GM's Lutz: In It for the Long Haul

[doh]

Full storey here http://yahoo.businessweek.com/magazi...3/b3967023.htm


The carmaker's 74-year-old vice-chairman on what it'll take to rebuild the brand: Attractive new models, more focus, and a bit of patience

Perhaps no single personality in the auto industry conjures as much attention, praise, or controversy as General Motors' venerable new-car czar, Robert "Bob" Lutz. When he joined GM (GM ) in September, 2001, after retiring from Chrysler in 1998, he lighted hope among longtime GM watchers and company lifers that he could bring style and spirit to a carmaker derided for building a parade of prosaic models. Advertisement

During the past year, with GM losing almost $4 billion and market share sinking, Lutz has been under more pressure than ever to build the kind of hot cars that will restore luster to GM's brands and turn around its dismal financial performance. In some ways, he has succeeded, having pushed the stylish Pontiac Solstice through GM's turgid bureaucracy. And he has proven doubters wrong with the retro-styled Chevrolet HHR wagon, which has sold well despite criticism that it was a knock-off of Chrysler's PT Cruiser. But other cars, like the Pontiac G6 and Buick Lacrosse, are stylistically bland and haven't really hit in the marketplace.

Still, at 73, Vice-Chairman Lutz says he's energized and will fight to bring GM back as long as the company will have him. BusinessWeek Detroit Bureau Chief David Welch recently sat down with Lutz in his office at GM headquarters for a far-reaching interview about the car business, design, and whether GM can come back. Here are edited excerpts of their conversation:

We're hearing car companies brag about their horsepower and fuel economy. With gasoline prices rising and falling as they have, what does the market want?
It has gone bipolar on us. There's a race for horsepower and a race for fuel economy. The fuel-economy part is partly justified and partly economically sound. And it's also, in its own way, as irrational and emotional and economically unsound as the horsepower race. What earthly purpose does a 500-hp car have? You can also say at U.S. fuel prices of around $2 a gallon, is there really a rational reason for a 50 mpg car?

With so many choices and so much competition in today's market, how can GM stand out to consumers who have long ignored its offerings?
The differences in cars are more difficult to measure these days. That's where the power of brands comes in. For GM, the negative belief about all of our brands is that our car are powerful, heavy, and heavy fuel users. But we outperform Toyota (TM ) in many comparisons. The public's perception about what a company does is more important than the actual attributes of the vehicle. Whether hybrids make economic sense is irrelevant.

Speaking of brand image, how do you save Pontiac and Buick?
Pontiac and Buick need sharper focus. We have to stop trying to make them Chevys with a different badge. That means fewer models. On Pontiac, the Solstice is a good example, and it will be followed by others. The brand will be sharply focused in a sporting direction.

So you're no longer trying to get big sales volume from Buick and Pontiac?
We want to grow volume with Chevy, Cadillac, Hummer, and Saturn. Saturn is definitely a growth brand because you don't have to overcome preconceived public notions.

What about Buick?
The real challenge with Buick is that people automatically exclude it from consideration. That it's an old person's car is a notion that's constantly reinforced by the media. Breaking though that is very tough. It's easier to grow a brand like Saturn.

With both the Buick and Pontiac brands, you plan to drop the number of models and reduce the dealer network. That's needed, but does it also make it tougher to change the brand image when you literally have fewer dealers, fewer models, and a smaller presence in the marketplace?
Having fewer dealers isn't necessarily a bad thing. One reason Pontiac has a dilution of image is that GM years ago lost its focus. To make dealers as profitable as possible, Pontiac has had everything every other brand had. We destroyed the GM brand hierarchy. That's why we'll do better with fewer vehicles that are focused.

I still see that happening. Pontiac is supposed to be the sporty division, but Chevrolet has the Corvette and seven SS cars. Pontiac only has Solstice and GTO.
It's a different kind of performance. Chevy is more of a traditional American muscle car. You can get a Solstice with some engine upgrades that [will make it similar] to a Corvette.

[tgagneguam]

Lutz seems to be more effective when he keeps his mouth closed and gets to the business of making sure that designers and engineers are able to do their jobs of making great cars and trucks. Talk amounts to little more than nothing. It's when you bring amazing vehicles like the Camaro concept and Enclave concept to market; then, there's no need to convince people of GM's abiltiies. These products clearly speak for themselves.

[DuSpinnst]

Originally Posted by tgagneguam

Lutz seems to be more effective when he keeps his mouth closed and gets to the business of making sure that designers and engineers are able to do their jobs of making great cars and trucks. Talk amounts to little more than nothing. It's when you bring amazing vehicles like the Camaro concept and Enclave concept to market; then, there's no need to convince people of GM's abiltiies. These products clearly speak for themselves.

Unfortunatly the car "experts" don't see it that way.

Some jerk from intellichoice said thet even with the Enclave Buick could not attract younger buyers. Sometimes I wish these so called experts would drop dead.

[01cavalier]

It's part of his position to be positive about this turnaround, though he does seem to be rather up front about the challenges GM faces. I hope he acheives his goals.

[oudidntkn0w]

the author says he is 74 in one paragraph, and 73 in another.. which one is it!?!?

[mgescuro]

Originally Posted by oudidntkn0w

the author says he is 74 in one paragraph, and 73 in another.. which one is it!?!?

He is 73. He turns 74 in a month or 2.

[parakleets]

Originally Posted by DuSpinnst

Unfortunatly the car "experts" don't see it that way.

Some jerk from intellichoice said thet even with the Enclave Buick could not attract younger buyers. Sometimes I wish these so called experts would drop dead.

For brands to attract a certain clientele, the image and the entire line-up of the brand has to appeal to the targeted customer. Would you go looking for a new, and exciting CD in a music store that is filled with old men, and music that is better suited to the World War II generation??? I hope that the Enclave succeeds, as it is the most attractive Buick in decades, but their needs to be a change in how Buicks are sold and marketed. It burns my biscuits when I see dealer installed "Roadster" roofs, on new Buicks (and Cadillacs). Such chintz and obvious pandering to an older buyer, turns me off, as younger buyer. You never see Lexus, Acuras, Audis, Scions, etc... with fake convertible roofs and cheap, fake wirewheels, but GM sedans are cursed with these things, by the dealerships! I almost cried, when I saw a new STS, with a canvas roof glued to it! If the dealers don't accept the repositioning of the brands, then there is little that the GM corporate can do, to control the image.

[56 Starchief]

he is the kind of guy you could have a beer with.

now Wiggle-Wagon on the other hand....

[nadepalma]

This is a repost...it was originally in BusinessWeek:

Interview: Lutz talks to BusinessWeek

Take a look, the questions are the same.

[asim]

Thats what I thought...lol

[LI CADILLAC]

I really like Lutz. His products are always great.