6. July 2011
I had a professor in grad school who maintained he was always right. As this was a literature class, not science or math, there was a wide range of interpretive possibility. But that didn’t matter. The prof was right. Invariably. Indubitably. And if someone disagreed with him, that person wasn’t merely wrong. That person had some defect. Some agenda. Some manifest. . .stupidity.
That prof came to mind when I read Bob Lutz’s new book, Car Guys vs. Bean Counters: The Battle for the Soul of American Business (Portfolio; $26.95), which is one of the most self-promoting books I’ve ever read. Donald Trump is model of self-effacing modesty by comparison.
Lutz had a tremendous career in the auto industry. He started that career in 1963. He worked at GM, BMW, Ford, Chrysler, Exide, and then back at General Motors, during which time he held a vice chairmanship and was the man who led the charge for product development.
It is not an exaggeration to say that Bob Lutz was one of the most-important executives in the history of the auto industry. Truly.
Lutz is admired by many people with whom he’s worked, designers in particular, because he championed their cause, especially during his last stint at GM. But I’d argue that that is not an unalloyed good thing.
Now some may take exception to my equating Lutz to my former professor because Lutz acknowledges his motto is “Often wrong, never in doubt.” An admission of feet of clay?
Not really. Because if you think about it, he never doubts the correctitude of his position on a subject, and never is always, often is occasional. And if he doesn’t doubt that he is right, then how can he be convinced that he is wrong?
In Lutz’s view, there are others who are to blame for the condition that GM got itself into. While the subtitle of the book might lead you to think that the bad guys consist of a cabal of accountants (“bean counters”), that is hardly the case. There are two groups largely to blame, the media and many of the vehicle line executives (VLEs) who were in charge of vehicle programs at GM during Lutz’s tenure there.
Because I am part of the first group, I will, of course, jump to deflect the charge. But not because of any real or imagined membership in a journalistic club. Indeed, if there were such a group, my membership would be cancelled because the automotive media loves Bob Lutz.
Love is not too strong a word. I wish I could come up with one stronger in this case.
Arguably, one of the reasons why former GM CEO Rick Wagoner hired and kept Lutz on was because Lutz has a flair for working with the media, who couldn’t wait for the next clever quip. So maybe instead of “working with the media” that ought to be “working the media.”
Bob Lutz at the 2010 New York Auto Show (Photo by Emile Wamsteker for Chevrolet)
One of the real challenges of being a reporter and dealing with execs is coming away from a press conference or event with something that can be put between quotation marks and ascribed to someone in a position of authority: execs tend to be tight-lipped or stating only the obvious and bland. Not Lutz. In an ungrammatical phrase that is used in the community, “Lutz gives good quote.” He is a natural headline-getter. And because he consequently makes the reporter’s job an easier one, the reporters love the man. Yes love.
Yet here’s Lutz in his book:
“. . .an anti-U.S. business press. . . .”
“The gullible (and pro-import) media. . . .”
“. . .fawning [over the Japanese builders] U.S. media. . . .”
“. . .the leftist, elitist media. . . .”
There was, Lutz says, the “the media-driven demonization of the SUV” that led to “media-driven decline of the SUV.” And I thought that skyrocketing gas prices had something to do with it.
Wait. As it turns out, it wasn’t the press that caused the truck market—SUVs and pickups—to go into the tank. Of GM in particular, he writes, “An over-focus on trucks was a dangerous thing. Sensitive to economic cycles and fuel prices, the truck market suddenly collapsed in 2008 before most of the new and competitive passenger cars had rolled out, triggering GM’s ultimate financial distress.” Imagine. Market forces and bad managerial decision making were the cause. Demonization didn’t precipitate the problem.
Lutz goes on to observe in the very next sentences, “By the turn of the century, GM had become a sort of bad joke. It was widely credited (by those who cared) for its excellent trucks, but reputations of car companies are based much more on their passenger cars. And GM’s, while not awful, were well below expectations and the repetitive ‘wait till next year hype’ always propagated by GM [sic]. The car magazines rarely had a kind word for GM in their evaluations, and the damning-with-faint praise was picked up by the mainstream media, which generally lacks the expertise to tell a good car from a not-so-good one.”
Let see: GM was making mediocre cars, and all of those customers that were making the Toyota Camry the best-selling car in the U.S. year after year were duped by the press—or did they just understand that gas was expensive and so great trucks that they probably didn’t need were really not particularly affordable, and that if they were looking for a car they probably didn’t want one that was, in the words of the GM vice chairman, “well below expectations”?
While it is easy and evidentially enjoyable to make sport of the press, Lutz’s criticism of the VLEs is something that is really remarkable. Briefly, a VLE is responsible for a program, soup to nuts, start to finish. And Lutz explains, “In the VLE’s list of objectives, attainment of which would be crucial to his or her future compensation, the words ‘the world’s most appealing sedan in the segment’ were nowhere to be found. Instead, quantified objectives covered cost (good!), investment, quality, warranty cost, assembly hours per vehicle, percentage of parts reused from the prior vehicle (believed to be the secret to Toyota’s success), and, important to note, time to program execution.”
While one would think that those are all good metrics, Lutz thinks that they led to cars that were uninspired. Which was often the case. But those cars also didn’t score particularly well vis-à-vis companies including Toyota on quality, durability and reliability, but that’s another story (Lutz isn’t particularly taken with quality experts, either: “’Total Quality Excellence’ consultants, who descended upon corporate America like a swarm of rapacious locusts. . . .” Maybe if more of those locusts had descended on GM, it would have had better quality products back in the day.).
Even if the words “the world’s most appealing sedan in the segment” were included in the VLE’s metrics, it probably wouldn’t have mattered, because, Lutz writes, “We had, as I recall, fourteen VLEs. There is not any car company anywhere in the whole wide world that has fourteen senior people capable of making sound aesthetic judgments on vehicle design.”
And what they did have was the one-and-only Bob Lutz. And in a more-perfect world, he would have made it all better. He writes in “product creation, where the future of the car company hangs in the balance, the much-scorned autocratic style of management works well, and numerous success stories confirm it. The big proviso, of course, is that the autocrat must be so steeped in the car business, and have so much taste, skill, intuition, and sense for the customer, as to be nearly infallible.” A soupcon of modesty there, eh?
1955 Coupe de Ville—when chrome mattered. (GM Photo)
What is the aesthetic sense that is at the core of Bob Lutz’s approach to creating cars that people would lust for? Chrome. Yes, bright work. He rhapsodizes about GM back in the day, of “the sheer brilliance of the cars produced by GM. They were brash, exciting, chrome-laden, at a time startling, as when Cadillac first introduced tail fins—inspired by the Lockheed P-328 Lightning fighter aircraft—on its 1948 models.” Of how, after the retirement in 1977 of Bill Mitchell, the man who ran GM Design after Harley Earl, “No longer would GM produce flamboyant, impractical designs with crazy fins, menacing chrome grilles, and interiors out of a Buck Rogers movie.”
Given the evidence of the market popularity of, say, Audis, do you think that maybe consumers aren’t that interested in “flamboyant, impractical designs with crazy fins, menacing chrome grilles, and interiors out of a Buck Rogers movie”? And for those of you, who may not know, Buck Rogers movies came out in the late 1930s and early 1940s—assuming Lutz isn’t referencing the movie/TV series of the 1970s.
According to Lutz, the first-generation Cadillac CTS “was well-proportioned, well-engineered, and dynamically on par with premium German sedans of the same class. The design was certainly polarizing and found great favor with some buyers.” All good, right? No. “What the car lacked was any charm or warmth in the form of tasteful chrome accents to offset the unfamiliarity of the ’stealth-fighter’ sheet metal.” Yes, chrome would make the car better in the world of Bob.
While some people might imagine that Saturn was ultimately doomed because the corporation starved it of development dollars, there was another issue: “None of the Saturns had any charm or ornamentation to delight the eye.” No chrome. He writes, for example, “some attractive chrome ornamentation. . . ultimately helped the Vue later in its life. . . .”
He meets with a VLE who asked him to look at a vehicle that was still in the design studio, and recalls the interaction, “It was nicely shaped but, without any ornamentation, it looked depressingly cheap. ‘It needs some chrome, Dave, especially around the DLO.’”
And there are other examples. But the point is, what he evidently thinks is impeccable aesthetic taste isn’t necessarily that widely shared among customers. No one wants their car to look “cheap.” But shiny baubles aren’t necessarily the solution.
One of Lutz’s “Strongly Held Beliefs” is: “Much of today’s content is useless in terms of triggering purchase decisions.” He explains, “Most customers want a vehicle of new, fresh, exciting appearance, with a rich, value-transmitting interior. They want a great powertrain, superb dynamics, and, obviously, safety and quality. The thought that huge advances in voice recognition or display technology or embroidered floor mats will somehow override other deficiencies (or worse yet, ‘averageness’) is wrong.” No one wants an ugly car, but couldn’t one argue that the Toyota Prius has become the best-selling hybrid because of its content, not its looks or superb dynamics? Or how about the case of Ford, which is certainly doing solidly well in the market, and has leveraged the SYNC system to considerable sales benefit even to some uninspired cars, a system that is essentially predicated on voice recognition and display technology?
Consumers want technology, perhaps more than they want “a great powertrain” and “superb dynamics.” And that’s something that Lutz seems not to understand.
Bob Lutz was a top executive at General Motors when it went into bankruptcy. While it is certainly the case that many of the decisions that led to that were made prior to Lutz being there, but as former Secretary of Defense Donald Rumsfeld once stated, “As you know, you go to war with the Army you have. They're not the Army you might want or wish to have at a later time.” And you either win or you don’t.
GM didn’t fail because of VLEs, bean counters, quality gurus, the press, environmentalists, or any other easily targeted groups. It didn’t fail because it didn’t design cars with outlandish ornamentation. It failed because of two things: (1) an economic environment that was beyond its controls and (2) a lack of insightful leadership.
So what about Bob?