Bob Lutz, hired to lead GM product revival, is retiring
Powertrain chief Stephens will replace 76-year-old icon
Lutz, 76, is GM’s vice chairman of global product development. In a statement, the company said Lutz will become vice chairman and senior adviser April 1. Lutz will continue to report to CEO Rick Wagoner.
He is leaving a company that is being kept out of bankruptcy by $13.4 billion in emergency federal loans -- and struggling to survive amid the lowest U.S. sales rate in 26 years. GM and Chrysler LLC are scheduled to present future viability plans to the U.S. government on Feb. 17.
GM said its global powertrain chief, Tom Stephens, will replace Lutz as vice chairman of global product development. Stephens, 60, will report to COO Fritz Henderson. Stephens is executive vice president of global powertrain and global quality. In his new assignment, Stephens will maintain responsibility for global quality.
GM spokesman Tom Wilkinson said that Lutz, who turns 77 on Thursday, Feb. 12, is ready “to start moving toward retirement and do it in a systematic manner to make sure the transition is smooth.”
Lutz gave GM an instant shot of product credibility and glamour when he moved into the vice chairman role on Sept. 1, 2001. His candor occasionally caused headaches for CEO Rick Wagoner — his description of Buick and Pontiac as “damaged brands,” for instance, or his impolitic rejection of global warming.
More often, Lutz handled product introductions at auto shows smoothly, and charmed journalists with humor and a wealth of industry knowledge.
Knocking down barriers
But Lutz’s internal role was more important. From the start of his tenure, he prodded the GM bureaucracy to move quickly, knock down barriers among its global regions, and refuse to compromise on design.
Lutz’s early actions signaled the themes. Lutz seized on a designer’s sketch to push the Pontiac Solstice roadster onto the stage of the 2002 Detroit auto show as a concept in a few months, then championed it as a production vehicle.
Likewise, Lutz pressed to bring a vehicle from Holden, GM’s Australian unit, to the United States as the 2004Pontiac GTO. Though the GTO didn’t sell well, it showed GM the possibility of moving vehicles among regions.
In an interview today, Lutz called the GTO “my proudest accomplishment.”
“That’s the car that got us convinced that we could use the global product development scheme,” he said. “Up until then, no one had tried anything like that.”
Previously, product development and testing functions were “duplicated on every continent,” Lutz added.
“The work on the GTO with Australia forged an important bond and got us to unify everything: common processes, and common testing. I am proud to say that was my initiative.”
Global product development
That experiment has evolved into GM’s global product organization where work on GM’s new mid-sized vehicle architecture has been done in Germany, with products going into production in Europe and North America.
Lutz shook up GM conventions with the audacious Cadillac Sixteen concept car, unveiled at the Detroit Opera House in 2003. Outfitted with a 1,000-hp V-16 engine and silk carpets, the superluxury sedan represented a dream for Cadillac to establish itself as a rival of Bentley and Rolls-Royce. But GM never produced the vehicle.
As Lutz ends his tenure, he can boast several well-received vehicles such as the Chevrolet Malibu, Buick Enclave and current Cadillac CTS. Lutz empowered designers, prodding GM to improve the materials and build quality of vehicle interiors.
And despite his skepticism toward green issues, Lutz pushed GM to develop the Chevrolet Volt plug-in hybrid, due next year as a production vehicle. Lutz, who had said he wanted to stay at GM until the Volt launch, today said the car is “well on track,” with internal test vehicles on the way.
“We will be driving finished Volts this summer because we’ll have a lot of them through the tail end of this year and next year, so in terms of low-volume production, we’ll be producing them, we just won’t be selling them,” Lutz said. “As far as I’m concerned, the Volt is done.”
Markets shares, brand repositioning
Despite Lutz’s product achievements, GM continues to have a hard time attracting disaffected U.S. buyers. Its U.S. market share (excluding Saab) edged up in 2001 and 2002, hitting 28.4 percent. But since then it has dropped steadily, ending last year at 22.1 percent.
Similarly, Lutz’s plans to reposition several GM brands have had mixed success. Pontiac, for instance, was at one point meant to be a rear-drive performance car brand but now will become a niche marque with one or two vehicles. The attempt to give Saturn a European luster also has stalled as GM ponders the brand’s future.
Outside observers credit Lutz with reviving GM product development -- and fret about GM’s future without him.
New York automotive analyst John Casesa called Lutz “the last of the breed in Detroit: a product-driven executive who understands the customer.”
“You worry that GM will lose the product momentum that it had just begun to build,” Casesa said.
Jim Hall, an analyst at 2953 Analytics in suburban Detroit, said: “He put conscience back into product development at General Motors, and the question is: Will it stay there?”
GM, meanwhile, said it will integrate powertrain engineering and manufacturing into GM’s global product development structure. Stephens will be responsible for global powertrain engineering in addition to global design, product engineering, product planning and program management.
Employees in powertrain manufacturing will report to Gary Cowger, group vice president of GM global manufacturing and labor relations.
Until now, powertrain had its own manufacturing organization. For example, all powertrain plant managers used to report to Stephens. Starting in April, they will report to Cowger.
Other staffs that support the GM powertrain organization will be integrated into their respective global functions.
“The point is to complete the convergence of global engineering into one organization,” Wilkinson said.
“Powertrains are becoming much more important as we deal with CAFE regulations, energy concerns, hybrid systems, electrification and so on. There’s an underlying logic to this as powertrain re-emerges as an imminent function, and it’s important to integrate it so that all of these pieces work smoothly.”
GM BIOGRAPHY: Robert A. Lutz GM Vice Chairman, Global Product Development
Robert A. Lutz was named General Motors vice chairman of product development on September 1, 2001. On November 13, 2001, he was named chairman of GM North America and served in that capacity until April 4, 2005, when he assumed responsibility for Global Product Development. He also served as president of GM Europe on an interim basis from March to June 2004.
Prior to rejoining GM as vice chairman, Lutz was chairman and chief executive officer of Exide Technologies. He served as chairman until his resignation on May 17, 2002, and as a member of Exide's board of directors until May 5, 2004.
Lutz joined Exide after a distinguished career with the former Chrysler Corporation from 1986 to 1998, where he reached the position of vice chairman. Lutz also served as president and chief operating officer, responsible for Chrysler's car and truck operations worldwide.
Lutz led all of Chrysler's automotive activities, including sales, marketing, product development, manufacturing, and procurement and supply. He began his service with Chrysler in 1986 as executive vice president and was shortly thereafter elected to the Chrysler Corporation board. His 12 years with the company are chronicled in his 1998 book, Guts: The Seven Laws of Business That Made Chrysler the World's Hottest Car Company. Guts was revised and updated in 2003 and retitled, Guts: 8 Laws of Business from One of the Most Innovative Business Leaders of our Time.
Before Chrysler, Lutz spent 12 years at Ford Motor Company, where his last position was executive vice president of truck operations. He also served as chairman of Ford of Europe and as executive vice president of Ford's international operations. From 1982 to 1986, Lutz was a member of Ford's board.
Lutz began his automotive career in September 1963 at GM, where he held a variety of senior positions in Europe until December 1971. For the next three years, he served as executive vice president of sales at BMW in Munich and as a member of that company's board of management.
He serves as chairman of The New Common School Foundation and as a trustee of the Barbara Ann Karmanos Cancer Institute. He is also a member of the board of trustees for the U.S. Marine Corps University Foundation and vice chairman of the board of trustees for the Marine Military Academy in Harlingen, Texas.
Lutz received his bachelor's degree in production management from the University of California-Berkeley in 1961, where he earned distinction as a Phi Beta Kappa. He received a master's degree in business administration, with highest honors, from the University of California-Berkeley in 1962. He received an honorary degree of doctor of management from Kettering University on June 21, 2003, and an honorary doctorate of law from Boston University in 1985. The SAE (Society of Automotive Engineers) Foundation named him the recipient of its 2006 Manufacturing Leadership Award, which recognizes individuals who have made meaningful contributions to the development of the automotive industry.
He also served as a jet-attack aviator in the United States Marine Corps from 1954 to 1965 and attained the rank of captain. Lutz was born on February 12, 1932, in Zurich, Switzerland.
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