Bob Lutz on Ford, GM, Carlos Ghosn, powerful execs and the future

It's been awhile since we've spoken with Bob Lutz, the product development whiz who changed the fortunes of virtually every automaker he's worked for — BMW, Ford, Chrysler, General Motors — in a nearly six-decade career.

We recently caught up with Lutz, 87, who is not quite retired. His VLF Automotive operation north of Detroit is looking for its next product after the Corvette-powered Destino performance luxury car wrapped up production this year.

We peppered the former Marine lieutenant with rapid-fire questions on the topics that are roiling the auto industry in 2019 and only lightly edited his answers. If you know Lutz, you know he's going to say exactly what he thinks, even if it rankles his friends and former colleagues. So buckle up: This will be a bumpy ride.

On Fiat Chrysler Automobiles' Ram outselling the Chevrolet Silverado:

I think the [Chevrolet] product could have been better. Ram has a drop-dead gorgeous interior. During my nine years at GM, I thought I cured them of the tendency to take cost out of the interior and convinced them the interior is where you put the money, where the customer can see and feel and touch.

I have no doubt the Silverado is a great truck, but it disappointed people in some respects. It doesn't have the visual impact of the new Ram or the F-150, and there is a uniformity of opinion that the interior is highly disappointing. I consider this a mistake that didn't have to happen.

I tried to convince GM that the interior is where the buyer spends the ownership period, not the outside. It's extremely important. If you look at the quality of the interiors Ford and Ram are putting into their large vehicles now, I cannot believe that GM is trying to get away with these low-cost interiors, similar to what they were doing before I got there.

On the other hand, GM maintains that Ram is heavily outspending them and buying market share. I am not close enough to the numbers to verify whether that is true or not. But the fact that the Chevy Silverado is in third place and is hard to sell worries me greatly.

On the Trump administration's efforts to freeze fuel economy standards:

It's intelligent. With the move to electrics, the demand for oil will no longer rise. It will stabilize. The United States is no longer dependent on Middle East oil, which at least gave us a political argument for oil conservation. But now that we are largely self-sufficient on petroleum and natural gas, you can't make the national security argument for tighter fuel standards anymore. The only argument you could make is [for the reduction of] CO2 and greenhouse gases, and you are either a believer or you aren't. The world splits evenly on that.

I think it is time to stabilize fuel economy standards; I'm not sure it is a good idea to roll them back. Suppliers and automakers have bet on a certain level of fuel economy standards.

In Europe, for instance, it is absolutely mandatory to revise the standards because the way they are, nobody can meet them without paying hundreds of millions in euros in fines.

On GM vs. Ford in design:

I am saying this for the first time in my career: I think Ford has an exquisite handle on design right now. You could first see it in the 2013 Fusion and the Lincoln version. The Mustang clearly out-designed the new-generation Camaro, and sales are showing it. The Lincoln crossovers were very well executed. The Lincoln Corsair is going to be very good. The Aviator is off the charts in every respect.

But that's what you do if you want to gain market share and win against the competition. You don't go for barely competitive and what can we get away with? You go out to kill with the interior. That's where a few hundred bucks can buy you thousands of dollars' worth of perceived value.

Ford is clearly on a roll when it comes to design. GM is used to being the design leader in the United States. Arguably a few years ago, it was true. But GM needs to pull it out. Ford is doing a great job, without a question.

On GM vs. Ford in business:

A lot of the difference in earnings between GM and Ford in the last few years is due to the fact that GM had the benefit of fresh product: full-size pickups, Colorado and Canyon, and of course, GM's sport-utility vehicles were much newer and better than Ford's. With the Tahoe, Yukon and Escalade, GM had, I think, around 75 percent of that segment. Ford's were old enough to vote.

Now Ford has the new Expedition, which is a phenomenally good vehicle, and the Lincoln Navigator, which when I look at it, I think that's what the Bentley Bentayga should have looked like. Great powertrain, beautiful, beautiful world-class interiors and a good exterior. That Bentley-esque grille never hurts, either.

I think now that GM is at the tail end of its product generation and is having some trouble with its [full-size] pickups, it's bound to affect profitably. In China, everybody's profitability is a little bit off. I expect Ford to financially rebound vs. GM.

On the Carlos Ghosn affair:

I wouldn't be surprised if he was innocent, but having observed Carlos for many, many years and knowing the size of his own importance in his own eyes, I wouldn't be surprised if he did something that was somewhat questionable.

On powerful executives, such as Ghosn and Sergio Marchionne, dominating an automaker:

I don't think we've seen the last of them. In fact, there's one still very much among us today: Elon Musk. I think larger-than-life personalities are the people who get things done, who really drive change and who really have big ideas and are able to have a transformative effect on companies. The well-balanced, nice, even soft-spoken administrative types are good for managing a given situation, but they are not good at driving change. That takes people like Lee Iacocca, Sergio Marchionne, Carlos Ghosn and so forth. Are they perfect? No. They always have immense qualities on one side that are usually balanced with weird behavior on the other side. That was the whole theme of my book Icons and Idiots — how skewed some of these personalities are. But it is the good parts of their makeup that drive the company, and the other part, as long as it isn't illegal, you learn to live with it.

On VLF Automotive:

We wish things were a whole lot better. When the Chinese took over what was Fisker and renamed it Karma, we were, despite a written agreement, deprived of the gliders — the bodies and chassis. We were not able to produce cars. We have had a number of false starts in other directions. But the company is alive, and I am hoping now that we can manufacture and achieve relatively broad distribution. But it's hold-your-breath. The question, really, is how much more money do I want to put into it?

On President Donald Trump's trade tariffs:

President Trump falls into the category of people we were talking about earlier: Iacocca, Ghosn, Marchionne. He's larger than life. He sets his own rules. He's brilliant in some areas.

I always distinguish Trump the president and commander in chief — that's one person — and Trump the tweeter is an entirely different person. They live in the same body, and people can't get their heads around that. Trump the tweeter doesn't matter. Trump the commander in chief does matter. And as far as I am concerned, if you look at the economy and what he's done on trade, what he's done on putting Russia back in the box, North Korea back in the box and finally taking on China in a trade war that somebody should have initiated 20 or 30 years ago — by the way, he's going to win it. Trump is for the American jobs, American industry, the American worker, American self-sufficiency. And to him, imported cars fall into the category of bad guys.

On FCA's urge to merge:

Fiat Chrysler has the scale to make it on their own; they are not a small company.

Fiat is very large and, of course, is subject to the lack of profitability that everyone incurs in Europe and Latin America right now. Fiat in the United States has basically collapsed, folded in on itself. Alfa Romeo may pick up the slack. It certainly has some compelling crossovers.

As far as electric vehicles are concerned, that's becoming commoditized. You can go to Bosch or Nippon Denso and say, "We'd like a midsized electric crossover. Can you help us?" [And they'll say,] "Sure, we'll take you through the catalog. You order these sized motors, this control system, etc., etc., and it will hook up to a battery pack from Hitachi or LG Chem." There's no deep invention required anymore, like when we did the Chevy Volt. The supply base today, worldwide — including China — is more than capable of giving you everything you need to produce an electric vehicle. FCA doesn't need to partner with anyone for that.

As long as FCA watches its costs and continues to get rid of stuff that loses money and invests in brands and products that are highly profitable, such as the Ram and Jeep — those two are gold mines.

On the upcoming midengine Chevrolet Corvette:

It will be successful to a degree, but all two-passenger sports cars are facing a limited future. The new Corvette will do well initially, but it will be rolling over the old customer base. I don't think anyone is going to get out of a Porsche 911 to buy a midengine Corvette. One of the problems the Corvette brand has is the same as what Harley-Davidson is facing: The owner body is getting older and older and older, and there are no young people coming in.

This car has been in development so long that there is a risk that the design will no longer be as new and as fresh as it should be when the car appears next month.

If I were still at GM, what I would be pleading for now is, let's not try and take Cadillac upmarket. It has a price band of about $450 a month. That's what it's worth.

But the Corvette brand has unlimited daylight on the upside. If I were there, what I would do is develop a dedicated architecture, super lightweight, super powerful, Porsche Cayenne-like, only much better and a little bigger, medium-volume Corvette SUV. Target worldwide 20,000 to 30,000 units, and price it starting at $100,000. Gorgeous interior. No V-6 powertrain. No low-end version. It has to be the stellar premium sport-utility made in the United States, and the Corvette brand could pull that off.