"The feds basically handed our market to the Japanese," he contended in his memorabilia-filled office adjoining the garage where he keeps his most important historic cars. "American automakers had to tear up their entire product lines, downsize, go from full-frame to unitized bodies, V8s to V6s, rear- to front-wheel drive with transverse transmissions. It was the biggest technological tear-up in history, and it triggered a lot of subsequent problems, like poor quality and reliability. You can't re-engineer that much that fast, test it properly and get the technology matured without dropping a lot of balls, and we clearly did.
"Prior to CAFE, American quality was as good as any anywhere in the world," he asserted. "We were still selling a decent quantity of American cars in Europe because Europeans considered a Buick or a Chevrolet or a Ford to be superior in reliability to European products, which they were. The Japanese experience was no disruption whatsoever. They were way on the good side of the CAFE fleet average, so they didn't have to change a single product. They just continued to build what they had always been building." Continue reading...
There was also the issue of currency exchange rates: "The other thing that just about did us in: the State Department, for geopolitical reasons, granted Japan a very favorable dollar-to-yen exchange rate, which equated to a cost advantage of about $4,000 a car. When you've got a $4,000 cost advantage, you can translate that into more content, lower price, more marketing, more profit or a blend of all of the above."
That brought to mind an "off-the-record" dinner back in fall, 2008 – shortly before his boss, then GM CEO Rick Wagoner, found himself being publicly flogged and begging for help before an incredibly arrogant and auto-ignorant Congressional Committee – where Lutz took the opportunity to vent his frustrations "on background" to a small group of auto writers. Is that discussion still off the record now that he no longer works for GM? "Go for it, he said." So I did.
"We're the only country in the world where the national government is hostile to its own automobile industry," he told us that night. "The Korean government is in bed with the Korean auto industry, the Japanese government is in bed with the Japanese auto industry, as are the European governments – through either support or partial ownership, as in the cases of Renault and Volkswagen. Why should we be the only auto industry that is competing not only against foreign competition but against the policies of its own government?" Great question.
"There is a complete lack of understanding in Washington on reality in the automobile business, what the technological capability is and what it isn't. The regulators have no idea what is technologically feasible. They listen to complete technological idiots like David Friedman, who says: 'They can round off the corners a little, and that'll give them two mpg. Then put in a six-speed transmission for two mpg. Then direct injection is two mpg. So with very little effort, they can easily get to 35 mpg.'"
What did he see in our CAFE-driven future? "The crystal ball is a little cloudy, but it's basically filled with hybrids, extended range electric vehicles and very small or medium-size cars with very small turbocharged engines. A minimum average of 35 mpg means you have to go way beyond that at the low end, and at the high-end – with full-size pickups and sport utilities – you need to achieve a 20 to 25 percent improvement.
"Everyone is in favor of achievable improvements in each vehicle class, but an arbitrary fleet average of 42 mpg is totally ridiculous. Nobody knows how to do a full-line fleet with the equivalent of 42 miles per gallon. That's ain'tgonnahappen.com. I tell myself that if something is impossible, nobody is going to do it. And when they get to the point where the legislation is tantamount to mandating that by 2015, all cars have to hover off the highway by two inches so they no longer touch the road surface, because we don't want to deteriorate the infrastructure, I think, 'Well, that's nice.' A 42-mpg full-line fleet average is in that category, so I don't worry about it. I just know it's physically impossible, so something will have to give."
What about man-made "global warming," which he once famously dismissed as a "crock"? "The global warming scare is going to provide the vehicle for massive taxation and transfer of wealth, which is why politicians around the world – everywhere but China, India and the former Soviet Union – buy into it, because they realize its moneymaking potential. If 'Cap and Trade' ever happens, anyone who owns a boat, an airplane, an outdoor barbecue, a lawnmower or more than a postage-stamp-size apartment is going to be paying carbon taxes. It will be a huge federal money generation scheme."
It would be safe to surmise that Lutz was then, and (like most of us) remains now, thoroughly unimpressed by the intelligence, integrity and motivations of the majority of the people we have elected to run this country, at all levels. "Politicians are a class of people who create horrible problems and gain votes while doing so," he said with a sarcastic chuckle, "then set about to solve those same problems while gaining votes for doing so."
Agree with him or not, the man has strong opinions born of vast experience and – now that he speaks for no one but himself – is unafraid to express them. He is now consulting part-time with British exoticar maker Lotus and looking forward to the June release of his new book, Car Guys vs. Bean Counters. Come to think of it, so am I.
Award-winning automotive writer Gary Witzenburg has been writing about automobiles, auto people and the auto industry for 21 years. A former auto engineer, race driver and advanced technology vehicle development manager, his work has appeared in a wide variety of national magazines including The Robb Report, Playboy, Popular Mechanics, Car and Driver, Road & Track, Motor Trend, Autoweek and Automobile Quarterly and has authored eight automotive books. He is currently contributing regularly to Kelley Blue Book (www.kbb.com), AutoMedia.com, Ward's Auto World and Motor Trend's Truck Trend and is a North American Car and Truck of the Year juror.