LUTZ of NEWS TODAY..! I mean lots of Lutz news today! Top man at GM is the PR king!

“Been there, done that,” asserted GM Vice Chairman Bob Lutz.
It is “natural,” he said, that some of the larger imports, like Honda and
Toyota, will continue expanding into more of the product segments they’ve so far
missed. But it’s also a reality of the market that no carmaker, even GM, can
dismiss the high cost of marketing. Add too many products, even with a bank
account like Toyota’s and you will simply have to orphan some of your
products. And without solid advertising support, such products will quickly disappear
from the market, Lutz cautioned. —Paul Eisenstein


THE NEXT BIG THING IS THE SAME OLD THING
Forget “the next big thing,” at least when it comes to automotive
retailing, contended GM Vice Chairman Bob Lutz. Despite plenty of hype over the last
two decades, traditional dealers continue to dominate and are largely doing
business the same way as always. “The automobile dealer is chameleon-like in
his ability to adapt,” Lutz said during a Traverse City luncheon. The latest
false start was the Internet, which many proponents promised would prove the
most cost-effective way to sell cars. Instead of being a paradigm shift, it was
“just another enabling tool.” Insisting the current retail system is here to
stay, Lutz said it might “change when we can transmit physical matter over
the airwaves.” Beam me down a car, Scotty? —Paul Eisenstein


LUTZ: NO PLANS TO LEAVE
He’s not only back, but it looks like Bob Lutz isn’t going anywhere anytime
soon. General Motors’ Vice Chairman and “product czar” is just wrapping up
his first year on the job, and there’s no question he’s had a dynamic impact
on the long-troubled automaker. Even skeptics admit GM is moving faster and
more creatively these days, a fact underscored by last month’s 24-percent sales
increase. Lutz says his job will be shifting a bit as he starts to focus
more of his attention on GM’s European operations in the months to come. But the
question most are asking is how long Lutz will be around. When he joined GM
last year, he signed a three-year contract. But “it was never to be three and
out,” the surprisingly youthful 70-year- old revealed over lunch in Traverse
City. The former Marine says he’d be willing to stick around for “an
indefinite period” -- that is, if GM CEO Rick Wagoner wants him. And why not? Lutz
has not only changed the way GM designs and builds cars and trucks, but he’s
having a radical and very positive impact on the way the world views the
company...including consumers. Oh, and if you’re wondering how many more good
years he has in him, Lutz’s father set a good example. A Swiss banker, Lutz
senior kept working until he was well into his 90s. —Paul Eisenstein


GM SAYS DEVELOPMENT WILL BOOST SHARE
General Motors expects its share of the retail new car market to reach 29
percent this year or nearly a full point higher than it was a year ago, GM
Vice Chairman Robert Lutz told reporters after a speech at the annual management
briefing seminars in Traverse City. "You no longer hear the continuous
drumbeat," describing GM as cumbersome and bureaucratic, Lutz noted.

"Our manufacturing system is very nearly world class," he added, but
"Quality is very clearly a problem.” Warranty costs are still too high and the
company could still do more to drive down administrative costs, Lutz said. "We've
never claimed to be as good as we want to get," Lutz added.

The company's product development effort is now drawing out the innate
creativity and talent of GM's designers and engineers, said Lutz. The favorable
developments are also having an impact on the public's perception of the
automaker.

Other companies, notably Volkswagen and Chrysler, have succeeded in turning
around their image in a relatively short time and GM can do the same thing,
he said.

Lutz also said the steady appreciation of the U.S. dollar during the late
1990s made the Japanese and European automakers look exceptionally strong. The
value of the dollar is starting to drop and the shift will boost GM's
chances both to price aggressively against foreign competition and to export image
vehicles such as the Cadillac CTS.

"The days are long past where GM was so arrogant that we thought we knew
everything, invented everything and were better at everything than everybody
else in the world. We're ready to learn," said Lutz.
"In my current organization, we're knee- deep in talent and creativity and
it's being unleashed and encouraged. Not just by me but by all of our senior
management," Lutz added. —Joe Szczesny


LUTZ DISMISSES LONG WARRANTIES
Lutz also said Wednesday that GM analyzed whether it should follow
Chrysler’s 7-year/70,000-mile powertrain warranty and decided it had more downside
for the automaker than upside. “We analyzed it and people actually associate a
long warranty with problems they perceive you have,” said Lutz. GM surveyed
consumers about how they would react if Toyota put a long warranty on its
vehicles, and the results showed consumers believed it was a sign of quality
problems at Toyota. Suzuki, a GM affiliate, launched an even longer, more
comprehensive warranty than Chrysler last week. “It’s right for Suzuki, because they
are competing directly with the Koreans who offer a long warranty,” said
Lutz. “It might make a difference for those sitting right on the fence between a
full-size Ram pickup and a Silverado or H2, but the cost of doing it far
outweighs the benefit that you might get from that relatively small number of
buyers,” said Lutz who said GM’s warranty costs were still much higher than the
company would like to see. —Jim Burt


SUBARU VALUABLE, BUT NOT EASY TO INTEGRATE
Lutz said GM has not yet found a vehicle it could co-develop with its Fuji
Heavy Industries affiliate because the parent company of Subaru is committed
to its horizontally opposed engine architecture, which GM can’t adapt. “They
feel the horizontally opposed engine is very important to Subaru’s brand
equity, and they don’t want to deviate from it,” said Lutz. And GM doesn’t want
to get into the situation of simply taking a horizontally opposed engine and
calling it a Chevrolet or Pontiac “because we’d be accused of just rebadging a
Subaru.” GM owns 25 percent of Fuji. Fuji Heavy Industries has taken an Opel
Zafira microvan built in Thailand and sells it as a Subaru in Asia, but that
is the extent of the material cooperation so far. —Jim Burt


LUTZ ON FIAT
"It would be a complete waste of time for me to talk about Fiat," said
Lutz. "We just don't know. I don't think Fiat knows what they will do...we are in
the area of nobody knows." GM owns 20 percent of Fiat's struggling
automotive unit, and the Italian automaker can exercise an option to force GM to buy
the remainder of the company. After GM inked the deal in 2000, the company
talked of selling Alfa Romeos in the U.S. through Saab or Cadillac dealers.
"They have their hands full just turning the thing around," said Lutz.