1. Get UAW to agree to plant closings in 2003 negotiations
2. Develop good relations with incoming UAW President Ron Gettelfinger
3. Keep cutting manufacturing costs
4. Develop expertise in advertising, marketing, design and product development
But helping make Lutz's ideas happen will be Gary Cowger, the new president of GM North America. A personable and practical manufacturing expert, he is well equipped to keep the company on task.
Cowger, 54, who replaced Ron Zarrella last week, will need all of his people skills to handle various challenges:
1. The UAW contract, which prohibits plant closings, expires in two years. GM needs to close plants, experts say.
2. Cowger also must develop good relations with incoming UAW President Ron Gettelfinger, who had been head of the union's Ford Motor Co. unit, to keep using GM's modular "global manufacturing system."
3. GM's manufacturing costs remain significantly higher than those of many Japanese competitors. GM uses 26.75 hours of labor per vehicle, compared with 17.37 at Nissan Motor Co., 19.91 at Honda Motor Co., and 21.6 at Toyota Motor Corp., according to the 2001 analysis of manufacturing efficiency in the United States by Harbour and Associates in Troy, Mich.
4. Cowger, a manufacturing expert, must develop expertise in advertising, marketing, design and product development, presumably with Lutz's tutelage.
With Cowger, GM North America now has a vastly different man at the helm than his predecessor. Zarrella was a marketing and brand strategist who had rocky relations with dealers.
Cowger, on the other hand, made a career of handling touchy personnel problems in Mexico, Europe and the United States.
In 1998, for example, CEO Jack Smith recalled Cowger from Europe to repair the company's badly broken relations with the UAW, appointing him group vice president of labor relations. In 1998, GM had blundered into strikes at two component plants in Flint, Mich., which nearly paralyzed vehicle assembly for 52 days and cost the company $2.5 billion in lost profits.
Cowger drew on his years of working his way up GM's manufacturing organization to build rapport with the UAW.
In January, he was rewarded for his work with the UAW with a promotion to group vice president for manufacturing and labor relations.
While peace has held with the UAW for the past few years, the contract expires in 2003. Ron Harbour, president of Harbour and Associates, says GM, as well as Ford and Chrysler group, will have to grapple with overcapacity during negotiations.
The contract was overly generous and left the Big 3 with high manufacturing costs, he said: "Right now, it is hurting all of them."
Sean McAlinden, director of the economics and business group for the Center for Automotive Research in Ann Arbor, Mich., said Cowger has an opportunity that manufacturing executives often have dreamed about.
"Thanks to Gary's communications skills, the company's saved billions," McAlinden said. "And they would have made billions if they'd had the right products. Now he's got a little control over that."