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GM's Lutz Makes His Mark with Solstice
Detroit Free Press

By Mark Phelan

Sept. 1, 2005

After four years at General Motors Corp., Vice Chairman Bob Lutz gets what he asked for.

The 2006 Pontiac Solstice is Lutz's baby, and both Pontiac's future and his legacy ride in the little roadster.

GM hired Lutz in 2001 to inject style and passion into a humdrum lineup. He challenged the company's designers to create an exciting sub-$20,000 sports car as the first step.

The Solstice is that car. If it succeeds, Lutz's legend as one of the industry's great car guys is assured, and GM's future looks a bit brighter.

In a conversation with Free Press auto critic Mark Phelan, Lutz talked about his hopes for the Solstice and GM's future.

QUESTION: Is it reasonable to say the Solstice is the first car that was completely developed on your watch?

ANSWER: The Solstice and the (Chevrolet) HHR and (Hummer) H3 all are.

Q: What does the Solstice say about where GM is compared to when you joined the company four years ago?

A: I think what the Solstice has done is signal value inside and outside the company. Inside the company – even though it's a relatively low-volume car – it's a tremendous morale builder. I've gotten a lot of e-mails – and so has (GM Chairman Rick Wagoner) – from employees saying, "Boy, it feels good to have this company produce a clear-cut winner."

It gives our employees faith that yes, we can do it.

Taking intelligent risks on exciting new stuff is not only a legitimate strategy, it's the only strategy that will work over time. Playing it safe is going to lose in the long term, because everybody else is taking intelligent risks -- like Chrysler did with the 300.

Playing it safe is not an option.

Q: Some vehicles have really moved the needle for brands -- the new Cadillacs, the Chrysler 300. Is the Solstice one of those cars that may force people to re-evaluate a whole brand?

A: The Solstice is supposed to have shock value. Just like the Viper did for Chrysler. Cars like that are a different way of paying for advertising.

For the money it took us to do the Solstice – roughly $230 million to $260 million – we could have taken a corporate-image ad campaign saying "GM cares." It would have been here today, gone tomorrow, and done very little to change people's minds about GM.

People don't buy GM cars because we're nice people. They buy GM cars because they represent great value.

Doing something like a Solstice demonstrates that GM and only GM can do a car that's equivalent to a BMW Z4 or even a Porsche Boxster, only instead of charging $45,000, we charge $19,995.

It's an enormous bargain.

The Solstice is the icon of what's changing at GM.

Q: Does each of GM's brands need a flag-in-the-ground car to define it like the Solstice does Pontiac?

A: Arguably yes. We've got all kinds of great ideas for things we can do with iconic Hummers without getting bigger and bigger.

Cadillac is a no-brainer. Someday we're going to do – it's definitely in the product plan, but not kicked off yet – we will do an ultra-luxury sedan involving an engine of more than eight cylinders and costing far more than any Cadillac has ever cost before, but not going into the $300,000 area. As Maybach has proved to our satisfaction, nobody buys those. There aren't enough un-intelligent billionaires around. The world is running out of stupid billionaires.

An iconic Chevrolet we have with the Corvette. We can probably go a step beyond Corvette and do the killer all-out performance car that embarrasses the $500,000 and million-dollar performance cars.

For Saturn, it will be the Sky roadster.

Buick we haven't quite figured out yet. We've got to come up with something there.

You know the (Buick) Velite concept –we just have not identified the necessary capital and engineering resources for it yet.

Q: Is the look, the first impression, the most important thing for a car?

A: Yes. The inner values of cars today are all close to identical. They all meet government crash regulations. Those are so high now that the difference between least safe and the most safe is (immaterial). The same with quality and durability.

Now the differential is how badly do I want the car? That's where, frankly, we've been a little weak.

Q: I was amazed at how quickly the perception of Cadillac turned around when the brand got good vehicles.

A: Me, too. (When) I was at Chrysler, I thought Cadillac was hopeless.

Q: How long does it take you to repair people's perception of the other brands?

A: It takes time. We shouldn't tell ourselves the Cadillac brand image is fully rehabilitated. It's on an upward slope, but it is by no means where we want it to be. All we can say is it's hit the turning point about three years ago and has been on a gradual upturn.

As we measure Pontiac and Buick, they have stopped deteriorating. They have stopped sliding.

I'm confident that with cars like the (2006 Buick) Lucerne and the future Buick crossover, that Buick will turn, because they will have beautiful cars.

The Lucerne will make a much larger emotional connection with customers than the LaCrosse did.

Pontiac, I think the combination of the Solstice, G6 coupe and G6 hardtop convertible will make a difference.

I'm so pumped up about this place. I keep haranguing Rick and (GM Chief Financial Officer John Devine), asking, "When can we buy stock again?" I'd hock everything.

The bottom line is that this place has more capability than any American automaker, and probably more than any automaker in the world, except probably equal to Toyota.
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