Making "Lutz Cars" Sexy Again


By David Welch Has Robert Lutz lost his touch for turning out hit cars? It's a question plenty of people are asking -- and one that makes the General Motors (GM) vice-chairman bristle.

It's unfair to say that Lutz -- who at 72 has a long and distinguished career as one of Detroit's eminent car guys -- hasn't made some vast improvements in taste and craftsmanship since joining GM in September, 2001. But it seems fair to question why the styling hasn't been more expressive. He misread the market when he ordered up the speedy but bland Pontiac GTO, which has flopped.

A SATURN ROADSTER, ANYONE? GM's newest cars, like the Buick LaCrosse and Pontiac G6 sedans, are rather plain. It's still early in their launch, but consumer reaction has been lukewarm, and neither car looks like the kind of breakthrough Chrysler had with the 300 and Dodge Magnum wagon. Even the retro-styled Chevrolet HHR compact wagon, which is reminiscent of a 1949 Suburban, has been criticized as being too close to Chrysler's PT Cruiser. Some have dubbed it the "Me Too" Cruiser.

While strolling around the new cars at the Detroit auto show, which started this week, the ever-swaggering Lutz defended his three-year tenure as GM's car czar and said the best "Lutz cars" are yet to come. "We have fixed the main problem at GM and got ourselves back to doing highly competent design work," he says. "At least 25% of our portfolio I feel very good about. I feel extremely good about all of our new stuff."

Give Bob his due. The two Saturn cars GM displayed at the Detroit auto show -- the Sky roadster and Aura sedan -- are quite good-looking and have posh interiors befitting a brand that peddles more expensive vehicles. The jury is out as to whether anyone wants a Saturn roadster. But the division's new look could go a long way toward patching up its low-rent image.

LIMITED SALES. If the cars are hits when they come out early in 2006, they could possess the pizzazz the motor press has been waiting for Lutz's GM to deliver. Says the exec: "I thought these questions would stop when everyone saw the Saturns."

It's clear Lutz wants a big hit more than anything. Bring up the new cars designed by his former employer, Chrysler Group, and he hardly hands out glowing praise. In what sounds like a bit of jealousy, he called the hot-selling 300 a "lucky hit." Chrysler showed off the Dodge Charger sports sedan, which is a V-8 powered curvy cousin to the 300. Lutz said it's poorly designed.

"I don't like it," he sniffs. But adds: "That doesn't mean it won't be successful." He also gives a thumbs down to an ostentatious sports-car concept from Chrysler called the Firepower.

Lutz has brought some punchy design to GM's autos. Both the Sky roadster and Pontiac Solstice two-seater are sexy cars that have been shown to the motor press with critical acclaim. The problem is that GM plans to sell only 10,000 or 15,000 of each. Even if the two cars really catch on, neither will deliver the kind of bottom-line results and market-share gains that Chrysler has grabbed with its new cars.

HIT NEEDED. Beyond design, Lutz has spent a lot of his time fixing some fundamental problems at GM. Walking through the company's stand at the auto show, he stops at the new Chevrolet Impala -- a much-refined but stylistically dull entry -- and points to the thin gaps between the hood and fenders. Before Lutz ordered up some better metal work, GM cars had unsightly 6- to 7-millimeter gaps between the fenders and hood and other body panels, he says. Consumers would take one look and think the cars were poorly built. Now GM has it down to 2 or 3 millimeters -- like the imports. He also has GM using nicer materials inside the cars.

Lutz also spent a lot of time in Europe this year fixing GM's product-development operations. They weren't lean enough or fast enough in getting new cars to market. Worse, GM's German Opel division and Swedish Saab unit operated too independently. The Saab 9-3 and Opel Vectra midsize sedan are built on the same platform -- but cannot be made in the same plant. So GM has two plants running inefficiently. Lutz has the two concerns working more closely together now, says GM-Europe President Carl-Peter Forster. That kind of blocking and tackling is vital to GM's success.

The exec has proven with the Sky and Solstice that he can get flashy cars to market quickly. But with profits looking weaker and market share sinking to 27.2% last year, from 28% in 2003, Lutz needs to deliver the kind of big-volume seller that can lift the auto maker's flagging fortunes. If he brings home the kind of hit that helps GM's bottom line, no one will be questioning Lutz's long-heralded instincts for making cool cars. Welch is a correspondent in BusinessWeek's Detroit bureau


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