blower," you say 'up one.' Same with temperature.'"
The next morning, Lutz killed the system.
He found a mind-numbing array of standards, many of which led directly to unappealing vehicles: a standard for tire robustness that required small wheels and plump tires; a standard meant to combat paint chips that required tucking the wheels too far inside the wheel well, guaranteeing a wimpy stance; an ashtray standard (must work at 40 below) that made openings uniformly hard to work.
Giving design back to design
Lutz's first initiative was to give design back to design. He empowered Wayne Cherry to make attractive cars. He lectured his people regularly on fit and finish, comparing GM's mediocre offerings to the quality of cars from Audi to Hyundai.
Lutz discovered that GM had people who could do great things. But the culture had demanded something else.
He also graciously identifies heroes at GM:
-- Former manufacturing chief Gary Cowger, who created a high-function relationship with the UAW and brought manufacturing into a global system.
-- Former engineering chief Jim Queen, who energetically standardized and globalized engineering.
-- The "beleaguered, brave Anne Asensio," the French designer who "was fighting a battle with all the 'best practices' folks from all the functional areas." She won her lonely fight for high-quality interiors.
-- Joe Spielman, the hulking, brash head of "Metal Fab," who, once given clear direction by Lutz, quickly turned GM's wide body-panel gaps into world-class fits and finishes.
-- Ed Welburn, who, in "my finest personnel decision" replaced the retired Wayne Cherry as head of design and who "has taken GM Design back to a level exceeding the halcyon days of the 1950s and 1960s."
-- Jon Lauckner, a vehicle line executive who ran the first global vehicle program, and who later conceived and ran interference for Lutz's "Hail Mary" to overtake Toyota in environmentalism, the electric, extended-range Chevy Volt. "With a sharp wit, an argumentative nature, and a very un-GM propensity to recognize bad performance and do so out loud, Jon was respected more than loved."
Neither hero nor villain is the man who hired Lutz to improve GM's vehicles: CEO Rick Wagoner. "Rick was a kind, intelligent CEO of spectacular human qualities," Lutz writes. Lutz's Wagoner is brilliant, congenial, well-intentioned. He made many good decisions, such as going global with product-development and buying the remnants of Korea's Daewoo. But he was a product of the GM culture.
Whitacre and Wagoner
Lutz contrasts Wagoner's "democratic" leadership with the "brilliant despot" at Volkswagen Group, Ferdinand Piech, and with one of the three Wagoner successors after the Obama administration fired Wagoner.
The Texan Ed Whitacre focused on results, especially sales results. And the company adopted as its mission statement "to design, build, and sell the world's best cars and trucks."
"Understanding the beauty and efficiency of the simple message was Ed's genius," Lutz writes. "Whitacre is much smarter than he wants you to believe, but in a battle of IQs, I'm sure he, as almost all of us, would succumb to the intellectual powerhouse that resided in Rick Wagoner. Who has the better leadership style? Who was a more effective CEO? Whitacre's term was too short to draw any meaningful conclusions."
Lutz recounts the horrors that ultimately led to GM's failure: the collapse of GMAC over residential mortgages; the spike in fuel prices in 2008 that made it impossible to sell trucks; and then the global financial collapse. (Even as he rails against people who think humans have anything to do with global warming, Lutz has long argued for gradually greater taxes on gasoline, as a way to bring demand for fuel-efficient -- and global -- vehicles in line with rising fuel economy.)
When GM came under the thumb of the Obama administration's task force, Lutz the Happy Warrior writes, "they were expecting the situation I had found seven years earlier. Happily, they were amazed by the spirit, skill, dedication and speed of GM's product creators and our laserlike focus on developing best-in-class vehicles."
Often wrong, but never in doubt.
Bob Lutz's book is wonderfully readable, insightful, funny and, of course, sometimes self-serving. Just as Bob Lutz was the most human of automotive executives during the past three decades, Car Guys is human in a way that few business books are human.
And it leaves hanging the question: Will the product-development revolution that Lutz personified at General Motors outlive the outsized Lutz?
"My effort to instill into the organization a drive for perfection and customer delight in all things was successful," Lutz concludes. "And still I wonder -- was I right? Did I change the core of the product development culture by teaching, or did I rely too much on my own will and my considerable influence to get what I wanted? If the latter, excellence will soon be lost again, and 'value engineering' and 'Let's see how much we can cut before the customers start complaining' will rear their ugly heads again.'"
It's a big question, far from answered. The executives running the new GM ought to keep a copy of Car Guys handy to remind themselves what happens when process, rules and hierarchy trump common sense and a focus on the customer and the product.
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