Q&A: Bob Lutz, the auto industry’s 85-year-old bad boy, goes off on Elon Musk and President Trump
If you’re into cars, you’ve certainly heard of Bob Lutz, no matter what your age.
Lutz, now 85 and only semi-retired, is an auto industry legend. He’s one of a still-too-rare species of Detroit executive known as a “car guy,” an enthusiast who puts the product first and then figures out how “the bean counters” can afford to build it.
He has held top spots at BMW, Ford, Chrysler and General Motors. He was GM’s vice chairman during the financial crisis and pushed the company into electrified vehicles with the Chevy Volt. Along with Rick Wagoner, GM’s chief executive at the time, he boosted quality across the entire product line. Without those improvements, many analysts say, GM might not have survived.
He left GM in 2010. Today Lutz runs a foundation, serves on corporate boards, writes a column for Road & Track and is experimenting with a new online talk show, Bob Lutz to the Max, currently on Facebook and bound for YouTube.
Lutz never became an auto company CEO himself. Maybe that’s because the cigar-chomping ex-Marine is so blunt.
The Times spent time with Lutz in his Ann Arbor, Mich. kitchen, accompanied by his pack of dogs and pet pig Rosie. Here are excerpts, edited for clarity and brevity:
What’s your take on Elon Musk and Tesla?
I don’t know why it is that otherwise intelligent people can’t see what’s going on there. They lose money on every car, they have a constant cash drain, and yet everybody talks as if this is the most miraculous automobile company of all time.
What do you think will happen with Tesla down the line? Bought by a traditional auto company?
Maybe, but who needs it? [Musk] has no technology that’s not available to anybody else. It’s lithium-ion cobalt batteries. Every carmaker on the planet has electric vehicles in the works with a 200-300-mile range.
Raising capital is not going to help, because fundamentally the business equation on electric cars is wrong. They cost more to build than what the public is willing to pay. That’s the bottom line.
What about the design?
The one advantage [Musk] has is that the Model S is a gorgeous car. It’s one of the best-looking full-size sedans ever. The Model X? It looks like a loaf of bread. There’s no arguing the Model 3 is nice-looking but it doesn’t break any new ground aesthetically.
Don’t get me wrong, what Musk has achieved, whether it is profitable or not, is incredible. He’s created an automobile company based solely on electric vehicles, and they have pretty good, not yet completely reliable, autonomous capability.
Raising capital is not going to help, because fundamentally the business equation on electric cars is wrong.
For the guy who pushed the Volt, you seem pretty down on electric cars.
They are unarguably a ton of fun to drive. The Tesla Model S? The one with ‘ridiculous mode’? Zero to 60 in like 2.2 seconds? That’s got to be like a shot off an aircraft carrier.
But the mainstream still prefers gasoline. It’s more convenient. You don’t have the recharge time. It has unlimited range — you can refuel any time, any place.
The electric vehicle market is maybe 1%. It could go up to 4 or 5%. Surveys show maybe 4 or 5% of Americans feel so deeply about climate change and the environment that they’re willing to make a personal sacrifice to make their contribution. Most of them are called Prius owners.
So you think California’s mandate for 15% zero emission vehicles by 2025 is doomed?
Jerry Brown wants to make California an island of pure air, which is wonderful, except that you’d have to put a huge plastic balloon over California, because the Pacific is constantly bringing [dirty] air in as the purified California air heads east to the benefit of the rest of us.
You say you like electric cars. What would it take for buyers to embrace them?
I’m a longtime proponent of federal taxation on motor fuels, and the time to do it is now, when gas prices are low. You put 25 cents on and there’s a big hue and cry, but by the time the midterm elections roll around it’s forgotten. I’d dedicate the 25 cents a gallon to infrastructure.
Let’s face it, it’s juvenile. What is he, 71 or 72?
Bob Lutz on President Trump
Trump is quite right. Our infrastructure is in a parlous state. Where’s the money going to come from?
You call yourself an economic conservative. What do you think of Trump?
It would have been nice to have a conservative president who is more unifying and more careful about what he says.
You mean his tweets?
My concern with Trump’s constant tweets, he’s very often at odds with what his Cabinet members say.
If I had any influence over him, which I don’t, I would strongly encourage him to stop that, especially the angry tweets. Let’s face it, it’s juvenile. What is he, 71 or 72? You’d think he’d have developed a thicker skin.
I voted for him. The alternative was so awful. I think he’s going to be fine but we’ll see.
Fine in what way?
If he can get rid of most of the thicket of regulation — you always have to have some regulation because you can’t go back to laissez-faire economics — but if he works with the business alliances and the car industry and gets a list that says these are the 10 regulations that have to go, and if he actually gets rid of those, it will create tons of American jobs.
What else would you like to see from him?
If he manages to reduce the corporate income tax from 35% to 15 or 20%. Right now most American companies would rather pay the taxes in China. They’d rather pay them in Mexico. They’d rather pay them in Latin America. The global norm is 15%. Coupled with deregulation, that would have a tremendous impact on jobs.
President Trump promised a sweeping trade overhaul, but a draft letter provided to Congress suggests a modest revamp of the North American Free Trade Agreement. (Sign up for our free video newsletter here http://bit.ly/2n6VKPR)
What about Mexico? Trump wants to scrap NAFTA.
The problem isn’t Mexico. Mexico, automotively, is to a large extent a two-way street. We export a lot. And our Mexican plants take our components and ship them all over the world.
Mexico was part of the salvation of the American auto industry against the Japanese. If he wants to look at unfair trade, he should look at Europe. They essentially ship tax-free vehicles to the United States [without reciprocity].
You’re bullish on autonomous cars.
As much as one side of me deplores it because I love to drive, when you look at the skills of the average driver, and the reaction times, and the incidence of alcohol and drug use as a factor in accidents, and the amount of national productive time that’s wasted in traffic jams, it is time to find a different solution.
So what’s a driving enthusiast to do?
They will have to go to private racetracks. They’re springing up like golf courses. Those will be nice because they’ll be unfettered by regulations, since they’re not on public highways, and they will be the equivalent of riding stables and dude ranches now.
Your guide to our new economic reality.
Get our free business newsletter for insights and tips for getting by.
You may occasionally receive promotional content from the Los Angeles Times.