In early March, Bob Lutz -- the auto industry’s colorful, outspoken, “ultimate car guy” -- announced he would step down from his position as General Motors vice-chairman on May 1.
The Swiss-born Lutz, now 78, leaves behind a long legacy. He’s served in various executive positions at General Motors, Chrysler, Ford and BMW, and has always been a proponent of bold designs that created an emotional response from buyers. He helped turn Chrysler around in the early 1990s, and then returned to GM in 2001 to inject some excitement into their product line-up and re-focus the company’s attention on product quality.
Since Lutz’s return, GM has rolled out a bevy of sexy, head-turning models, some of which have snagged awards. New models bearing his influence include the dashing Cadillac CTS, the burly new Chevy Camaro, the redesigned Chevy Malibu, the Buick LaCrosse, and the svelte Pontiac Solstice and Saturn Sky roadsters (a pair that, unfortunately, were discontinued when GM decided to shutter the Pontiac and Saturn divisions). But the most important vehicle Lutz has had his hands in just might be the upcoming Chevy Volt plug-in, which could be a game-changer both for GM and the industry.
About a week after announcing his retirement plans, we caught up with Lutz to discuss his career, his legacy, his proudest accomplishments and a couple of his more colorful quotes. Here’s what he had to say.
AOL: Of all the vehicles you’ve shepherded into existence over the years, which one would you say you’re proudest of?
BL: I think it would have to be the Volt, for a few reasons, one of them being the new technology. Previously, every other vehicle I’ve been involved with and have been proud of has been an exceptionally good execution of something that someone had done before, but it never really broke new ground technologically.
But the Volt does break new ground. In the field of alternative-drive systems, it leapfrogs what has been employed by our Japanese competitors, and it was also a very interesting program to execute, because there was a lot of internal and external skepticism. There were a lot of naysayers who said it was BS, or that it was just PR, or that the lithium-ion battery would never work, or that GM wasn’t serious about this.
So, facing all that negativism, and ultimately triumphing with a car that has a good chance of making a major impact, is thrilling.
AOL: It’s been reported that you had to approach former GM Chairman and CEO Rick Wagoner three times before you got the go-ahead to move forward with the Volt. Is that true?
BL: It wasn’t just Rick Wagoner who was hesitant -- it was the company’s entire automotive strategy board. GM had been so badly burned with the EV1 that there was very little desire to repeat that, and to experiment with a battery-powered vehicle.
And there were a lot of senior people inside the company who’d become very enamored of fuel cells, and we were spending a lot of money on fuel-cell development. So I think there was some resentment from the fuel-cell backers inside the company 'What is Lutz doing, pulling this lithium-ion battery out of his hat?' Because I think they thought they would be the ones to transform the planet and get us off fossil fuels. There was this internal competition.
AOL: You’ve said that one of the other things you are proudest of is changing the culture at General Motors during the past decade. Talk about that, and why you consider it to be an important accomplishment.
BL: Well, when I came back in 2001, there was a business-school attitude at the company that the product was only one element, and that it was just one of the many factors that had to be blended together for maximum financial impact. But that theory no longer works.
It’s really only by focusing on the product, and identifying with it, and loving it, and giving it the best look, to just aim for the goal of creating the best product you know how, that will give you the greatest rewards. That was GM’s legacy of the 1950s and '60s, when GM had the best styling, engines and technology. Then, from the '70s through the '90s, that ethic became lost. I was happily able to connect GM to its past, and re-focus on the primacy of product excellence.
AOL: After the Volt, what other two or three vehicles would you say you’re proudest of, that you think were among your greatest accomplishments?
BL: I’d say the Cadillac CTS and the Pontiac G8, and I was certainly very proud of the Pontiac Solstice and the Saturn Sky.
AOL: Why did you think the CTS was an important vehicle for the company, and what did you want it to represent?
BL: I think the fact that the CTS still receives so much acclaim demonstrates that the Cadillac division can still produce a vehicle that -- in terms of styling, fit and finish, road manners, etc. -- can match the best that the German cars have to offer.
AOL: The development and unveiling of the Pontiac Solstice concept car (in the fall of 2001) is a great auto-industry story. It went from being an idea to a concept car for the Detroit auto show in just four months. Looking back, why was that important, both in terms of the vehicle itself and the ability to launch the concept car so quickly?
BL: One thing that was great about that, as you indicated, is that it was executed so quickly, which was a great learning experience for the corporation. But what was also important is that we showed it was permissible to put emotion and excitement back into our autos, to create a vehicle with dynamic properties, that was also priced at a level that made it a high-value proposition. Which is something that a lot of people did not think GM was capable of.
AOL: Let’s go back in time a bit, to your days at Chrysler, and talk about the Dodge Viper. It was conceived in early ’88, unveiled as a concept car at the ’89 Detroit auto show, and became a limited-edition production model in ’92. That was certainly a head-turning vehicle and a real screamer. Some would even say it was revolutionary vehicle. Do you agree, and what was it about that project that was so important?
BL: I am indeed proud of that one, but that was not so much a vehicle program as it was a marketing and PR exercise. This was the late '80s, and Chrysler was flat on its back again, after Lee Iacocca had helped rescue the company several years earlier. There was again the threat of bankruptcy, and a lot of folks, including a lot of media people, thought Chrysler was not capable of doing anything but making front-wheel-drive, four-cylinder K-cars.
So I thought, 'What can we do to shock people into understanding that the ability to execute great vehicles -- of any description -- is alive and well at Chrysler?’ And my answer was, 'Let’s create the most powerful, most expensive car in the U.S.' It was initially just intended to be a concept car, but it really resonated with the public. We got cards and letters, with $100 bills clipped to them saying, 'I want one of these, here’s my deposit.'
The main purpose of the Viper was to renew confidence in Chrysler, both with the public and in the financial community, and to boost the morale of our people internally. I think it succeeded on those levels.
AOL: One reason you’re popular with us auto writers is that most of us are also 'car guys.' But admittedly we have also liked covering you because you’re very quotable and have made some colorful statements. One of those was the comment you made about global warming. [In 2008, Lutz famously remarked that global warming was "a total crock of s---.”] Do you still hold that opinion of global warming?
BL: Well, I can’t really get into that too much as long as I am still gainfully employed by General Motors, but I can say that as time has gone by there are more people in the scientific community who share the same point of view I do. And the majority of the public right now does not believe that CO2 emissions from cars is the main source of global warming. Perhaps, at the time, I did not express my views eloquently, or with any degree of sophistication, but I am not the only skeptic on this topic.
AOL: Your championing of the Volt was not prompted by a concern about car emissions leading to climate change, but was instead a business decision. You could see there was a market out there for it.
BL: Correct. And if the government and the EPA say we must curb CO2 emissions, I have to set my personal beliefs aside and do what is required. But reducing dependence on imported petroleum is also important to me, and we also must look at fossil fuels as a finite commodity. We don’t know whether it will be 50 years or 100 years, or whatever [before there is a scarcity], but alternative ways of moving people around in their automobiles [other than by using fossil fuels] is obviously something we have to focus on.
AOL: In late 2008 and 2009, when GM was applying for Federal loans and facing bankruptcy, there were some who were calling for Rick Wagoner to step down. At the time, you disagreed with that, although Wagoner eventually was forced to resign. It’s been a while since that all went down. Have your thoughts changed?
BL: I think that Rick had all the right priorities and that he had the right long-term plan. But with hindsight being 20/20, I think that the company should have been moving faster in terms of winding down capacity, removing dealers, and all the things we’ve been doing post-bankruptcy. Rick was a brilliant strategist and one of the smartest people I have ever met, but looking back, the amount of patience he brought to the situation regarding those factors may have been excessive.
AOL: In his recently-published book, former Massachusetts Governor and Republican presidential candidate Mitt Romney claimed that an anonymous auto executive told him that the Obama administration’s task force was essentially running the show at GM and making the major decisions. Shortly after that was reported, GM flatly refuted Romney’s claim; the company said that was just not true. What are your insights into that?
BL: Well, as a condition of the loans and bankruptcy, the president’s task force initially did have certain goals, like to reduce number of dealers, and they did insist on certain restructuring steps we had to take as we were working our way out of bankruptcy. But in terms of them having the slightest influence on things like strategy and product decisions, that’s not true. The task force has long since been abandoned, and all of those folks have gone back to their former lives, and we haven’t heard word one from them since.
AOL: Obviously, bankruptcy is no-one’s first choice, but now that GM has been through it, are you confident about the company’s future?
BL: Bankruptcy is a perfect solution for fixing a company, and in this case, fixing some things that should have been fixed years ago. But one thing that’s wrong with it is that it wipes out the shareholders and that’s really unfortunate.
But the new GM, as it’s been restructured, is largely debt-free, so we’re in far, far better shape now. Our labor costs are on a par with those in the Japanese transplant facilities in the Southern states. Our margins were actually never that bad, but by the time you allocated fixed costs, we were upside down when we sold the vehicle. Now, we have lower fixed costs, so we have bigger margins, and that will definitely help the bottom line. I think GM is going to be a profitable and healthy auto company, but right now I couldn’t really put a time-line on that.
AOL: Is it safe to say that once Fritz Henderson resigned as GM’s CEO in December 2009 and your role was changed to an advisory capacity, that it seemed like you didn’t really have an opportunity to have a major impact any more? And that this was the main factor that prompted you to retire?
BL: Well, that was part of it. As Fritz said at the time, I’m much happier as an executive who is actually running things, as opposed to advising people on how to do it -- which is why I would probably make a lousy consultant.
Plus, the thing I set out to do, to shift the focus to product excellence and quality, to make the product the be-all and end-all -- that job has been completed. All of the leaders of the company have seen the result of how the focus on creating best-in-class products can succeed in the marketplace, and succeed financially. So, in terms of changing the focus of the culture, I think that’s already been accomplished.
AOL: Are you confident this mindset will continue at GM, or are you concerned that the company might slip back to the old way of thinking after you’ve retired?
BL: If I had any doubts or suspicions that it would go back, I would stay, and the minute I saw that happening, I would be right there, haranguing people and criticizing that.
Ed Whitacre [who took over as GM’s Chairman and CEO in December 2009] adopted a simple mission statement, once it was decided that we needed one that could be remembered by everyone, so that everyone knows what the company is all about. We had a discussion about that, and it took us about 10 minutes to come up with it. And that statement is this: Our plan is to build and sell the world’s best cars and trucks.
Even now, Ed will buttonhole individual employees, ask them their name, and ask them what they do, and then he’ll ask them, “What is our mission statement?” And he won’t be satisfied until he can walk into any assembly plant and pose that question to any line worker, and hear that as the answer.
AOL: After you've retired, will you still be interested in conceiving new vehicles on some sort of consulting basis? Or do you have other plans?
BL: I don’t really know yet for sure. Various people have expressed an interest in my services, but mostly in the area of communications, like making speeches and such. I will probably write another book. But, to be honest, I don’t see myself ever taking another full-time job.