Why GM Named 77-Year Old Lutz CMO

Posted by: David Kiley on July 15, 2009

lutz.jpg

Bob Lutz, at 77, is not the obvious choice to be General Motors’ new chief of marketing. While he has a blog, I’m pretty sure he dictates it to others to type in. He has no Facebook page, and I am not aware that he tweets.

Despite a few overly honest declarations about global warming that reflect his conservative leanings, GM CEO Fred “Fritz” Henderson asked Lutz to again delay his retirement, and take on a bit more responsibility, because of his judgment.

Bob may have a voice that sounds like he gargles with battery acid and cigar ashes, but he has an a nearly impeccable sense of what looks right. That’s why former GM CEO G. Richard Wagoner Jr. tapped him in 2001 to become GM’s product chief. Lutz took, for example, a dud of a mid-size sedan, the Chevy Malibu, remade it, and turned it into the 2008 North American Car of the Year. That came a year after its sister car built on the same engineering platform, the Saturn Aura, took the honor in 2007.

Interior designs of GM cars under Lutz now rival those of Volkswagen and Audi.

Lutz was set to hang around as an advisor the rest of this year at GM and then figure out how to amuse himself again in semi-retirement. But one thing has eaten at Lutz the last three or four years. While he has put world-class cars and trucks on the road, too few people have noticed. The word’s not out. Drives him bats.

I have talked to Lutz about advertising on several occasions. He is not so big on decisions made about advertising and marketing based on “tests.” Every crappy ad campaign, after all, “tested great” before it crashed and burned on their air, he says. And he is right.

Bob gets this. So, what I expect is that he will read the “test” results. But he is now in a position to say, “No…this is stupid. I’m not paying for this.”

I recall a few years back when Buick launched this impossibly bad idea for an ad campaign featuring an actor, John Diehl, playing legendary GM designer Harley Earl. Okay, Earl is legendary in Detroit and in auto design circles, but not so much in the bowling alley in Gary, Indiana or the Starbucks in Westfield, N.J. And that’s why it was stupid. GM turned to a dead guy to sell Buick, which, at the time, had an average age buyer of “terminal.”

I asked Lutz what he was thinking. He explained that he and Wagoner thought it was a really dumb idea, too, but that the then-head of Buick brand believed in it. The system at GM has rotated finance, service and even engineering people into marketing roles at the company. They, in turn, become captive to the big ad agencies in town, which look after them like ten- year olds at a high school dance.

So, the idea of deferring huge marketing decisions to people not trained or experienced in marketing has led GM down this path of ruin where its brands stand for very little. The ad strategies, changed as often as oil filters, have created chaos and instability around GM’s brands.

GM has long been very big on protecting and preserving “the way it does things.” The GM Way. Part of that arrogance, that led it into Chapter 11, was letting brand chiefs hang themselves or thrive on their own decisions. The only time the higher-ups, like the CEO, seemed to get overly involved was when an ad ran afoul of some so-called self-appointed moral authority.

The appointment of Lutz to lead marketing is a sign that that era is over.

Lutz has a way of filling up any room he is in. His power at GM has been that no one else in any room he was in had better judgment on how a car should look or feel when you drive it. And everyone else in the company knew it.

Lutz is not trained in marketing. But he has gravitas and a way of pushing stupidity down the hole from whence it came. He is not perfect. Let’s not forget the Pontiac GTO he brought in from Australia. And the jury is out on the styling of the new Buick LaCrosse. And he tried to convince me that making GM’s loser minivans look more like SUVs was going to put them on the map against Chrysler and Honda.

Lutz, a former Marine, strides like a General around GM. A good General. More Omar Bradley than George Patton. The product line, thanks to him, is well-fixed and on track. Quality, design and craftsmanship of vehicles is top-drawer. What comes next is redefining the message and the system through which the new GM creates the message.

He has been given the authority to red-light and deep-six really bad ideas regardless of whose feelings get hurt. He is 77 and with no ambition or prospect to be CEO. That makes him valuable, and dangerous to GM’s long-time ad agencies, at least two of which probably need to be replaced despite many decades of service to GM.

My guess is that CEO Henderson realizes he needs a junk-yard dog, albeit one with demonstrated great judgment, with nothing to lose to go in and shake up every corner of the way GM speaks to the public.

And Bob’s the guy.

Reader Comments

TS

July 15, 2009 8:19 PM

Oh Yeah, his latest 'gem' is Chevy Camaro (a retro muscle car that no one below 40 or earning about $40k would want to buy).

Toyota and Honda could never be accused of making nice-looking cars (every Camry has unfailingly looked 'dull as dishwater'). Their secret has been reliable engineering and sensible mileage, making them consistent winners.

After decades of getting licked by the Japanese, GM has STILL not learnt its lesson.

ross marino

July 15, 2009 9:09 PM

what it is the new symbol for the new
general motor!!!!!!

ross marino

July 15, 2009 9:09 PM

what it is the new symbol for the new
general motor!!!!!!

FamilySedanBuyer

July 15, 2009 10:16 PM

Interesting. However, not sure what is GM's mission going to be. Is it going to be the exciting car producer or the mandane family car producer? Other makers do not seem to be getting by on "good looks", but just "right looks & relaible".

Peter

July 15, 2009 10:52 PM

Hey David Kiley, If your comment about importing the GTO from Australia is really about the G8, you're completely wrong here. The G8 is the coolest car in the GM stable, even better than the Vette. A victim of poor timing, I would bet sales would have sizzled if brought out sooner. The Pontiac G8 is a well designed machine and I wish I needed a new car because I would buy one lickity split.

From Kiley: No...i was speaking spoecifically about the GTO, which was a flop. The G8 has only just been discovered now jthat we have been writing about the demise of Pontiac.

Image Consultant

July 16, 2009 3:08 AM

Is that right? He is 77 years of age? Well, it wasn’t obvious, look at him.


About Face Image Consulting Inc.

PC

July 16, 2009 6:17 AM

I am so tired of the love-affair with Bob Lutz. The guy has been an exec at GM for ever and in charge of car design for some time, yet you can count the number of good cars he has brought to market on one hand!!!! Even a blind dog finds a bone one in a while!

And the comment that GM's interiors rival Audi's? Are you serious? According to who? The millions of people not buying GM?

gaurav

July 16, 2009 6:45 AM

he is surely a great guy and i hope dos take a good look at the marketing spend of GM !!!!! way to go !! all the best Bob !!!!!

Pookie

July 16, 2009 6:52 AM

Sorry, but Lutz is one of the reasons that GM has yet to produce a true hybrid car.

SW

July 16, 2009 8:39 AM

But he'd better start training the 'next' generation of Bob Lutz's! There have been many pretenders to his product instincts, but no successors!

Miles Rose

July 16, 2009 11:43 AM

I believe history will prove that in this time there is a certain optimal business size. Bigger will not be better. An elevated "ivory tower" doesn't work in todays age where business is being forced to listen. The most important thing about Lutz is that he has to power to effect change and not to have it picked apart by the bean counters and others. Win or lose what GM needs now is the ability to timely come to market with one vision, not the velvetatized results of the past.

Chris from the Boro

July 16, 2009 12:44 PM

Come on! Is a 77 year old the best choice for a company that is trying to save itself? As far as the Malibu, I just bought a new LTZ as a present for my wife. Overall she likes the car but says it doesn't have a very sporty appearance, and she thinks the leather seats are too stiff - a decent car but not a knock out. Some real misses Lutz has been involved with...the Buick Lacross (zzzzzzz), the Pontiac G6 (ho-hum), the Pontiac G8 (which is discontinued but Bob is trying to resurrect as a Chevy!). Concepts are nice enough, but you have to think of the real world. Most forward thinking people know the price of gasoline is going up. Is there really a big market for big engine, rear drive cars? They may make nice "garage queens" but few who live in a snow area would buy one for day-to-day transportation due to traction advantages on front wheel or all wheel drive. You have to wonder what GM is thinking...stupid decisions continue to be made...like keeping Lutz, keeping GMC, etc.

Brad

July 16, 2009 4:38 PM

Agree with TS at the top. He can produce a hit, but can he spot what's missing. Is GM going to continue to design and build cars for the market it thinks it understands (the one that led it to bankruptcy) or is GM going to break out of its mold and come up with a strong stable of vehicles that appeals to a variety of people? He was at Chrysler before GM and was great at niche vehicles that created short-term buzz, but never developed enough main stream products that could sustain the business.

Ken

July 16, 2009 5:10 PM

GM has some interesting cars - until you get to the price part. How many new cars is GM coming out with over the next year that will be in the $12,000 to $18,000 price range? I would guess that none is the answer.

Let's get back to reality. When I was buying cars in the 60's and 70's you would get a 24 to 36 month loan. Today you're talking about 60 to 72 months.

Until GM starts passing on some of their cost savings to the consumer the Korean automakers are going to do very well.

Brett

July 16, 2009 6:42 PM

People often say, the devil is in details. If you sit in Malibu and Accord, you will find these subtle differences: at a glance, nothing wrong with interior of Malibu; Looking more carefully, it just feels less right than Accord.

Lutz is a guy for "wowing me/fashionable" type of cars/trucks. He doesn't get it in terms of details, which last longer and which is why Accord sells for more as used cars.

American cars need reliability in engineering, and details in interior and exterior designs.

motor trade recruitment

July 17, 2009 2:14 AM

we know he is above 77 but it's good looking and nice person.

Ballbuster

July 17, 2009 4:59 AM

At 77 years old, Lutz is nearly as old as GM's existence. Even without Madison Avenue's make-over, Lutz's silver hair, facial wrinkles, and stature convey the image of an experienced and sophisticated CEO. He is picture perfect for mass consumption. At GM, as exemplified by Fritz's hiring Lutz, the Old-Boy Network has always placed image over substance, sheet metal above engine technology, and marketing hype over fit-and-finish. Despite it all, Kiley is gushing over Lutz's reappointment. As one of the top executive of pre-bankrupt GM, Lutz wasted about $500 million precious dollars from conception-to-production of his "baby", the two-seater, Sky and Soltice, both turned out to suffer from congenital defects that left them orphaned in dealership showroom. Kiley, of course, conveniently over looks this fiasco or the time when pilot Lutz brilliantly belly landed his jet because he forgot to lower the landing gear. With Lutz back on board, Fritz may, just as well, reappoint Wellburn to be Chief of Design so that both Lutz and Wellburn can continue their spate and pissing contest at the Cadillac design studio. And surely there must be an executive position somewhere for Rick Wagoner's reappointment. With one happy family reunited, the New GM business mission statement is: If the Titanic didn't sink the first time, let's rehire the same crew and charter the same course. As for naïve Kiley, he will be the repeat customer with a reserved berth below deck at star board.

JJ in Cal.

July 17, 2009 11:11 AM

David, good points. Very interesting. Most of the above commenters are way too harsh.

However, if you think GM interiors are the equal of Audi's, then you have never sat in a Pontiac Solstice.

Lutz's problem is that he likes car reporters to tell him he's great. So he produces cars for car guys. That Saturn you mentioned: Car of the Year, but a sales flop.

John

July 18, 2009 7:02 PM

How can be expected from a 77 old who was in the executive position at GM for many years before GM went into bankruptcy to change anything?

lei-ing-lo

July 21, 2009 2:02 PM

Until GM addresses the product liability issues (dexcool, lower intake gasket failures etc.) that lost them millions of customers in the first place, it won't matter who's sitting on top...or what cars they make...'cause they won't be able to get those customers back. And who really wants to subject themselves to the nasty trickeries of their dealers...not honoring warranties, inflating prices etc. If they don't start addressing these issues, GM might as well just say 'bu-bye'...'cause they are not the only automakers out there and these people will NOT even think about giving them a second chance.

seapixy

July 22, 2009 4:40 PM

I believe the reason why Ford didn't end up like GM is that it started hiring anthropologists back in the 1990s to help understand it's consumers needs.

I've met a few Ford anthropologists and its interesting - they apply tools from anthropology such as ethnography, customer profiling, and participant-observer to uncover the real issues consumers have with products. I think this has definitely helped improve the quality and design of Ford's products.

Many other hi-tech industries also use anthros for consumer intelligence - HP, Motorola, Microsoft, to name a few...

By keeping Lutz GM is telling me it hasn't learned its lesson and is doomed to fail in the end. To rely on Lutz to interpret the market and consumer needs is foolish, especially now that cars are much more complex, the competition is so much more competent, and there are so many more tools available to obtain consumer voices.

Sounds like GM has more lesson learning ahead...

Paul (Vw)

July 23, 2009 6:52 AM

>>>> And he tried to convince me that making GM’s loser minivans look more like SUVs was going to put them on the map against Chrysler and Honda.

The nerve! Just you?

from a smoke filled room

August 1, 2009 11:07 AM

wow david, what are you smoking dude?

here's some advice: put down the bong for a day and review your own arguments with a clear head.

"GM has long been very big on protecting and preserving “the way it does things.” The GM Way.... ...The appointment of Lutz to lead marketing is a sign that that era is over."

haha ha ha ha ha ha ha ha. funny, ha ha.

"Bob gets this.... But he is now in a position to say, “No…this is stupid. I’m not paying for this.” funnier still. i guess.

like he wasn't before?

dude, first off, eight years is a lifetime for an executive. let's not forget that he was driving the GM bus for wagoner when it crashed into a wall - of bankruptcy. (if only the media would write about how good he make things look?? ha ha ha ha ha ha ha you couldn't make this stuff up!) that's right bankruptcy! not something that happens every day, to an economic engine like GM.

let's try some perspective ok? that's like trying to imagine 1) microsoft going bankrupt.2) kiley writes a hagiography; of how steve ballmer is going fix things up right this time! (cuz lord knows he just needed a chance. no body gave poor bob a chance. he is sooo misunderstood. )

bob sure fills a room all right. and there is no need to touch his impeccable taste. (though many of the commenter are able to point out the many turds that blossomed on his watch.

but that said, the car guys love him. and now he owns the message making machine. surely america will learn the unbelievable truth soon enough.

tune in next quarter when we hear bob say: "No…this is stupid. I’m not paying for this." if only the shareholders would say the same. Thankfully the lifetime of a CMO is 18 months.

Everett Mahn

September 14, 2009 10:12 AM

Hope GM makes it. On about Car # 40 since started driving in 1959 and large majority have been GM's. Always took good care of my chariots and only serious 'mutant' I had any major probs with was the Vega. Was a 1950's Teen and a Car Nut from the Getgo. Right now have 4 cars on the road -- all GM marques, and the '98 Park Avenue is really a dream cruiser. Weighs two tons and gets 27-29 highway. The '04 Pontiac GT-1 is quick, has real sports handling, and is also very fuel efficient. (Gonna miss the marque when it becomes extinct.) Keeping the '03 Monte Carlo SS as an investment, as hardly drive it. The '00 Bravada is my Winter 'Tank', and the Smartrac works like a charm here in the frozen north of Upstate New York.

After the corporate reshaping, including suggested ad campaigns on the theme of "Come Home America -- We've Been There For You For Five Generations!" I strongly recommend you all take a good luck at GM's new creations.

Mike

September 20, 2009 12:13 PM

What's wrong with Dexcool? If you took care of your car properly there were no issues. I have 2 Cadillacs with DexCool in them and have had no issues - mileage is over 135,000 combined and their ages total 14 years.
GM needs to make more convertibles and I do not mean corvettes and Cadillac XLRs - these are priced in the stratosphere.

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