Lutz: GM’s Image is Changing

[nadepalma]

SOURCE: The Car Connection

Lutz: GM’s Image is Changing
New vehicles are breeding a new attitude, says VP.
by Paul A. Eisenstein (2007-01-09)

Images aren't easy to change, but there's little doubt that General Motors' got a real boost from this year's North American International Auto Show, said the automaker's outspoken car czar, Bob Lutz. It has received wide praise for its new models, as well as kudos jurors on the North American Car and Truck of the Year jury who picked the Chevrolet Silverado as top truck and the Saturn Aura as best car during the opening session of the Detroit Auto Show.

"That shows that perceptions about General Motors are changing, especially among the media," said the septuagenarian executive, adding that positive coverage will help GM improve its image among potential buyers. "You can't do that with advertising anymore, even with all the money in the world." There's an internal payoff, as well, stressed Lutz. With the GM team "energized," he suggested, "that drives performance."

Even so, the vice chairman admitted there are some speedbumps in GM's path. Another surge in oil prices could hurt sales of the new Silverado and other full-size trucks. And while the company has trimmed about $9 billion out of its fixed, annual costs, it still has a severe cost penalty compared to competitors like GM. So-called "legacy" costs including retiree health care, puts the Detroit maker several thousand dollars behind the likes of Toyota in terms of what it costs to build a vehicle like the new Aura.

The executive said he is optimistic, if cautious, about the potential for the new E-Flex system shown in the Chevrolet Volt concept vehicle during the opening day of the Detroit Auto Show. The so-called plug-in hybrid-electric vehicle, or PHEV, could permit most U.S. commuters to drive to work solely on battery power. There is some serious development work to be done on Lithium Ion battery technology, Lutz cautioned, noting to meet customer needs, "The battery pack must last 4,000 charging cycles and 10 years."

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RELATED ARTICLE "Commentary: GM On the Rise" HERE

[bryce miller]

very true i hope up they keep up the good work but cannot stop anytime needs to go full steam til they are past toyota than still do not cool off!

[Media!]

Originally Posted by bryce miller

very true i hope up they keep up the good work but cannot stop anytime needs to go full steam til they are past toyota than still do not cool off!

Exactly, no matter what they should always want to be better than they are. Even if they become better than toyota they should never be "okay" with where they are.......................once your okay you don't try as hard and you fall down.

[BusyBody]

I think the Volt has sparked (no pun intended) the turn around, but GM needs to build on the momentum by getting the vehicle out there - this could change GM image and get people out to the dealerships.

[Media!]

Originally Posted by BusyBody

I think the Volt has sparked (no pun intended) the turn around, but GM needs to build on the momentum by getting the vehicle out there - this could change GM image and get people out to the dealerships.

Yes..................but please GM change the design of the volt, I absolutely hate the look, It looks like a concept car would look like in the late 90's.

[tgunnd39]

Originally Posted by nadepalma

And while the company has trimmed about $9 billion out of its fixed, annual costs, it still has a severe cost penalty compared to competitors like GM. So-called "legacy" costs including retiree health care, puts the Detroit maker several thousand dollars behind the likes of Toyota in terms of what it costs to build a vehicle like the new Aura.

I know that I cannot be the only one that noticed this, but has anyone given serious consideration to the idea that with GM at such a cost disadvantage as compared to the competition, particularly the Japanese, with regard to its legacy costs, and to have produced vehicles such as the Aura and Silverado with their strengths with that same disadvantage in place, imagine what the company can do when it does not have such costs to overcome? Interesting... Oh well, just a thought.

[asim]

Bob Lutz is definitely correct. GM definitely is having a good auto show season. Look at all the new cars they unveiled, including concepts. There's the Saturn Vue, Cadillac CTS, Chevrolet Malibu, Chevy Volt Concept, and just many others. At least GM is going to right way. I don't think we are going to hear "Bankruptcy" and "GM" in the same sentence without the words "No" or "not anymore" in between.

The media does seem to less biased against GM now. They are rating the new products from Saturn very highly. Also the media seems to be very impressed with the concepts BUT also the new CTS and Malibu. With the media writing all these good things about GM, hopefully the public will GM another chance.

[GMFreak8]

it currently costs about $2000 to $3000 more to build a hybrid than the company can charge its customers, he noted - but that doesn't mean GM should sit on the sidelines. That only hurts the automaker's reputation and, in the end, costs it even more money. "A major lesson for GM," Lutz said, is that "you don't base business decisions solely on financial numbers."

I'm relieved that someone at GM finally gets this.

[mkaresh]

Yes, a very important lesson. Let's hope they really get it and aren't just saying it because they know they should be doing this, and that the press knows they should be doing this. All of this could be true and yet they still could end up making decisions on short-term business cases.

Lutz is wise enough to restrict his focus to the media and GM's own people. It's too soon to say GM's image has improved among the general public.

On the Volt, I don't see that GM gains much from it. The main challenge is the batteries, and those aren't ready, and no one knows when they'll be ready.

On the Aura, I picked up a few things at the show. First, waiting to speak to a prominent journalist I overheard a conversation between him and another journalist who wanted to be on the NA COTY jury next year. Prominent journalist told him that "the Detroit contingent" generally decides who gets on the jury. No idea if this affects the outcomes, but it may.

Either way, I did hear from someone who did vote on the jury that the reasoning was that the Aura represented the most significant new model for its brand. The Camry represented no major advance for Toyota, and the Fit was like many previous Honda small cars, and wasn't even a new design in worldwide terms. In comparison, the Aura was a huge improvement over previous Saturn sedans, and had the potential to significantly improve the performance of the whole brand.

In essence, the award wasn't just about which car was the better car, but which car was the most significant product for its brand. This is how the Aura could win NA COTY without coming close to winning any magazine comparison tests. Think of it as like Time Magazine's POTY. It's not about who's the best person, but who's the most significant person.

[usa1]

Originally Posted by mkaresh

In essence, the award wasn't just about which car was the better car, but which car was the most significant product for its brand. This is how the Aura could win NA COTY without coming close to winning any magazine comparison tests. Think of it as like Time Magazine's POTY. It's not about who's the best person, but who's the most significant person.

I'm glad the Saturn won, but this explanation just makes me feel the NA COTY award is another useless award based more on politics than anything else. Motortrend has a long tradition of manipulating the data to make their choice look like the winner. Today, their award has very little creditbility. It looks like the NA COTY award is the same way. The best car should win, period.

Mark

[W.A.F.U.]

Originally Posted by BusyBody

I think the Volt has sparked (no pun intended) the turn around, but GM needs to build on the momentum by getting the vehicle out there - this could change GM image and get people out to the dealerships.

They could completely destroy that momentum by putting out a product that is not ready though.

[HEVguy]

Yea, their image is changing... from the doomsday BS of last year to a more balanced one again... and recognition of GM's excellent technology development pipelines as well. Good job GM! Keep up the good work and don't get complacent, lots of work to do still!

[Silverado14]

Originally Posted by tgunnd39

I know that I cannot be the only one that noticed this, but has anyone given serious consideration to the idea that with GM at such a cost disadvantage as compared to the competition, particularly the Japanese, with regard to its legacy costs, and to have produced vehicles such as the Aura and Silverado with their strengths with that same disadvantage in place, imagine what the company can do when it does not have such costs to overcome? Interesting... Oh well, just a thought. [/center]

Good point. It seems that GM only gets their mistakes highlighted, while all that they do well gets over looked. Example (as you pointed out) is designing and producing both the car and truck of year. That is big and good news (are you listening USA media?).

[Angry Dad]

Originally Posted by mkaresh

Yes, a very important lesson. Let's hope they really get it and aren't just saying it because they know they should be doing this, and that the press knows they should be doing this. All of this could be true and yet they still could end up making decisions on short-term business cases.

Lutz is wise enough to restrict his focus to the media and GM's own people. It's too soon to say GM's image has improved among the general public.

On the Volt, I don't see that GM gains much from it. The main challenge is the batteries, and those aren't ready, and no one knows when they'll be ready.

On the Aura, I picked up a few things at the show. First, waiting to speak to a prominent journalist I overheard a conversation between him and another journalist who wanted to be on the NA COTY jury next year. Prominent journalist told him that "the Detroit contingent" generally decides who gets on the jury. No idea if this affects the outcomes, but it may.

Either way, I did hear from someone who did vote on the jury that the reasoning was that the Aura represented the most significant new model for its brand. The Camry represented no major advance for Toyota, and the Fit was like many previous Honda small cars, and wasn't even a new design in worldwide terms. In comparison, the Aura was a huge improvement over previous Saturn sedans, and had the potential to significantly improve the performance of the whole brand.

In essence, the award wasn't just about which car was the better car, but which car was the most significant product for its brand. This is how the Aura could win NA COTY without coming close to winning any magazine comparison tests. Think of it as like Time Magazine's POTY. It's not about who's the best person, but who's the most significant person.

Total baloney.

Toyota bought the Motor Trend "award".

Saturn won the North American Car of the year award.

Big difference.

In essence, this award wasn't for sale.

[VibenPontiac]

Originally Posted by tgunnd39

I know that I cannot be the only one that noticed this, but has anyone given serious consideration to the idea that with GM at such a cost disadvantage as compared to the competition, particularly the Japanese, with regard to its legacy costs, and to have produced vehicles such as the Aura and Silverado with their strengths with that same disadvantage in place, imagine what the company can do when it does not have such costs to overcome? Interesting... Oh well, just a thought. [/center]

Exactly...GM has been fighting the competition with one hand behind their back for years yet the current management (management that a good deal of folks on this site calling "failures" just 12-18 months ago) have produced some of the best product GM have had in ages, while trimming the business operations to match the true size of the company's market share.