Should Bob Lutz run General Motors?

[nadepalma]

Source: http://www.leftlanenews.com/2006/04/...eneral-motors/

Should Bob Lutz run General Motors?



GM Vice Chairman Bob Lutz should take over as General Motors CEO if Rick Wagoner steps down, says Forbes columnist Jerry Flint. “Will GM replace Wagoner with a leader of the Carlos Ghosn type, someone who understands the auto business and can lead effectively?” asks Flint. “Or will it be another business-school M.B.A. from the financial side of the company, the type that has led GM so ineffectively for decades?” Flint says that if there is no turnaround at GM soon, something will have to change. “If it were up to me, Bob would be the new GM boss,” writes Flint. “Lutz knows the car business as no other American […] He isn’t a college-trained engineer–for which some snub him–but a self-taught car guy.” However, one should not expect Lutz to push for his own promotion to CEO. “Lutz is not a backstabber, and this is a business in which backstabbing is fine art,” writes Flint. “He’s loyal to the core, and he won’t push Wagoner down the stairs.”

[nadepalma]

Here is the article it refers to:

Source: http://www.forbes.com/2006/04/03/gm-...0403flint.html

What About Bob?
Jerry Flint, 04.03.06, 2:30 PM ET



New York - General Motors just announced it is selling 51% of GMAC, its moneymaking vehicle-financing arm, for $14 billion cash over three years, including $10 billion by the end of this year. The buyer is an investment group led by Cerberus Capital Management.

GM (nyse: GM - news - people ) should pour every penny of the sale's proceeds into new vehicles and new technology. Unfortunately, it is likely that much of the money will go into what I call the burial fund--money to pay off workers to retire early and give up benefits; money to guarantee medical care; money for the infamous Jobs Bank that pays workers for years not to work.

In fact, the GMAC deal will probably encourage the United Auto Workers union to hang tough against Delphi (nyse: DPH - news - people ), the giant parts maker. Delphi, once part of GM and still a significant GM supplier, is bankrupt and wants to cut pay and benefits drastically. GM is already chipping in to take some of the Delphi people back on its payroll. Supporting Delphi could eat up most of the proceeds from the GMAC sale.

Last week GM sold a piece of its GMAC mortgage business, and it recently sold or is selling its interests in Japanese automakers Suzuki (other-otc: SZKMF.PK - news - people ), Fuji Heavy Industries' (other-otc: FUJHY - news - people ) Subaru, and Isuzu Motors (other-otc: ISUZF - news - people ). In all, GM is picking up about $20 billion from these sales, including GMAC. That is pretty much the value of GM's common stock, so theoretically GM could take the money, buy back its stock and take the company private. Don't bet on it.

What happens now?

The key issue is still management. It is widely expected that some time this year, if there is no sign of a turnaround, Chairman and Chief Executive Rick Wagoner will step down. Will GM replace Wagoner with a leader of the Carlos Ghosn type, someone who understands the auto business and can lead effectively? Or will it be another business-school M.B.A. from the financial side of the company, the type that has led GM so ineffectively for decades?

If it were up to me, Bob would be the new GM boss. Bob, of course, is Robert Lutz, GM's vice chairman in charge of global product development. He's responsible for the vast improvements we are beginning to see in GM vehicles.

Lutz knows the car business as no other American: He was an executive vice president at Ford Motor (nyse: F - news - people ) and president of Chrysler. In his younger days, he led the great BMW sales charge in Europe. He isn't a college-trained engineer--for which some snub him--but a self-taught car guy. He's Detroit's best, a hot driver who also owns a jet fighter and a helicopter, an ex-U.S. Marine fighter pilot and the best-looking 74-year-old I know.

Ah, there's the rub. He's 74.

One more little problem: Lutz is not a backstabber, and this is a business in which backstabbing is fine art. He's loyal to the core, and he won't push Wagoner down the stairs.

Lutz has run into some problems at GM, which is natural for someone who attracts the press like a rock 'n' roll god. In an age when public relations departments carefully coach and script every public word uttered by their chief executives, Lutz never learned how to be politically correct. Sometimes Lutz speaks with too much candor, such as the time last year when he called Pontiac and Buick damaged brands--which, of course, is the truth. Dealers thought Lutz wanted to kill Pontiac and Buick, and they went berserk. In fact, Bob was working hard to save those nameplates, but he was just being honest.

To help boost Pontiac, Lutz personally pushed through the Pontiac Solstice roadster, which is a sensation. Of course, the Lutz magic doesn't always work as planned. Another effort to give Pontiac some quick pizzazz, by importing a fast coupe from Australia and calling it a GTO, was less than a success. Right now, he is pushing global platforms, working to adapt European structures for cars here in America. We'll get an idea about whether that is a viable plan this fall when new European-type cars are built here as Saturn models. My guess: They'll revive the brand.

Lutz built the great team that saved Chrysler in the 1990s. He fought with the charismatic Lee Iacocca, and they didn't love each other, but they were a team. His last great car battle at Chrysler was to bring out the PT Cruiser, which became immensely successful. Lutz was the obvious candidate to replace Iacocca when he retired, but Iacocca delayed his retirement. Anyway, no one whom Iacocca knew would ever be good enough for him. When Iacocca finally brought in Bob Eaton from GM to run Chrysler, Lutz became Eaton's loyal No. 2.

With the Daimler buyout of Chrysler, Lutz got rich--tens of millions rich--though it wasn't his decision to sell the company. He just couldn't sit still or play golf. He tried to save Exide (nasdaq: XIDE - news - people ), the battery maker, but when Wagoner asked Lutz for help, he was ready to carry the flag again, and he officially joined GM on Sept. 1, 2001.

His immediate effect on GM was electric. The company pushed out Ron Zarrella, the generally despised president of North American Operations, and junked its ridiculous product-development program, which had made real product development all but impossible. For the first time in ten years, car people began to have some leverage over the accounting and marketing people at GM.

Even with Lutz, GM is still struggling. I say that without Lutz, the company wouldn't have a chance. Today the product is improving, quality is up, designs are much better, the interiors are good and the fit and finishes are top flight. So far, there haven't been any "gotta have" cars--to use a Lutz term--but many of the new vehicles are at least moderately successful. The new big trucks are world class.

I'm not saying Lutz will become head of General Motors. But I'll tell you this: If he did, they'd have a "Semper Fi" leader who would say "follow me" and mean it. And people would follow him.

GM would come back--or go down fighting, not whimpering.

Moses was 120 when he led his people to the promised land.

So why not Bob?

[mgescuro]

He can't be CEO. GM has a maximum age limit on the position.
Interim CEO? Maybe.

But Lutz is doing very well as Product Head. So leave him there for now.

[camaro_freak]

I agree with you mgescuro .. leave him where he is!

[asim]

I agree with mgescuro also, but imagine if a car guy ran GM. GM would be building cars for the art, not trying to be a business.

[toronado10]

Leave Lutz to fixing the product and let Rick fix all the costs and UAW negotiations. They are both good at what they do.

[Globalist]

I have a great respect for Bob Lutz, but I can't see him heading GM. I think he is doing a good job on the product side and his big accomplishment would be to take care of GM future products and nurture future design leaders.

This kind of position is more a politcal role, and I simply can't see Bob sitting calmly in a meeting with UAW to solve anything. He will blew up everything after 30 minutes :-)

[plane]

Originally Posted by mgescuro

He can't be CEO. GM has a maximum age limit on the position.
Interim CEO? Maybe.

But Lutz is doing very well as Product Head. So leave him there for now.

Exactly. Bob is a hands-on ops guy.
Overlapping perhaps, but different skill sets bring success in operations versus CEO. You want Ed Welburne and Bob Lutz doing the up front and personal kicking @$$ and taking names with fantastic, emotive design.

[Silverado14]

Would be a great CEO. But as long as Lutz is at GM, they WILL have at least a fighting chance. As the man who has saved the Camaro, Bob is the man! He will save GM with (...here is a novel idea!) cars and trucks people can't wait to see and drive!

[99Hugger]

I vote Bob for President

[2648562]

If he played a role in the production Aura's styling he should be fired--what a dissapointment.

[mkaresh]

Every auto manufacturer is run as a business. It's not either/or. The numbers and the product both have to work. People who think it's just a matter of cutting "car guys" loose to do whatever they want don't have a clue.

Not that Bob Lutz doesn't understand this. While he was at Chrysler they churned out cheaper product than anyone. But he seems to understand the need for a quality interior these days.

[smk4565]

He should not be CEO, Wagoner should have about 2 more years, if they aren't much better off, he has to go. Lutz seems good being in charge of products, but every Buick and Chevy is bland with a 4 speed automatic. Lutz does well in some areas, but he isn't coming up with top notch cars all accross the board, and he is too old to be CEO.

[New_Mexico_Sunset_on_Rt66]

Yes. Second?

[Jayorbird]

maybe later, if GM don;t improves, Lutz should take over...