TCS Daily

Look Out, Detroit

By Brock Yates - January 17, 2002 12:00 AM

For decades it has been fashionable to brand General Motors a rust-bucket company run by gray-faced Midwestern accountants producing dull-witted automobiles and trucks while bi-coastal trendies scoop up high-tech German and Japanese machinery at an ever-increasing rate.

The great corporation has been fighting a slump that began in the 1970's. Despite endless reorganizations, epiphanies, mea culpas, new strategies, and inept course changes, General Motors' market share has slipped steadily and now clings to a tenuous 28%. Until the recent nosedive by Ford, GM faced the shocking prospect of surrendering its worldwide leadership role to its crosstown rival in Dearborn.

All this despite having once been a corporation that commanded over 60 percent of the domestic market and served as the supreme paradigm for big-time, American-style "know how." But it was this power that bred a deadly arrogance, as in the case of GM's legendary engineering chief, Charles F. "Boss" Kettering, who had grumped, "It isn't that we build such bad cars, it's they are such lousy customers."

The times change, however, and so do perceptions. As luck would have it, the "lousy customers" won.

A radical change was imperative. President and CEO Richard G. Wagoner Jr. recently rattled the Corporate cage in shocking fashion by picking Robert Lutz. In so doing, Wagoner broke with tradition both by hiring outside the team-playing, generally passive GM hierarchy, and by ignoring the company's own ironclad age-65 retirement rule. Lutz is just south of 70 years.

But Lutz has a resume that includes industry stints at BMW, Ford and Chrysler (before the controversial Daimler-Benz seizure). The Swiss born, Ex-marine pilot packs amazing credentials.

He is not a subtle man. He dominates a room. He does not suffer fools. He butts heads. His struggles with Lee Iacocca (who for all his charisma, was not a "car guy") and with former Chrysler chairman Bob Eaton were well known in the industry.

Following the Daimler-Benz takeover, Lutz briefly sought refuge as the boss of Exide Technologies but he was too restless, too creative, too much the hell-raising "car guy" to remain on the sidelines. So now he's back at what he does best.

He was at full power during the recent press reviews at the Detroit automobile show, touring glittering displays, trailed by a retinue of GM flunkies and clusters of journalists seeking his wisdom. His chiseled, gray-topped visage towered above the surrounding masses, only adding to his larger-than-life image -- a status he openly relishes. Lutz is now the most visible, most-quoted, most influential, most-feared man in the world-wide automobile industry and he plays the role with schoolboy ardor.

Ironically, as General Motors made its revolutionary course change, Ford reverted to form. After two decades of non-family leadership following all-powerful Henry Ford II's retirement, his grandson, William Clay Ford seized control of the firm in late October. With the Ford family owning over 40 percent of the Company stock, the young Prince's gaining the throne stands in marked contrast to GM's move outside its box in hiring Lutz.

It is standard mantra in Detroit to label all executives as "car guys with gasoline in their veins." But this is public relations gibberish since most senior auto execs have financial backgrounds, with little intense enthusiasm for automobiles. For example, the "car guy" label will never be applied to Bill Ford. He is at best a reluctant leader, a committed environmentalist and fly fisherman whose passion for vehicles lies in alternate fuel versions more in keeping with the desires of the Sierra Club than the American Automobile Association.

And unlike Lutz, who has worked all his life for such a role, Ford wears his crown uneasily and has spoken publicly about staying in the business for a limited period. He will then return to the sylvan outdoors and his other favored possession, the Detroit Lions football team he owns with his father.

This is hardly to imply that young Ford will not ultimately succeed in turning around the family business. He is a bright, intense individual backed by an excellent staff. But it is interesting to note the contrast in the strategies of the two companies at this juncture; each opting for a different path, each taking different management risks at a critical moment. If nothing else, it confirms the resiliency and dynamism that permeate American business, even among its most traditional and hide-bound members.

As a result, General Motors is now back in the game. Big time. Lutz will have it no other way. Within days after his ascendancy to power, he began to prowl the corporate design studios and engineering centers demanding changes and rationales for old practices. Smart engineers and designers, long stifled by committees and impenetrable chains of command that would shock even a postal inspector are now rising out of the ruck.

To counter this lethargy and conservatism, Lutz has issued thousands of pins to management personnel that read "Why Not?" They pose a direct challenge to the aged corporate mantra that "it can't be done," or that "we've never done it that way." Lutz has already abolished fussy, complex, market-research-based manifestos that stifled all product development unless it passed the muster of countless committees, surveys, polls and focus groups. Passion, innate knowledge of the market and confidence in one's own instincts are cutting through the fog bank of market-speak for the first time in decades at General Motors.

Thanks to Lutz's forceful edicts, GM stylists and engineers produced a pair of prototypes for the Detroit show in an unprecentend four months-a process that often took a year or more in the past. On display were a neat Pontiac roadster called the Solstice that will compete with the Mazda Miata and a four-seat convertible that revives the much-loved Bel-Air label for Chevrolet. Lutz has also mandated styling changes in Cadillac's new rear-drive CTS sedan and sent the next iteration of the Corvette due in 2004 back to the design studio for revisions. The Corporation's product lineup will rise and fall on such decisions. It is a responsibility with billions upon billions at stake, but one that Lutz -- and presumably the corporate hierarchy -- believe he id uniquely qualified to assume.

There is only one mission for Lutz: to dragoon the great corporation into building and selling the best automobiles in the world -- a lofty position it has not held since the boom years following World War II. He will make daredevil assaults on the market, as he did with Chrysler's Viper, Prowler, PT Cruiser, audacious-like pickups, and zoomy LH sedans when he helped make Chrysler the darling of the industry in the early 1990's.

Lutz reminds one of the legendary Vince Lombardi when he took over the coach's job of the Green Bay Packers in 1959. The team was bound up in tradition and imagery, but a loser on the field. Its future immortals, Paul Horning, Bart Starr, Jim Taylor, Max McGee, et al, were present but under-performing. By returning to the basics of football and fired with a laser-like commitment to excellence, Lombardi hammered a collection of skilled but unfocused athletes into one of the greatest football teams of all time. This was accomplished by sheer will power. The same passion to win brims within Robert Lutz.

Prediction: If Lutz is given his head and is not tripped up by jealous internal rivals, General Motors is on the verge of an unprecedented recovery that will shock the world. This is a player that Vince Lombardi would understand.


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