DETROIT -- Bob Lutz, the former Chrysler Corp. president who was hired at age 69 to lead a product renaissance at General Motors, is retiring at the end of the year.
Lutz, 76, is GMs 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 Lutzs 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.
Lutzs early actions signaled the themes. Lutz seized on a designers 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, GMs Australian unit, to the United States as the 2004Pontiac GTO. Though the GTO didnt sell well, it showed GM the possibility of moving vehicles among regions.
In an interview today, Lutz called the GTO my proudest accomplishment.
Thats 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 GMs global product organization where work on GMs 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 well have a lot of them through the tail end of this year and next year, so in terms of low-volume production, well be producing them, we just wont be selling them, Lutz said. As far as Im concerned, the Volt is done.
Markets shares, brand repositioning
Despite Lutzs 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, Lutzs 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 brands future.
Outside observers credit Lutz with reviving GM product development -- and fret about GMs 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 GMs 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. Theres an underlying logic to this as powertrain re-emerges as an imminent function, and its important to integrate it so that all of these pieces work smoothly.