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NINETY EIGHT REGENCY

GM Needs Permanent Car Czar Title

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GM Needs Permanent Car Czar Title

By John McElroy

WardsAuto.com, Sep 17, 2007 10:48 AM

Commentary

The new cars and trucks coming out of General Motors these days are amazingly good. Three years ago you couldn’t make a statement like that.

The credit largely goes to Bob Lutz, GM’s vice chairman of global product development, who was brought in to fix the system in 2001.

But Lutz didn’t do it alone. Ed Welburn’s design team is crafting beautiful bodies and interiors. Jim Queen’s engineering organization is developing them to high degrees of refinement. Tom Stephens’ powertrain group is fitting them with silky-smooth engines and transmissions.

Gary Cowger’s manufacturing staff ensures the product is coming down the line at the highest levels of quality and efficiency.

And that’s where the problem starts. The thinking inside GM these days is, “Everything is running so well, why do we need Lutz’s position anymore?”

I’ll tell you why. In every major corporation the financial people have more power than anyone else. They have their hands on all the money, and if they don’t like what you’re doing, you can’t get any. And that’s why you need a car guy who outranks them.

Finance staffs are really good at capturing all the costs that go into making an automobile. But they don’t have a system that’s good at capturing value. And perceived value is what customers really pay for.

That’s where a car guy like Lutz comes in; someone who intuitively knows what makes a great car. One small example: How many times has a new vehicle debuted with a cheap plastic interior because an auto maker needed to shave cost off a program?

And yet, that cheap interior never saved a dime. It made the car look so tacky, it took $3,000 in incentives to lure people into buying it.

Good car guys know how to prioritize trade-offs, so they can meet all the financial targets without sacrificing what it takes to come out with a great product.

But being a good car guy isn’t enough. He (or she) needs to be a top officer in the company, so he can pull rank and invest more in the product when it’s needed. Lutz is able to make decisions happen that lower-ranking product people could never get away with.

In all large organizations, there’s always the danger that “the system” becomes the focus of everyone’s efforts, instead of the customer. Over time, the system inevitably tries to pull the product-development process towards the easiest solution at the lowest possible cost.

That’s how you end up with the ‘91 Caprice, the ‘97 Malibu or the ’01 Aztek: competent vehicles that met specifications but never set customers’ hearts aflutter.

That’s why, when the 75-year-old Lutz decides to retire, GM needs to replace him with someone who has his knowledge and experience and is worthy of his rank. Hey, come to think of it, isn’t Wolfgang Bernhard available?

source:

http://wardsauto.com/commentary/gm_car_czar/

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It won't be Wolfgang Bernhard, but he will be from GM Europe. He is even more no nonsense than Lutz is. I actually admire that quality in a person.

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The same can be said for most big corporations. Once they are ruled by committee, it is usually down hill. It is one thing to avoid taking unnecessary risks, but if a company is to stay ahead of the market it must learn to take those risks.

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Good article and I agree for the most part. What Lutz has done for GM is fantastic. But, there aren't a bunch of Lutzs around. His position has so much power and influence that you have to get the right guy or else you're pretty well screwed.

Another side of this tale that McElroy didn't mention, while Lutz has been given pretty good run of the product story, there is a brilliant financial mind in Rick Wagoner that watches all that Lutz does. I know that Lutz is the one making a bulk of the product decisions, but it's nearly unheard of for a guy like Wagoner to let it happen. Big props to the way those two work together.

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The true genius of people like Wagoner is the realization and recognition that they can't do it alone: they seek out and nurture talent. They aren't afraid to surround themselves with people that are perhaps even smarter than they are.

To use an analogy, look at Madonna: She is a mediocre talent at best, but her staying power, her creative genius has been in surrounding herself with talent that make her look good. That takes true talent, IMO.

Too many big business types or big celebrity types trip over their own egos and take everyone down with them.

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Too many big business types or big celebrity types trip over their own egos and take everyone down with them.

So true
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Too many big business types or big celebrity types trip over their own egos and take everyone down with them.

So true
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