Lutz wakes up staid GM culture

Can GM change?
Robert Lutz says he is acting as a catalyst to change GM's bureaucratic culture. Following are his views from an Oct. 23 interview in Tokyo with Staff Reporter Dave Guilford.


  • Design talent: "GM is loaded with people who know how to do it, and in many cases had already started doing it, but ran into cultural resistance."

  • His role: "I see myself more as a catalyst for change, and catalyst is a damn good word. You know what a catalyst is from your chemistry classes: You can put several substances together and the chemical reaction won't take place until you introduce a tiny dose of catalyst."

  • Accelerated change: "My arrival suddenly sparked the forces of change - it was really amazing. Without me really doing that much, it has dramatically accelerated the pace of change that was already occurring."

  • Changing the rules: "A lot of it has to do with internal rules. A lot of people were working on changing them, and now this change is occurring at massive speed, where everybody is eliminating these restraints."

  • The low-profile organization man is out at General Motors. The intuitive, risk-taking individualist is in.

    Slightly more than two months into Robert Lutz's tenure, GM's numbers-crunching, market-researching, committee-consensus way of doing things has been shaken.

    Lutz, who last week replaced Ron Zarrella atop GM's North American operations, has initiated - and won - numerous skirmishes with GM's "do it by the book" culture. GM's culture, observers and former employees say, has adapted slowly to changing consumer tastes, used research numbers to justify dull products and imposed myriad small restrictions on employees' efforts.

    Consider the case of the "bird's beak."

    The term refers to the sliver of a vehicle's hood that projects between the windshield cowl and the fender. Lutz felt that GM's were too thick, leaving an unsightly gap, so he asked why.

    As Lutz recalled in an Oct. 23 interview at the Tokyo Motor Show, GM's specifications called for an extra layer of steel to be wrapped around the section to prevent rust. But, Lutz was told, today's treated steel makes the precaution unnecessary.

    "So I said, 'Well?' " Lutz recounted, drawing out the word in a tone that would be hard for a subordinate to ignore.

    The "bird's beak" spec was changed.

    First step: Design

    Last week Lutz added the title of chairman of GM North America to his initial post of vice chairman for product development. Zarrella departed to become chairman and CEO of Bausch & Lomb Inc. in Rochester, N.Y.

    Up to that point, Lutz's influence had been felt mainly in GM's design studios, where he has been revising designs and advocating more adventuresome work.

    Zarrella told of Lutz's first glimpse of the Cadillac STS, due in model year 2004. "We had pretty much finished the design," Zarrella said. "He said, 'You guys can make this a lot better by doing a few relatively minor things.' "

    At Lutz's urging, the "tumblehome"- the degree to which the vehicle tapers inward from the beltline to the roof, when seen from the front or rear - was increased and the taillights were redesigned. "You listen to it, and it doesn't sound like much, but it improved the car," Zarrella said.

    Lutz said such interventions violate GM protocol. But they seem to have energized, rather than discouraged, the design staff.

    Mark Reuss, executive director of operations for engineering and specialty vehicles, says Lutz's style emphasizes product over process. Many discussions take place literally around a car, he said.

    "He genuinely enjoys talking around a car or a truck, and that's fun," Reuss said. "That approach manifests itself in the discussion of the business end of doing a car or a truck."

    And Lutz constantly questions GM practices, Reuss said: "He will ask the question, 'Why did we decide to do this? Why did it look like this?' "

    A former GM designer said his friends at GM design think of Lutz as "kind of like the new messiah."

    "It's like a bunch of kids all geeked up to get to work," the designer said. "It's like someone cut your chain and said, 'Run for a little bit.' "

    Unsettling to some

    But having a messiah can be unsettling. One observer said "the urban myths are already starting" about Lutz at GM.

    And one GM design manager last week said employees are somewhat uneasy about the pace of change, even if they had been impatient with GM's ways in the past: "We always said we didn't want to work for the staid old GM. Somebody said it's like you dumped the company in a Cuisinart blender and turned it on."Actually, the blender has been running for some time, in the view of David Cole, director of the Center for Automotive Research in Ann Arbor, Mich. Cole sees Lutz's role as part of "an unfolding strategy" hatched by Chairman Jack Smith and CEO Rick Wagoner to remake GM.

    Cole cites one indicator of change: At the 1999 Management Briefing Seminars in Traverse City, Mich., Wagoner said GM had decided to produce the Chevrolet SSR pickup even though the business plan wasn't complete.

    "What that really signified to me was a departure from the tradition of 'Show me the numbers and I'll make a decision'," Cole said.

    Charismatic style

    George Peterson, president of AutoPacific consulting group in Tustin, Calif., said Lutz's charismatic management style represents a sharp break from "the faceless bureaucratic committee style that has been there for the last 30 years."

    But Lutz can't underestimate the staying power of GM's traditional culture, Peterson says. It will require considerable determination to make sure new initiatives don't get stifled, he said."One of the questions is going to be just how immovable the immovable middle is," Peterson said. "I'm not sure everyone at GM is just saluting and marching in lockstep with what Lutz wants."

    In Peterson's view, GM's main sin has been to overanalyze product decisions, missing the market or allowing bland vehicles to be built. He recalls touring GM design studios when the current Chevrolet Malibu was being developed - and asking why it was so nondescript.

    The answer, Peterson says, was that market research showed that Chevrolet owners didn't want to stand out.

    "GM has just transformed itself into an entire corporation of analysts, rather than an entire corporation of car nuts," Peterson said.

    That is one of dealer Geoff Pohanka's main gripes. Pohanka, the president of Pohanka Auto Group in Marlow, Md., says GM's clinics and focus groups let executives avoid risky decisions. That made the company slow to market - even with the light trucks that are now its main source of profits.

    "GM was very slow in revitalizing the truck lines," he said. "They were cranking out the cars when that's not where the market was going."

    'Show me the cars'

    Dealer Gordon Stewart, owner of Gordon Chevrolet in Westland, Mich., has criticized GM in the past. But he says he is "as excited about my GM investments as I've ever been."

    "There's certainly been people who have tried to do changes at GM before," Stewart said. "But they got brought down by the corporate culture."

    But Frank Ursomarso says Lutz's role as a change agent must translate into hot-selling vehicles. Ursomarso, president of Union Park Automotive Group in Wilmington, Del., says dealers will judge Lutz by what happens on the showroom floor, not by rhetoric.

    "I like all the things he's saying," Ursomarso said. "I agree with him. But show me the cars."

    You can reach Dave Guilford at dguilford@crain.com

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