Bob Lutz calls GM stupid
#1
Speaks French in Russian
Thread Starter
Bob Lutz calls GM stupid
GM learns tough lessons in marketing strategies
General Motors learned important lessons about efficiency and marketing strategies from its global divisions.
BY WARREN BROWN
Washington Post Service
http://www.miami.com/mld/miamiherald...s/14077943.htm
General Motors learned important lessons about efficiency and marketing strategies from its global divisions.
BY WARREN BROWN
Washington Post Service
SAINT JEAN CAP FERRAT, France -- It was a good two days for Robert Lutz, General Motors vice president for product development.
The automotive media applauded the Geneva International Motor Show introduction of one of GM's divisional concept cars, the sleek, all-methanol-powered Saab Aero X. And at this Mediterranean resort, sumptuously sandwiched between Nice and Monaco, Lutz presided over the launching of the Cadillac BLS, a small, European-market, entry-level luxury car designed to take on the likes of the BMW 3 Series and Mercedes-Benz C-Class sedans.
The GM that Lutz and company presented here did not look at all like the troubled GM of North America, which got a bit more bad news recently when Consumer Reports magazine announced that it had chosen no 2006 domestic models among its top runners in the vehicle reliability category.
That report stung, casting a pall over GM's European celebration. But it wasn't what was really bothering Lutz, one of the global auto industry's most blunt top executives.
''I can't believe that we were so stupid,'' Lutz said of GM. ``People talk about Toyota overtaking General Motors [in global sales], as if GM were one company. But the truth is that we had not been one company for decades. We were different companies, each doing its own thing with little regard for the other. How can you run a global company like that? You can't. It was stupid. No wonder Toyota was cleaning our clock.''
The separate-but-equal approach to financing, developing, designing and manufacturing divisional cars and trucks yielded equally mediocre vehicles, higher production costs, lower vehicle quality and legions of dissatisfied customers, Lutz said. But GM waited much too long to fix what needed fixing, he said.
''The problem was right there before us all along. It was so easy to see, once we decided to look. It's not rocket science,'' said Lutz.
But GM was ''too comfortable,'' he said. ``We were too much in the habit of looking at how individual divisions performed, as opposed to looking at how all of GM was performing.''
That corporate blindness caused GM to cheat itself, Lutz said. ``We were not leveraging our strength as a global company.''
None of this really amounts to a revelation. Other GM executives and legions of automotive industry analysts have made the same, or similar, complaints about the company for years. What is new, as evidenced by the Cadillac BLS -- which won't be sold in the United States -- and other new GM products, is that the company is taking steps to correct its errors.
Cadillac, for example, now is treated as GM's global luxury brand. Chevrolet, at the other end, is the company's global entry-level vehicle.
That does not mean GM soon will be jettisoning another division in the manner of the defunct Oldsmobile. But it does mean an end to separate-but-redundant product-development, design and marketing operations and to all the costs and inefficiencies attached to those redundancies, Lutz said.
''We now have one, single global design and engineering budget. We've put an end to badge engineering,'' said Lutz, referring to GM's discredited practice of making cosmetic changes to, say, a Cadillac and calling it a Pontiac.
How did badge engineering hurt?
Take a look at the highly acclaimed Opel Signum sold here in Europe and the Chevrolet Malibu Maxx on sale in the United States. Both are solid family cars based on the same mid-size GM platform. But the Signum has substantially better styling and considerably more panache than its American cousin largely because GM cut some corners on materials and design to save money and get the Malibu Maxx to market.
It turned out to be a self-defeating strategy. The Signum sells well in Europe because buyers want it. The Malibu Maxx sells in the United States essentially because GM bribes customers with rebates and other costly incentives to buy it.
''Let's face it,'' Lutz said in an interview after GM's Geneva presentations. ``. . . The Signum and the Malibu Maxx should have been the same car.''
Even Toyota Motor Corp., which has much less product proliferation than GM, has learned a similar lesson. For example, what had been sold as the Toyota Echo subcompact in America was marketed as the Toyota Yaris in Europe and Asia.
Although both the Yaris and the Echo shared the same underpinnings, the Yaris had more appeal and was an instant hit among European and Asian buyers when it was introduced in 1999.
The rather dowdy Echo, which came to the United States a year later, was a commercial flop.
Toyota has reworked the Yaris/Echo for 2007. But the company will sell it in Europe and in North America as the same car using the same model name, thus eliminating the need for two separate budgets to sell the same car.
''That is the way we are going to do things from now on,'' Lutz said. ``It just makes more sense. Why we did not do that before? What can I say? We were stupid. We're much smarter, now.''
The automotive media applauded the Geneva International Motor Show introduction of one of GM's divisional concept cars, the sleek, all-methanol-powered Saab Aero X. And at this Mediterranean resort, sumptuously sandwiched between Nice and Monaco, Lutz presided over the launching of the Cadillac BLS, a small, European-market, entry-level luxury car designed to take on the likes of the BMW 3 Series and Mercedes-Benz C-Class sedans.
The GM that Lutz and company presented here did not look at all like the troubled GM of North America, which got a bit more bad news recently when Consumer Reports magazine announced that it had chosen no 2006 domestic models among its top runners in the vehicle reliability category.
That report stung, casting a pall over GM's European celebration. But it wasn't what was really bothering Lutz, one of the global auto industry's most blunt top executives.
''I can't believe that we were so stupid,'' Lutz said of GM. ``People talk about Toyota overtaking General Motors [in global sales], as if GM were one company. But the truth is that we had not been one company for decades. We were different companies, each doing its own thing with little regard for the other. How can you run a global company like that? You can't. It was stupid. No wonder Toyota was cleaning our clock.''
The separate-but-equal approach to financing, developing, designing and manufacturing divisional cars and trucks yielded equally mediocre vehicles, higher production costs, lower vehicle quality and legions of dissatisfied customers, Lutz said. But GM waited much too long to fix what needed fixing, he said.
''The problem was right there before us all along. It was so easy to see, once we decided to look. It's not rocket science,'' said Lutz.
But GM was ''too comfortable,'' he said. ``We were too much in the habit of looking at how individual divisions performed, as opposed to looking at how all of GM was performing.''
That corporate blindness caused GM to cheat itself, Lutz said. ``We were not leveraging our strength as a global company.''
None of this really amounts to a revelation. Other GM executives and legions of automotive industry analysts have made the same, or similar, complaints about the company for years. What is new, as evidenced by the Cadillac BLS -- which won't be sold in the United States -- and other new GM products, is that the company is taking steps to correct its errors.
Cadillac, for example, now is treated as GM's global luxury brand. Chevrolet, at the other end, is the company's global entry-level vehicle.
That does not mean GM soon will be jettisoning another division in the manner of the defunct Oldsmobile. But it does mean an end to separate-but-redundant product-development, design and marketing operations and to all the costs and inefficiencies attached to those redundancies, Lutz said.
''We now have one, single global design and engineering budget. We've put an end to badge engineering,'' said Lutz, referring to GM's discredited practice of making cosmetic changes to, say, a Cadillac and calling it a Pontiac.
How did badge engineering hurt?
Take a look at the highly acclaimed Opel Signum sold here in Europe and the Chevrolet Malibu Maxx on sale in the United States. Both are solid family cars based on the same mid-size GM platform. But the Signum has substantially better styling and considerably more panache than its American cousin largely because GM cut some corners on materials and design to save money and get the Malibu Maxx to market.
It turned out to be a self-defeating strategy. The Signum sells well in Europe because buyers want it. The Malibu Maxx sells in the United States essentially because GM bribes customers with rebates and other costly incentives to buy it.
''Let's face it,'' Lutz said in an interview after GM's Geneva presentations. ``. . . The Signum and the Malibu Maxx should have been the same car.''
Even Toyota Motor Corp., which has much less product proliferation than GM, has learned a similar lesson. For example, what had been sold as the Toyota Echo subcompact in America was marketed as the Toyota Yaris in Europe and Asia.
Although both the Yaris and the Echo shared the same underpinnings, the Yaris had more appeal and was an instant hit among European and Asian buyers when it was introduced in 1999.
The rather dowdy Echo, which came to the United States a year later, was a commercial flop.
Toyota has reworked the Yaris/Echo for 2007. But the company will sell it in Europe and in North America as the same car using the same model name, thus eliminating the need for two separate budgets to sell the same car.
''That is the way we are going to do things from now on,'' Lutz said. ``It just makes more sense. Why we did not do that before? What can I say? We were stupid. We're much smarter, now.''
#2
few remarks:
- Launching an Cadillac BLS is such a stupid thing. Its vehicle that nobody will buy in Europe, so I really dont see what kind of sales are they envisioning.
- Opel Signum is certainly not an sucess. Same goes for new Fiat Croma based on the same car. Definetly one of the worst product decisions.
Does anyone even listen to Lutz anymore? I dont think there was ever such overhyped industry person that delivered so little.
- Launching an Cadillac BLS is such a stupid thing. Its vehicle that nobody will buy in Europe, so I really dont see what kind of sales are they envisioning.
- Opel Signum is certainly not an sucess. Same goes for new Fiat Croma based on the same car. Definetly one of the worst product decisions.
Does anyone even listen to Lutz anymore? I dont think there was ever such overhyped industry person that delivered so little.
#3
Guest
Posts: n/a
Originally Posted by spwolf
few remarks:
- Launching an Cadillac BLS is such a stupid thing. Its vehicle that nobody will buy in Europe, so I really dont see what kind of sales are they envisioning.
- Opel Signum is certainly not an sucess. Same goes for new Fiat Croma based on the same car. Definetly one of the worst product decisions.
Does anyone even listen to Lutz anymore? I dont think there was ever such overhyped industry person that delivered so little.
- Launching an Cadillac BLS is such a stupid thing. Its vehicle that nobody will buy in Europe, so I really dont see what kind of sales are they envisioning.
- Opel Signum is certainly not an sucess. Same goes for new Fiat Croma based on the same car. Definetly one of the worst product decisions.
Does anyone even listen to Lutz anymore? I dont think there was ever such overhyped industry person that delivered so little.
#4
Lexus Fanatic
Join Date: Jul 2001
Location: California
Posts: 6,084
Likes: 0
Received 0 Likes
on
0 Posts
Hard to figure out whether Lutz is part of the solution or part of the problem. He sure wants to sound like he had identified all the problems that the old GM had and says they don't make them anymore because they are much smarter now. Maybe he believes it. His problem is making the rest of us believe it.
#5
Wouldn't all this "improving" of the GM line-up cost a lot of money? Shareholders are going to be really mad! Why don't they just join Toyota and everyone can drive a Toyota/Lexus?
#6
Lexus Champion
I think somebody needs to tell Bob Lutz why GM is losing to Toyota. I'll be the one to break the news to him.
"Bob, Americans are turning away from GM because the quality for your products is going down the toilet. Stop cutting corners to save a buck. If you start building quality cars, Amercians will not have to turn to the Japanese and Europeans. Sure it will cost more, but obviously it's working for Toyota. They sell cars without hugh rebates. Thank you."
"Bob, Americans are turning away from GM because the quality for your products is going down the toilet. Stop cutting corners to save a buck. If you start building quality cars, Amercians will not have to turn to the Japanese and Europeans. Sure it will cost more, but obviously it's working for Toyota. They sell cars without hugh rebates. Thank you."
#7
Super Moderator
Kind of reminds me of Reebok shoes when I was a kid. They would always come out with an innovative design or two, but no matter what shoe I bought from them, they would always fall apart. Got tired of the bells and whistles, and bought what fit and lasted.
Everytime I see something come out of one of the domestics, I get the sense they want immediate impact now...that miraculous comeback (rebates and discount programs fall in the category, too) I am sorry, that just does not work. The Japanese study and improve every year, yet are patient (as they were when they entered the U.S. market) and kept faith they would win out...they have.
I am also tired of walking into your showrooms (goes for all you domestics) and hearing but we got this or that award from this magazine. I want to see the red dot with the little circle in it from Consumer Reports 5-7 years after I buy it, not a trophy hanging on your wall.
Everytime I see something come out of one of the domestics, I get the sense they want immediate impact now...that miraculous comeback (rebates and discount programs fall in the category, too) I am sorry, that just does not work. The Japanese study and improve every year, yet are patient (as they were when they entered the U.S. market) and kept faith they would win out...they have.
I am also tired of walking into your showrooms (goes for all you domestics) and hearing but we got this or that award from this magazine. I want to see the red dot with the little circle in it from Consumer Reports 5-7 years after I buy it, not a trophy hanging on your wall.
Trending Topics
#10
Guest
Posts: n/a
Lutz couldnt fix it all. GM is just full of idiots with no clue. Lutz tried but they now demoted him and Wagnor is the boss and their best idea is to put GM badges on all their cars.
Even as GM has gotten much MUCH better, so has THE COMPEITITON. And IMO, outside the ZO6, no GM product > Toyota.
Even as GM has gotten much MUCH better, so has THE COMPEITITON. And IMO, outside the ZO6, no GM product > Toyota.
#12
Originally Posted by 1SICKLEX
Lutz couldnt fix it all. GM is just full of idiots with no clue. Lutz tried but they now demoted him and Wagnor is the boss and their best idea is to put GM badges on all their cars.
Even as GM has gotten much MUCH better, so has THE COMPEITITON. And IMO, outside the ZO6, no GM product > Toyota.
Even as GM has gotten much MUCH better, so has THE COMPEITITON. And IMO, outside the ZO6, no GM product > Toyota.
#13
Lexus Test Driver
In the past I always wanted to point the finger at the quality issue with the big 3.
Lately, just looking around. A HUGE part of it is that you need to have cars that people want to buy. People will buy a car that junk, as long as it is "hot" to them.
For me, nothing from GM does it for me. I use to LOVE the old STS in the middle 90's, then I look at it today and say is this really the same car?
DC is doing "ok" because they stepped up the car\truck designs, ford and gm have put wasted effort into the last round of new cars to hit the market.
Lately, just looking around. A HUGE part of it is that you need to have cars that people want to buy. People will buy a car that junk, as long as it is "hot" to them.
For me, nothing from GM does it for me. I use to LOVE the old STS in the middle 90's, then I look at it today and say is this really the same car?
DC is doing "ok" because they stepped up the car\truck designs, ford and gm have put wasted effort into the last round of new cars to hit the market.
#15
Originally Posted by sc430blue
Pontiac GTO...what the heck was up with that? Take the GTO image and make it look like a grand am. Missed the boat and now playing catch up to the Mustang.