Latest GM Shakeout Possible Precursor to Lutz DepartureBy Michelle Krebs December 8, 2009
Since 2001, Bob Lutz has been the North Star for everyone who cares about the product at General Motors Co.
But the GM executive firmament is rapidly evolving thanks to a Big Bang orchestrated by chairman and temp-CEO Ed Whitacre, one that likely will lead to Lutz's departure sooner than later, some GM insiders believe.
The de-emphasis of vice chairman Lutz's role (although not title) to "advisor" on global product development and design could be the result of persistent rumors there's not enough room in a room for both Lutz's and Whitacre's egos.
Or it could be just what it appears: at 77, Lutz is a highly visible contradiction to everything Whitacre -- and the government-dominated GM board of directors -- professes needs to change with GM's moribund "lifer" executive culture: that GM management is dominated by executives who are too old or have been at GM too long. Or both.
Lutz a Lightning Rod
One highly placed engineering source at GM said he believes after the new realignment that brings bright prospect (and at 46, appropriately younger) Mark Reuss the title of president of GM North America, Lutz is likely to retire, possibly as soon as the first quarter of next year.
Fueling the theory is the fact that Lutz had been scheduled to be the keynote speaker at Monday's announcement of GM's $336-million investment in the Detroit-Hamtramck plant that will assemble the Chevrolet Volt. GM's vice president of global product planning Jon Lauckner stood in instead. GM spokesman said Lutz had a previously scheduled meeting with Whitacre.
Although Lutz undeniably has helped turn around perceptions about GM's ability and commitment to design and develop world-class products, he has been a lightning rod, often generating intense opinions both inside and outside the company.
In February and prior to GM's bankruptcy earlier this summer, Lutz announced his intention to retire from GM. But after GM emerged from bankruptcy on July 10, it was announced Lutz would stay as vice chairman and lead marketing and communications. AutoObserver sources say President Obama's automotive task force, after a visit to GM's product development facilities, insisted Lutz stay on.
The move to put Lutz in charge of various aspects on the "soft" side of the business -- a post-bankruptcy decision by now-departed CEO Fritz Henderson that possibly helped build the case for his ouster -- was said to rankle many at GM and appeared to outsiders as a strange use of Lutz's talents.
Lutz's outspokenness -- although often an asset at tragically insular GM -- sometimes created uncomfortable public-perception issues. Lutz usually is a vociferous corporate cheerleader, to the point of relentlessly chiding the media for what he calls an inbred bias toward import automotive brands.
But perhaps "Maximum Bob's" most notable bad-press moment came when he said in early 2008 that the possibility of global-warming was "a total crock of shit." Those familiar with Lutz's style didn't overreact, but for a GM working feverishly to change its reputation as an environmental laggard, then-CEO Rick Wagoner and other GM execs had to offer bleating skin-backs. The quote has dogged Lutz ever since.
GM Moving On
Now it appears Whitacre and the GM board are making the moves to take GM -- and the perception of GM -- beyond the Lutz era. Lutz served an important role for GM in the early part of the decade, but right or wrong, he, too, symbolizes GM "old think."
With the elevation of Reuss, Susan Docherty to head all of sales, marketing and service and the increasing youth-movement advocacy of GM's board, not to mention Lutz's new role that seemingly removes him from day-to-day management authority, new speculation of Lutz's potential retirement probably is well-founded.
Other executives at GM are in the same boat.
The coming months will be important for GM in two ways: first, if sales and market share do not improve (two metrics emphasized by Whitacre), the board will be emboldened to yet more management restructuring.
And if GM's fortunes do at least stabilize, the board's most important job will be understanding its drive to change GM's culture should be balanced with the need to retain executives with sufficient institutional and industry experience. -- Bill Visnic, Senior Contributing Editor
Photo by GM
GM Vice Chairman Bob Lutz