Bob Lutz gives a firsthand look at GM’s decline
“Look, people,” Bob Lutz quotes himself as once having told a group of executives at General Motors. “I tend to have a lot of ideas and strong views which are not necessarily correct.... I know I’m full of crap a lot of the time.”
Lutz, the fighter jet-flying, motorbike-riding 79-year-old former vice chairman of GM who was until 2010 in charge of the company’s once woeful product lineup, knew of what he spoke. Reading his new book, “Car Guys vs. Bean Counters: The Battle for the Soul of American Business,” often feels like being in a Detroit bar with “Maximum Bob,” listening to his flow of anecdotes over cocktails.
He insists that all journalists are trained to be anti-business, that U.S. drivers delude themselves that Japanese cars are better than those made in Detroit, and that global warming is a myth or, as he puts it: There is endless coverage of “polar bears on ice floes (hello — they can swim! And far from being ‘endangered’ the population is up sharply).” After a while, amusing though it all is, the reader is tempted to sneak out.
That would be a mistake, for mixed into Lutz’s flow of blarney and half-baked pontificating is one of the most acute books about management and how companies work in practice that I have read in a long time. If anyone wants to know exactly how the U.S. auto industry got into trouble, here is your guide, published by Portfolio.
As the title indicates (“I couldn’t help but be totally honest,” Lutz writes, and he carries this inability to a Tourette’s-like extreme), he sees GM’s problem as the result of the steady undermining of its once-proud design- and engineering-led culture by a generation of finance executives and MBAs.
That toppled GM from its global leadership of car manufacturing under Harley Earl, its former head of design, to making bland, shoddily constructed vehicles in the 1970s and 1980s. GM, Ford and Chrysler were then passed by Asian manufacturers, so the U.S. automakers diverted their efforts into gas-guzzling sports utility vehicles and finally (in GM and Chrysler’s case) went bankrupt.
“This shift to the predictable, so seductive to the bean counters, destroyed the company’s ability to compete and conquer,” Lutz writes.
It is hardly an original or even a controversial argument, but Lutz witnessed firsthand — having been brought out of retirement in 2001 after a career at Chrysler and BMW — the depths to which GM had sunk.
Only Lutz would note that an earlier cabal in which he was involved to seize control of GM was organized by a Detroit executive who “in the manic phase of the bipolar disorder that would ultimately claim his life through suicide, rubbed his hands with glee over what he called ‘the big one.’”
Only Lutz would describe the designs he saw when he first arrived at GM as “a horror show,” including one car that “looked like a demented giant rodent”; and warn those dealing with Ed Whitacre, the former GM chief executive, to “watch the steely eyes that never really smile.”
Lutz’s notion that GM sacrificed product development to short-term financial demands is plausible, and he has absorbing details of the mechanics of its decline.
The book’s Achilles’ heel is that, while he writes memorably of what occurred in front of his eyes, he is an unreliable narrator of the background. Other authors such as Roger Lowenstein have described more coherently how GM’s “bean counters” were pushed into shaving costs and degrading the product by the burden of pension and healthcare costs.
Still, Lutz’s chronicle of this extraordinary case of the comparative decline of U.S. manufacturing is compellingly told. He may be full of nonsense, but there is wisdom too.
John Gapper is associate editor and chief business commentator of the Financial Times of London, in which this review first appeared.
