Bob Lutz offers some candid comments on the Industry

[Proetus]

http://online.wsj.com/article/1,,SB1...ml?mod=COMPANY (sub req'd)

General Motors isn't the powerhouse it used to be in the American car market, as its recent financial and sales troubles attest. But what the senior executives of the world's biggest car maker think about where the industry is headed still merits attention.

At a recent conference in New York City hosted by Morgan Stanley auto analyst Stephen Girsky, GM's vice chairman for product development, Bob Lutz, offered some candid comments on industry trends and vehicle technology. Mr. Girsky set up a quiz-show format in which he tossed out the name of a feature and Mr. Lutz weighed in on whether consumers considered it important or not. Mr. Lutz's presentation was accessible by a conference call.



Mr. Lutz's responses indicate that GM has done an intellectual 180 on the issue of hybrid gas-electric vehicles. Not long ago, GM executives expressed little enthusiasm for hybrid vehicles, and pooh-poohed the Toyota Prius as a money loser that made little contribution to saving fuel and distracted the industry from efforts to build cars powered by hydrogen fuel cells.

Mr. Lutz, who last week took control of GM's vehicle development and engineering strategy world-wide, now acknowledges that "Toyota scored a major coup with hybrids even though they didn't have a business case." Having hybrid vehicles, he said, is now a symbol of whether a car maker is technologically capable and environmentally aware. GM recently announced efforts to mass-produce hybrid gas-electric SUVs by 2007. As for commercially viable fuel-cell cars? Maybe by 2010, Mr. Lutz says.

Mr. Lutz's embrace of hybrids comes late, but better late than never, from a GM shareholder point of view. In March, as gasoline prices jumped above $2 a gallon, Toyota more than doubled Prius sales to 10,236 vehicles -- even though dealers had just 13 days' supply of the hybrid cars on the ground by month's end, which is effectively no inventory at all.

The Prius outsold, in no particular order, the big Chevy Suburban sport utility vehicle, the Ford Expedition large SUV, and Toyota's own big Sequoia SUV, whose sales fell 12.5% last month. All those vehicles easily outsold the Prius a year ago. Domestic large SUVs, as a group, were stacked up on dealer lots at the end of March, with 120 days' supply, according to Autodata Corp.

The Prius also outsold other hybrid cars, but lower-volume rivals did well relative to their previous sales. Honda says it sold 2,896 of its hybrid Honda Civics, the third-best month ever for that model, while consumers bought 1,862 hybrid Honda Accords -- the best month yet for that model. Ford said its hybrid SUV, the Ford Escape, had its best month yet with sales of 1,569 vehicles.

Taken together, sales of these hybrid vehicles totaled 16,563 vehicles in March -- more than Ford's Lincoln brand or Nissan's Infiniti brand.

On other matters, Mr. Lutz, a devotee of fast cars, says horsepower is important. No shock there. But he's changed his tune on anti-lock brakes, which he once proposed removing from the standard equipment list of certain GM cars. Now, he says, anti-lock brakes are important, because they make it possible to have vehicle-stability control, which GM has said it will install on all its U.S. vehicles by the end of 2010.

On the other hand, don't look for heated steering wheels to become standard equipment on GM cars anytime soon.

Here's part of Mr. Lutz's exchange with Mr. Girsky, based on a recording of the conference call:

Mr. Girsky: Horsepower?

Mr. Lutz: Important.

Q: ABS [anti-lock brakes]?

A: (Pause) Was unimportant. Now it becomes important as we standardize vehicle stability systems, because you can't have [vehicle-stability systems] without ABS.

Q: Stability control?

A: Very important.

Q: Airbags?

A: Very important.

Q: The more the merrier?

A: I think there's a logical conclusion. I told our guys at some point we are going to design one huge inflatable thing that fills the whole [car] … so where if you hit a lamp post you find yourself pressed against the seat as if you were lying under the belly of a beached whale.

Q: Satellite radio?

A: Very important.

Q: Navigation [systems]?

A: Growing. [In] premium cars it's almost a necessity now. If you don't have it, the customer wants to know why.

Q: Heated steering wheels?

A: Not important. I think it's nice, but it's not a huge-selling feature. If you have heated seats, then it is.

Q: Auto dimming mirrors?

A: Normal expectation? No.

Q: All-wheel drive?

A: You can still live without it, but [it's] growing.

Q: Hybrid?

A: Growing. And whether the market becomes giant, or flattens out at 300,000 units a year -- which in the context of the American market is a pittance -- it has become symbolic of: "Is this company technologically capable? Is this company environmentally aware?" And it's a sort of go/no-go gauge. If you have hybrids you're OK, and if you don't you're not. I'd say Toyota scored a major coup with hybrids even though they didn't have a business case.

Q: They still may not have a business case.

A: Doesn't matter. Again, we have this artificial separation in our minds between what we spend on consumer influence in advertising and what we spend on the product. And sometimes the most effective form of consumer influence is to do things like the hybrid.

...

[mgescuro]

Fo the most part, I agree with Lutz except for Auto dimming mirrors.

Cars like Cadillac and Saab and Corvette should have them. No questions asked. Cars like Chevys and Saturns don't need them at all.

There really doesn't seem to be a business case for hybrids, but as the media spins its web, they become more and more important. It's already proven that if you're in certain parts of the country during parts of the year, the hybrid system is going to become less and less effective, especially if it's cold outside. But no one really cares about that, apparently.
Best road GM can take is create a hybrid with DOD, 6sp, and VVT. You're getting the best of both worlds across the board.

AWD is for dummies. People who can't drive need it. Just like rear parking assist. The more people become reliatn on technology to drive, the crappier drivers they become.

[BigAls87Z28]

I stopped after this one.

Mr. Girsky: Horsepower?

Mr. Lutz: Important.

Thats my man!! If anyone in GM should be in charge of cars, its this man. This "quiz" shows to me that he actualy has some grasp on what people want.

[lio45]

Q: Diesel?

A: Almost sine qua non in Europe and almost irrelevant in the United States for passenger cars.

What a lack of foresight.

[lio45]

The Prius outselling the SUBURBAN? That's unbelievable.

[lio45]

Originally Posted by BigAls87Z28

I stopped after this one.



Thats my man!! If anyone in GM should be in charge of cars, its this man. This "quiz" shows to me that he actualy has some grasp on what people want.

IMHO, the auto analyst missed two important questions for Lutz.

Q: Slushboxes with more than 4 speeds?

Q: Engines that can't trace their roots to 1962?

A: Important? Unimportant?...

I'm curious...

[tama z71]

interiors?

[BigAls87Z28]

Originally Posted by lio45

IMHO, the auto analyst missed two important questions for Lutz.

Q: Slushboxes with more than 4 speeds?

Q: Engines that can't trace their roots to 1962?

A: Important? Unimportant?...

I'm curious...

GM just cant make 6spd appear out of no where. Ford has taken the road of outsourcing someone elses 6spd for both the 500 and the Fusion, so dont get carried away.

And engines that trace there roots back to 1962? What does that have to do with anything? Why dont you knock the Hemi for its traceable roots? I mean, it was created in the 60's as well, isnt it a hunk of junk?
And explain how GM's engines that date back to the 60s STILL out perform Fords high tech OHC engines of less then a decade.

But hey, I mean its GM. They cant ever look good. Ford, eh...its Ford. Chrysler...eh, its Chrysler. But GM? If they take one step off the line...bam, bash bash bash.

[lio45]

Originally Posted by BigAls87Z28

GM just cant make 6spd appear out of no where. Ford has taken the road of outsourcing someone elses 6spd for both the 500 and the Fusion, so dont get carried away.

And engines that trace there roots back to 1962? What does that have to do with anything? Why dont you knock the Hemi for its traceable roots? I mean, it was created in the 60's as well, isnt it a hunk of junk?
And explain how GM's engines that date back to the 60s STILL out perform Fords high tech OHC engines of less then a decade.

But hey, I mean its GM. They cant ever look good. Ford, eh...its Ford. Chrysler...eh, its Chrysler. But GM? If they take one step off the line...bam, bash bash bash.

The current Hemi has nothing to do with the '60s ones. On the other hand, the 5.2 and 5.9 (respectively better known as 318 and 360) that were discontinued a few years ago were really getting long in the tooth, and I'm glad to see them gone.

GM can look good when they do good stuff, like most Caddies and the 'Vette (and the V8s that are powering them). When it comes to mainstream, they're serving the buying public reheated leftovers, and in this day and age of information, the public is aware of it.

Personally, I prefer pushrods in V6s. But I'm not the average Toyonda Camcorder buyer. I guess the everyday Joes prefer the "feel" of OHC, regardless of things like bottom end torque. I don't know... Fact is, offering more modern engines would probably help GM (if only by the perception from the media). And you and I and Lutz all know the 3800 shouldn't be found under the hoods of cars that are supposed to be competing with Lexus.

And BTW, I would just like to know what Lutz would have answered to those questions. I think -- that's only my opinion -- that it's an important matter. Right now, GM is perceived as the Wal-Mart of automakers (not good). I know GM can't make 6 spd trannies appear out of nowhere...I hate to be breaking the news to their engineers, but if they want "new" stuff, they'll have to...guess what... develop it.

[BigAls87Z28]

They are, and they are doing it with Ford. GM has a 6spd autos hitting there RWD cars first, with 6spd FWD coming shortly after.

No, the 3800 should not be under any Buick, despite the spin they put on it. I know that, and I know Lutz knows that.
The 900's, much like the F150 was for Ford, is a BIG item for GM right now. Ford stopped everything to make sure that teh F150 was the best. GM is doing htat now, but they are also fixing up and finishing other deadlines.

[lio45]

Originally Posted by BigAls87Z28

The 900's, much like the F150 was for Ford, is a BIG item for GM right now. Ford stopped everything to make sure that teh F150 was the best. GM is doing htat now, but they are also fixing up and finishing other deadlines.

Fingers crossed for the 900s. I'm REALLY anxious to see pics. Especially of the pickups (I'm not very fond of SUVs). I didn't really like the look of that '07 Tahoe (crappy, I admit it) spy shot -- too evolutive -- but after discussing that with you and others in another thread, I think you're right. Of course, the market will decide, so right now, we can only speculate. With gas prices going up, I hope GM realizes how important those hybrid versions of the 900s will be...

[AdmiralViscen]

I don't like his navigation answer.

[Ming]

Having hybrid vehicles, he said, is now a symbol of whether a car maker is technologically capable and environmentally aware. GM recently announced efforts to mass-produce hybrid gas-electric SUVs by 2007.

Good news, for certain. I didn't want to see a repeat of the "DOHC = High Tech" thing with GM on the losing side of hybrids. By 2007 means calendar year, I guess. So that means not at launch...?

[LoneWolf]

Sometimes I think I must be the only one on the planet who actually likes the 3800 V6 and HATES auto-dimming mirrors.

[FoMoCo Fan]

Lutz says there's no business case for hybrids, but at the same time, he says satellite radio is very important. There is no "business case" for satellite radio, both Sirius and XM have NEVER turned a profit, but they're being adopted faster than even cellphones. You have to start somewhere, and profits take time. GM lacks vision, Lutz included.