Bob Lutz

Bob Lutz belongs to a dying breed, which will be missed when it's gone. Garrulous, opinionated, politically incorrect and unstintingly frank, it's hard to see how he ever made it in corporate America, and harder yet to see how his like will ever make it again.

More is the pity is my assessment and, for that matter, his too.

Over a long career Lutz has held senior position at all the big US automobile manufacturers and at least one European one. The closest he came to outright CEO was an eight year spell as Vice Chairman at General Motors from 2000 until its filing for Bankruptcy Protection in 2008.

This book - Lutz' second - entertainingly recounts that period and GM's corporate history leading up to it; a history, in Lutz' telling, organised around the theory that GM was, from its heyday in the 1950s and 1960s, laid low by the cult of Total Quality Management.

I must declare something of an interest: I work in an industry, and for an organisation, suffering a similar blight. Lutz' passionate peroration rang resonantly with me.

Now, of course, everyone believes things aren't quite what they used to be. But even without knowing much about cars it's hard to argue that any vehicle in GM's 1998 fleet could bear favourable comparison with a '57 Chevvy, a '65 GTO or a '68 Camaro.

By 1998 the fall from grace was complete. Lutz identifies a number of factors at work. Some have the air of hobby horses (environmental skepticism) and bete noires (Toyota, and the "left wing" media's love affair with it); many go against the political grain and are expressed indelicately (if entertainingly) enough to prompt those who wish to, to write the book off altogether: pooh-poohing concerns about the melting ice cap, Lutz remarks "Hello! Polar Bears can swim!"

Many, however, are insightful and benefit greatly in their expression from Lutz' direct approach. Lutz writes simply, clearly, and with great humour.

Chief among his targets, as the book's title suggests, is the cult of the management consultancy which has swept the world since the summer of love. The relentless drive towards cost cutting, commoditisation, brand segmentation and regularisation - all things, Lutz concedes, which have their place in a well-run organisation - at the expense of product excellence, instead of in support of it (a component of product excellence is reliability and value for money, after all) is the operating cause of GM's long decline and fall.

Lutz' anecdotes are never less than hilarious as they illustrate how process and efficiency was allowed to drown out all other components, including not just design and style but product quality itself. A $25,000 investment cannot be branded and flogged the same way a toothpaste can, and as long as the predominant management ethos is that it can (for decades GM assumed their customers chiefly wanted a low-cost means of conveyance from points A to B, and that anything more was a nice-to-have), the management strategy is bound to fail. For in that scenario GM is competing with the second hand car market, a fight it simply cannot win. And nor did it.

Product excellence, Lutz argues compellingly, must be the overriding goal to which all other endeavours are aligned. Product line rationalisation is always justified if it permits greater focus of resources on better quality product. This is no more than a codification of the 80:20 rule. Somehow, with TQM, this truism of capital production was lost in the PowerPoint miasma.

Lutz is equally perspicacious on the subject of regulation, and he isn't quite the gas-guzzling scorched earther you might expect. the sine qua non of GM's trouble was Government political weakness in response to the 1970s fuel crisis. Instead of doing what every other developed nation had long since done, and imposing taxes at the pumps to constrain demand, congress took the politically convenient measure of constraining supply, by imposing draconian constraints on engine capacity and configuration. Having for a generation enjoyed pump prices a quarter of those anywhere else in the world, US manufacturers suddenly found themselves having to drastically retool, redesign and reconfigure their entire fleets, by regulatory fiat, whereas their European and Japanese competitors, long used to higher fuel prices in their domestic markets,were able to flood the US market with well developed, tested and compliant vehicles. Needless to say the new range of four cylinder American cars were beset with teething and performance problems, and as Lutz would have it, the US manufacturers have been on the back foot ever since. Lutz' view is that pump taxes would have given GM the breathing room to modify its fleet over a sensible period of time.

That complete revision of the product range unhappily coincided with a period where the Bean Counters were allowed the run of the ranch, and a catalogue of disasters, all briliiantly recounted by Lutz, ensues. I had to wipe away tears of laughter on the tube - never a good look - at Lutz description of the GM ash tray that worked at 40 degrees below zero.

There are great lessons to be learned in this candid, entertaining book, and I dare say Mr Lutz would be an excellent raconteur.

Car-making, in essence, is a simple, if difficult business which requires the instinct of product experts - "car guys" - to be successful. The drive to manage away the idiosyncrasies of these very individuals in the name of consistency and process misses the stark fact that often times it is precisely that idiosyncrasy that generates the spark of excellence in the first place.

In the final analysis Lutz is grudgingly respectful even of Toyota: still a privately held business, with excellent processes and systems but still subject to an imperial will that Lutz found sorely lacking at GM.

A hymn to all those at the peril of management consultants and other well-intentioned parasites, this book is well recommended.… (altro)

Fun read, though occasionally (& deliberately) provocative. Lutz is no fan of sacred cows, and he'll skewer one or two of yours along the way.

This is basically a high-level account of Lutz' most recent GM stint, from 2001 to 2009. He spent the decade making war on the place's culture; in particular, he attempted to move Design back to the organizational center. To all appearances, those efforts are the reason the company's made a successful turnaround since the economy tanked and the American auto industry nearly died.

Worth reading. Lutz is actually nearly as good as he thinks he is.

This short review has also been published on a dabbler's journal.… (altro)