cusdaddy

Bob Lutz Interview
We talk with the General's Car Czar

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 to part 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 car business 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 knobs 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.

So I would say it's our market position, dealer network and the potential of the people. This is still one of the, maybe, two automobile companies left in the world that can do anything it wants to — anything.

cusdaddy

Great quote:

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 knobs 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."

Sarlacc

Good interview, and I think depending on which GM car your talking about they are getting better.

cusdaddy

Another great quote for those who don't want to read the entire article - In regards to the next Vette:

"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."

gavriil

"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."


Boy oh boy! That thing will be a beast! A few trick up their sleeves if 500HP is not enough! Holy Moly!

gavriil

Nice very nice. Go Bob!

heyitsme

i don't really like bob lutz, he's a big talker, yet there are little if any results.

"the Chevrolet Malibu is the first concrete example"

i think he should visit some car forums to read how many "Gee, I don't know, this is a pretty lousy-looking interior" comments that accompany a 2004 malibu posting.

Sarlacc

Dodge Viper was his baby
CTS-V
New corvette
I dont even like the new malibu, but its based on the opel and feels more like a euro then domestic for which it get pluses.

Like him or not lutz is no moron. I think he is putting gm back on the right track.

Steelers Wheels

I've got an semi-interesting story about Mr. Lutz's company..


A friend of mine drive a 2003 Grand Prix, and at 50,000 Kms(warrenty to 60,000), the radio quits. He goes in for his next service, and gets the car back, still no radio. Calls the dealer to inquire why they didn't fix it, and the dealer informs him that it was his responsibility to arrange for someone from AC Delco's service arm to show up at the dealership while his car was there. He politely responds by tell him that he didn't buy the radio off of AC Delco, he bought it from the dealership. The service manager told him sorry, company policy. To this day, no radio. At less than 61,000, the thermostat goes, and the same dealer tells him that it is unfortunate, but it won't be covered by warranty .. And now, a few months alter, nothing from GM..

Moral of that story, Bob Lutz will never see a penny of his money every again, and for that matter mine.( I went through a similar ordeal with a 94 Mustang, except it was the valves and alternator- but the domsetic experience was the same)

Joe5.0

Actually, I think the new Malibu's interior is quite nice for a midsize sedan that prices in the low to mid 20's. Its the exterior that I take issue with. I dont like styling that is different just to be different. The new exterior designs coming out of GM leave alot to be desired, for me anyway.

A couple things bother me with that article though. Alot of his statements on the new Malibu are based on opinion, not fact.

It may on paper have more hp & tq, but according to the most recent car mags the Malibu is really no faster than the Camry. As far as ride goes I don't have a specific answer for that, but I know for a fact that the Camry rides VERY nice.


I Think? What kind of cop-out is that? Either it is better, the same, or not as good. Has he not seen a Camry & Malibu enough to tell? It sounds like he doesnt want to get caught in a false statement.

Outperforms it? How? Last time I checked the Camry had a mid 120's 60-0 braking, so it would be a significant accomplishment to beat it in those terms. Price advantage I'm sure of, but still after 4 years the Malibu will have dropped much further from it's original price than the Camry will.

proaudio22

Lutz is nutz. Starting to show his age, and just babbling brand loyalty.

Thinking the malibu can hold a candle to the camry?

The C6 is gonna blow the doors off the Ford GT? Either he is full of shit, or the C6 is gonna be over $100K. Not likely.