Them are fightin' words: Lutz goes off on the 'experts'
Maximum Bob has had enough of automotive experts who question the guile of domestic execs, and as usual Mr. Lutz isn't afraid to share his thoughts with all who are willing to listen. At his recent speech at the Center for Automotive Research's annual management conference, Blogger Bob opened a GM-sized can on experts referring to Big Three executives as "Detroit Dinosaurs". Mr. Lutz asked if three independent companies with independent boards could all be "nearly imploded" at the same time because they're all the same level of stupid at the exact same time. He then mentioned macroeconomic factors (currency, labor costs, etc) that hurt the domestics while leaving imports unscathed.
We're definitely not among the "experts" to which Mr. Lutz was referring, and we tend to agree with our fellow blogger Bob on this point. Making cars and trucks is one of the most complicated businesses on this planet, and no matter how good or smart you are, it's hard to compete on an un-level playing field.
[Source: Edmunds Auto Observer]
Reader Comments (Page 1 of 3)
bocho23 5:58PM (8/10/2007)
MAXIMUM LUTZ FOR PRESIDENT!!!
Reply
F451 11:25PM (8/11/2007)
Laughable Lutz is at again with his bring-it-on attitude (Where have we all heard that before, and how much has it cost us to date?). Heres a person who has held some of the highest positions in the automotive industry yet has some lame excuse of why things didnt happen, or have happened the way they have. Heres a suggestion: Why doesnt Lutz stepdown from his position and provide his services as a consultant? Ill tell you why, because other than a couple of token gestures in asking of his services the phone would go silent as there are so many other directions that US automobiles can go given new blood.
I want the US to recapture its position, but it will take an entirely new range of players, and new management style, to do so. People like Lutz, and certainly Nardelli, are no longer the players of choice.
J.Crew 12:33PM (8/12/2007)
F451 - Lutz is the only guy who could get done what needed to be done at GM. How else would they have won the 2007 Car and Truck of the year award? You must have some clue as to the new product that they are now producing as well as what is being launched in the near future if you read this sight regularly. All of these new products are directly related to the great influence he has had over the last 4 or 5 years on the internal side of GM. He has done more for GM than anyone else could have and he remains one of their top executives because he is that good. Rick Wagoner was very smart to grab him after he left Chrysler. There will be a day when he steps down and it will be a sad one. His legacy at GM will be a long lasting one.
As for Nardelli, there is no track record for him in the auto industry so who knows what he will do. I think he will give them a huge internal ass kicking, but I don't know how that will go over as it is the product side that matters. That is where Bob Lutz has taken GM - from bean counter controlled to design and engineering controlled. Nardelli smacks of a bean counter and micro manager to me. That will not result in great products.
Todd 6:06PM (8/10/2007)
That pose is straight out of Star Wars...
"You have no idea of the power if the Dark Side!" - Darth Vader
Reply
Tagg 6:25PM (8/10/2007)
He is absolutely correct! While his comments don't totally address the claim of a few bland or cars missing the mark it does point out he facts. Now some here will say its just Detroit whining but the fact remains that the Yen is so undervalued (177.19 for 1.00 USD) so it makes it easier to export not just cars but electronics.
I also believe that fact that UAW contracts bind GM and Ford for the term of that contracts hurts as well. It doesn't allow them to adapt from year to year or quarter to quarter and essentially forces them to run 3 shifts at a SUV plant and sell them at a high discount or lay off 2 lines and pay them 90% of their wages. Its not the that the comapnies are "dinosaurs" as much as the enviroment they work in namely the UAW who restricts their ability to adapt.
Reply
Mike G 1:53AM (8/11/2007)
The old man is Not absolutely correct! You conveniently forget to mention that the US dollar is also very weak and undervalued, which would help US exports of cars - if internationals wanted to buy them. But they don't. The only reason the weak Yen helps Japanese carmakers is because they also happen to have popular product.
Derek 10:59AM (8/11/2007)
Mike G - you have conveniently forgot GM and Fords recent quarterly statements. They ARE selling their cars very well overseas. For GM I think every overseas division saw better profit than the year before.
J.Crew 6:46PM (8/10/2007)
He is referring to the East and West coast anti-Detroit media that have no clue about what GM has been doing of late. It will swing back when GM starts growing sales again next year. They will get through the UAW negotiations in a better position and next years numbers will start to show the results of this and real sales transactions, not the fleet numbers that are showing year over year declines. They will be happy when the stock is climbing back up. Bob is fighting mad and he knows what he is talking abut. He has his soldiers all lined up for the comeback and he has given marching orders to kick a$$!
Reply
Mike G 1:58AM (8/11/2007)
Um ok Monsieur Wishful Thinking. Hasn't Bob Lutz been talking about doing all that for something like the last five years or so? Where's the beef?
alex 3:56AM (8/11/2007)
@MikeG - it usually takes about 4 years from a car to go from conception to production. So we are just now really seeing the fruits of 4 years ago's labor. And if you look at the enclave, g8, 08' cts, aura, malibu, etc things are lookin pretty darn good as far as the general's product line up goes. as these new, better models continue to come out, its completely reasonable to think GM will see an increase in retail sales
J.Crew 12:12PM (8/12/2007)
Alex could not have said it any better. It takes time to put the right plan in action and they have done it as fast as they possibly could. The results are now being launched into the market with great results. Here is the beef - Car and Truck of the Year for 2007- at the NAIAS as voted on by all of the leading auto journalists independent of their magazines. The numbers will come as more new good stuff is launched.
Ligor 7:24PM (8/10/2007)
while it does sound like they are whinning all this time, the plain field has never been leveled
At least GM has some nice product coming out adn planned to come out inthe coming years so I believe they are on the rise.
I still feel that Ford and Chrystler have their work cut out as they are likely a good 3 years behind GM on the comeback.
Reply
Mike Botros 9:19PM (8/10/2007)
Actually I think Ford is on the right tract. They are making excellent products with great values and great looks. They just have the worst reputation to overcome. That's what's holding them back.
Matt 12:19AM (8/11/2007)
I agree with Ford making "excellent new products", with the exception of their fascia. Honestly, offer an option to make that cheap, ghetto plastiicy fake chrome grill REAL METAL/chrome or TAKE IT AWAY. Nothing in this world is stopping them from offering it as an over-priced option for Christ' sake. Honestly.
Mike G 2:01AM (8/11/2007)
Don't like the new Ford chrome grill eh? Buy one of the new vanilla plain Subarus, that should be bland enough for you.
James 7:39PM (8/10/2007)
GM, Ford and "the new" Chrysler may not be dinosaurs, but they are caught in the same kind of Yucatan asteroid effect, where all three may be wiped out at the same time for the same reasons.
All three are independent companies, yet each arrived at the same decisions regarding product (all trucks and SUVs all the time, while forging a legacy of lousy cars over the last thirty years), agreeing to the same union contracts, and all are affected by cheap gas turning expensive virtually overnight.
So, Bob, you are right -- and, in a sense, wrong.
Reply
Mike G 2:07AM (8/11/2007)
The reason for the Detroit fixation on SUV's was pure Greed - they could make three times as much per purchase as on cars, so they built crap cars to push people to go for an SUV. Clever eh.
But when fuel got too expensive, many people bought better Asian cars. Now Toyota is the world's biggest car maker. That's the short version.
N Z K 7:40PM (8/10/2007)
Lutz makes a good point, and like the authors at AutoBlog, I tend to agree with him.
On the other hand, it's also worth pointing out that if the Americans made cars people would actually want to pay money to buy, they wouldn't be where they are now, even taking the labor and healthcare issues into consideration. For upwards of two decades, they turned out inferior products. Their image (desirability factor) suffered damage that won't be repaired for decades as a result.
Had the Americans created cars fifteen years ago that were slightly pricier, but better made and made with better materials, we would not be having this discussion today. They have nickel-and-dimed themselves to the brink.
Reply
Gardiner Westbound 7:43PM (8/10/2007)
Toyota started work on the hybrid in 1990 with no prospect of a financial return, introducing it to the U.S. market ten years ago when gasoline was a $1 a gallon. GM still uses the Stone Age powertrain it introduced in 1955.
The Detroit-3 have fought every proposed safety and efficiency improvement for over 40-years, just as they are fighting the latest fuel economy proposals. That makes the current leadership the latest in a long line of dinosaurs.
Reply
That One Person 8:25PM (8/10/2007)
The Prius didn't pop up in America until 2001. Not 1997. How come no one gets that right? Yes, the Prius has been around since 1997 (in Japan).
Anyways, GM is still behind in the whole hybrid game. They have produced amazing systems for buses but can't seem to get those systems into their cars. Yet, they shove in those crappy mild hybrid systems. Ford at least had the balls to throw a true system into the Escape. Hey, if you get the chance, look up the Audi DUO series. They were diesel hybrids that came out in the mid-90s BEFORE the Prius. Or check out the 1915 Dual Power produced by the Woods Motor Vehicle company. The Prius was definitely not the first hybrid.
Oh and Ford and GM are fighting fuel economy standards? How about everyone's beloved TOYOTA that is also fighting beside GM and Ford because of those ridiculous fuel economy standards? Ah, that's right, Toyota is exempt. Heck, I think even Honda got into the fight.