Bob Lutz is a gift. The Car Czar’s uncanny ability to spout uninformed, arrogant nonsense makes analyzing GM’s corporate confusion a slam dunk. Unfortunately, the mainstream automotive press prefers to proffer a protest-free platform for Maximum Bob’s maximum BS. So be it. We can still read between the lines. In this case, Automotive News [AN] blesses us with a bit of Maximum Bob raw. It’s deeply worrying stuff.
AN begins by asking Lutz how the new Malibu can overcome its rep as a daily rental car.
A lot of the advertising is designed to take that head-on. We're not going to erase that perception gap in this generation. People are still going to go to the Toyota store and are still going to get a Camry. They're not going to care that most of the models are no longer recommended, and they're not going to care about all the quality problems. It's a learned response. That's going to be hard to erase.
Lutz begins by feigning glasnost: we here at GM are not afraid to take on previous reputation with brand new most excellent automobile. And then Lutz commits marketing’s cardinal sin: insulting the customer. If you don’t consider the “perception gap” an inherently demeaning concept– our cars are as good/better as theirs; you’re just too stupid/bigoted to know it– Bob’s no-holds-barred attack on Camry buyers’ loyalty should convince you.
Earth to Bob: don’t diss the customers you can’t afford to miss. And is it me or does Bob’s idea of “erasing” Camry buyers’ “learned responses” sound way too 1984 for a car guy plying his trade in a free market? As he has so many times before, Bob seals the deal with outright ignorance; Consumer Reports dropped one of Camry’s three models from its thumbs-up list (the V6). “Most” Camry models remain recommended.
So, Bob, what will happen to GM's recovery if sales of the car you've touted as the Camry-killer misses its mark?
It's not a make-or-break car. We expect it to do moderately well, and we expect it to be recognized by the media as one of the best mid-sized cars out there. We expect that not all but some import intenders will come back to this car or try it for the first time.
Huh? if the new Malibu is not GM’s make-or-break car, what is? Is this the same Malibu that Maximum Bob told Edmunds that "in terms of fits and finishes, gaps, interior quality and so forth, you’re going to find the Malibu is equal to, I think, the Camry. And with the V6 engine, it outperforms it and I think it outhandles it. It also outbrakes it. I believe personally, subjectively, that it’s more fun to drive. And we do have a price advantage”? Now it's "one of the best" that will do "moderately well?"
Has Maximum Bob run out of hot air gas? AN picks-up the bad vibe (so to speak) and runs with it. What's it gonna take to make GM profitable in North America?
We've made a major move with the labor agreement. What still remains to be done is getting better net pricing or better transaction prices on the cars, which means lower incentives. But the environment is pretty difficult right now because I think we're facing an increasingly weak market. The market has to come back a little bit.
Part A of Bob’s reply is boilerplate bluster. Part B is completely out of character for Maximum Bob. We know what we need to do but we can’t do it because the market sucks. We’re going to keep our heads down and wait.
Coming from GM's CFO after yet more market share decline, the statement wouldn't merit a second listen. Coming from GM’s Vice Chairman of Global Product Development, this wiggle room makeover is a shocking Volt from the blue. If Maximum Bob’s no longer GM’s dopey-headed cheerleader, what the Hell’s going on down there?
To cheer him up, AN asks Bob if the Chevy's hybrid Hail Mary is a goer. Bob reckons it's an ipso facto-mobile; if the Volt wasn’t doable, why would GM even try? (Note to Bob: you’re got 400 engineers on the job, not 200.) And yet…
So is there a possibility next spring when we have our first cars and we drive them, the batteries don't live up to our expectation or they don't accept the charge as quickly as we'd like or they don't deliver quite the range; they deliver 35 instead of 40 miles? That is a possibility. Right now, we don't think that will happen. Even if it does happen, it's an engineering problem that we will solve through further development.
Further development. It’s what GM does best! Just look at the… the…. In any case, it seems clear to this industry watcher that someone or something has knocked the wind out of Maximum Bob’s sails. Could it be reality? Jim Farley-esque really real reality? Stranger things have happened. Wait. No they haven’t. Expect Bob to return to form and/or– as we have been predicting for quite some time– a shit storm of epic proportions.
[The Automotive News interview with MB is available (by subscription) here.]
Well, has GM lost it’s Farrell-esque cheerleader? I thought that we could count on Bob to be nuttier than squirrel poop until he retired. Then he’d write a book about how the cheerleading was a facade for a truncated turnaround.
C’mon Bob, if even you can’t be optimistic about GM, what are we going to use for fodder around here?
“Twenty-four is the new 28 [% market share].”
Will Bob have pins made?
Robert you ask, ‘What the hell is going on down there?’ and rightfully so. Consider this: Ol’ Bob and the upper crust in GM may have smashed head-on into reality as you suppose (maybe). So they write of $B30+ in tax credits on the basis of no profits in the immediate future. Then Rick tells Bob to tone down the ‘we’re better than you’ rhetoric. So now the new ‘bu is not the camcordima killer he used to claim it was and now merely a competent contender in the mid-size class.
Could it be that a new policy is taking shape at the General, one that leads to CH11?
If you just read the direct quotations Lutz sounds like a man with his head screwed on straight. Maybe he has recently graduated from a 12-step program.
Bob “the Putz” Lutz continues his march into the history books as a master of automotive mediocrity.
Dissing Camry customers? Saying the Malibu is NOT a “make-or-break” car?
I wonder what made ‘da Putz’ change his mind. Months ago Bob was proclaiming that the new Malibu was THE car that would make-or-break GM’s turnaround.
A generation?!? Hyundai is making and backing quality products and has taken only 5-7 years to gain consumer trust. He must really not believe in his company if he is writing off 20-25 years of production. Sell your stock.
I can almost hear the chatter in the marketing restroom: “CAN’T SOMEONE PUT A MUZZLE ON THAT GUY?”
If some engineer, in a trade magazine interview, made a comment like that about possible premature ejaculation of the Volt, he’d be fired without hesitation. And his cavalier solution of “further development”- what about those initial customers?
Bob’s right about a perception gap, wrong about who has it.
Bob Lutz is not a ‘mitzvah’. Mitzvah means a commandment, from the Hebrew ‘Tzavah’- to command.
Perhaps Bob Lutz is what an automotive journalist who recently stumbled upon a well-worn copy of The Joys of Yiddish would call a ‘metziah’, which roughly means a ‘good find’. A good find for journalists to analyze and critique, but certainly not a metziah for shareholders or anyone believing in the future of the auto industry in America.
I think the far more colorful ‘putz’ would be in order.
They’re not going to care that most of the models are no longer recommended, and they’re not going to care about all the quality problems. It’s a learned response.
Much like it’s a learned response that GM build sub standard cars, so people avoid them. Oh wait, that’s a “perception gap” and is not GM’s fault! Of course, silly me!
Also, what quality problems is Bob Lutz, banging on about?! Maybe someone should warn Bob “I’m a liability” Lutz that he shouldn’t engage a “who’s more reliable” war with Toyota as he could come off worse.
Mr Lutz had a great opportunity to say something along the lines of:
“The new Malibu represents a new generation of GM. A GM which now has a clear vision. Note the styling and build quality. A car which can now stand proud along side the Camry and Accord.”*
A statement which is to the point about how proud GM is about the new ‘Bu and showing repsect to their competitors and showing their humility.
Instead, what did get?
“Camry drivers are idiots and it’s not that important if the new ‘Bu fails”.
Yep, don’t panic all, Mr Lutz is on the case(!)
* = If anyone at GM read my press statement and liked it, may I say, that I’m availiable for work and could probably do a better job than half your staff! I’ve always fancied working in America!
mimizhusband nailed it. If the Koreans can come from literally nowhere and be poised to catch the Japanese in consumer perception, what the hell is GM’s excuse?
GM will be a niche truck maker and a health care provider by the time I reach the age of 45.
–chuck (I was born in 1963)
http://chuck.goolsbee.org
Memo to Mr. Lutz.
Look at your own scores in CR before you take a kick at another company. Toy had a few boo-boos, you have more bad than good and your highest scoring vehicle (Vibe) is a Toyota. Might be a bad time to point out reliability scores, the customers might look at yours again.
Just a thought buddy.
Bunter
Bob Lutz won’t take it anymore, he now considers himself an environmentalist. Look at the video interview he gave to Wall Street Journal (via TenGears)
http://www.tengears.com/home/2007/11/17/bob-lutz-is-fighting-back.html
But i do have to say that GM is moving in the right direcion with their Hybrids, like it or not but Bob is behind those hybrids.
Well, Yutz, the problem maybe is that your company ripped people off year after year for decades. Shame on their bigoted selves for remembering that.
>>If the new Malibu is not GM’s make-or-break car, what is
That would be the Chevy Citation, which was Cited as Euro in styling, Nipo in reliability and good old USA in DNA. And also a few other cars released in the intervening 3 decades.
The credibility gap does exist. And yes, it is on the part of the customer, when he asks, Jeez, GM, we’ve heard this born-again jibba-jabba time and again, why should we believe you THIS time?
Not good when the chiefs start throwing in the towel. As managers, we’re taught that we’re not allowed to show a bad day to the rank and file. And yet, here is Maximum Bob spouting off, selling mediocrity like it’s the best GM can do. Dang it, I really would like to see GM survive…just had an Impala LTZ as a long-term cruiser and can see where they have potential. Really. No kidding. But when the top dogs are sticking their collective heads in the sand, it can’t look good to those who are cheering for the home team. How much did GM pay him again? Sheesh…
Aside from the bad form of direct Toyota bashing (“no longer recommended” & “quality problems”), I don’t see much to bitch about with Bob’s comments that were excerpted. The guy seems to call it like he sees it, and as one other comment states, he seems to have his head screwed on straight. How refreshing, even if it is only a temporary thing until he gets bitch-slapped by GM’s PR guys.
Why do you say “worrying”? What do you want, a breathless “OMG, if the Malibu isn’t, like, the most super fantastic sales success evar, GM will just, like, fold up and DIE!!”? As I read it, he says this car important step in overcoming people’s “learned response” that GM cars are only worthy of the rental counter. Fair enough. And should he ignore that a tough sales market will mean fewer people are willing to be adventurous with a car purchase – to give GM a try? I’d think he was some sort of Marketing-droid Pollyanna if he didn’t acknowledge that GM has a tough row to hoe, no matter how good the Malibu is.
And him stating that they don’t know precisely what they will get on the Volt is, to me, “keeping it real”. Because at this point they can’t know, unless they’ve already done all the work and the “development in public” thing going on is all a show. Again, you seem to want Bob to express only supreme arrogance that they will create something brand new on an aggressive schedule with no problems at all. That would be utter BS, and I’m pleased to see that Bob doesn’t spew it this time. I’d like to see the Volt succeed, and kinda wish GM would shut up about the Volt until they have more of a clue what they can really do, rather than running radio advertisements for a car that won’t see a showroom for at least three years. Lest it become like the Camaro by the time it arrives.
Wow great dissection of the smooth doublespeak of GM’s head cheerleader, RF.
Ya gotta admit though, for an octagenarian, he’s a good looking man with a fine head ‘o hair – like Ford’s Mark Fields, he’s apparently made a deal with the devil where in exchange for selling out to his corporate overlords he remains youthful and handsome for decades. Too bad the big 2.8 can’t just build better cars, instead of playing so many games…
It’s not a make-or-break car. We expect it to do moderately well, and we expect it to be recognized by the media as one of the best mid-sized cars out there. We expect that not all but some import intenders will come back to this car or try it for the first time.
I guess I’m not sure why this is such an objectionable quote. It seems to me to make sense to lowball expectations, that way you have the possibility of saying in the future “Wow, this was an even bigger hit than we expected!”. Also, should he have said “If the Malibu fails, GM is dead.”?
Not good when the chiefs start throwing in the towel. As managers, we’re taught that we’re not allowed to show a bad day to the rank and file.
Sometimes I feel bad for Bob Lutz. Damned for being an optimist, damned for being a realist.
C’mon guys. Stick to the point: Bob Lutz is throttling WAY back on his expectations for this model. Speaking to/at Edmunds…
“The Malibu has better performance and far better ride and handling [than the Camry]. And I believe the Malibu is roomier. The new Malibu, you put that next to a Camry and I tell you, in terms of fits and finishes, gaps, interior quality and so forth, you’re going to find the Malibu is equal to, I think, the Camry. And with the V6 engine, it outperforms it and I think it outhandles it. It also outbrakes it. I believe personally, subjectively, that it’s more fun to drive. And we do have a price advantage.”
True BL does seem to spout alot of BS, true we often hold our head in our hands and wonder why when he does impart his knowledge, but if you actually got to work with the guy he does know his stuff. And if i’m not mistaken the Bu got a good write up on here as well…
Samir-
If you think something looney is true you’re an optimist.
If you know it isn’t and say it anyway your a liar.
Bob Lutz has repeatedly said they are equal to anybody in reliability/quality. If Toyota got the same JDP VDS and CR scores as GM they would get laughed off the face of the earth.
He knows the truth-he says something else. He deserves any ridicule he gets.
My opinion.
Cheerio,
Bunter
Ya gotta admit though, for an octagenarian, he’s a good looking man with a fine head ‘o hair – like Ford’s Mark Fields, he’s apparently made a deal with the devil where in exchange for selling out to his corporate overlords he remains youthful and handsome for decades. Too bad the big 2.8 can’t just build better cars, instead of playing so many games…
Thanks for the laugh.
Yo yo Bob. One day we have the Camry killer the next we don’t. The Volt will be here fast and stomp the competition, now umm maybe not those damn batteries are not Energizers. And you stupid customers, stop buying there junk and buy some of mine. I can’t wait to see what he say next but I know it will be entertaining.
This company is sooo in trouble at this point, with there back against wall green advertising, pushing products that don’t exist, and an ocean of unsold cars and trucks going at fire sale pricing. 2008 should be an interesting year for GM and probably Ford too. Bankruptcy lawyers must be excited as they await the fireworks.
I’m one of those Camry buyers who used to be a GM fan.
I know Bob Lutz has a penchant for hyperbole.
Therefore, Bob, I’m not coming back, if ever, until a long time in the future, when many years of hard data are available to reveal the truth.
“Slip Sliding Away, the nearer your destination te more you slip sliding away” GM went down almost 9% in stock price today, that means it is down $16 a share since October 1, 2007, does anyone see a problem here? It has almost dropped in half in six weeks. Yikes!
I had a rental Cavalier once, maybe a year old, 05 or 04 with under 15k miles on it at the time. It was a late enough model with that “silent steel” junk the PR guys loved to shout about. In the course of three days, it left me stranded once, and the key kept shaking out of the ignition, but the car would run regardless.
Let me tell you, that when your keys hit the floor going at 75, even if the car is behaving normally otherwise, all kinds of nasty thoughts and later, nasty words cross your mind.
The impact of that experience is going to influence my car buying decisions a lot more than anything the ads or MaxiLutz can and will say.
Bob Lutz reminds me of my Dad. They are both desperately optimistic. It’s like they both read some new age self help, “create your own reality by changing your thoughts” book. It’s like they think if they say something is so, or think something is so, then it is so. Or their thoughts will and do create their reality. They each live in a oblivious, everything’s perfect type reality. Mr. Magoo types.
I like to think of myself as being a realist and firmly grounded in reality. Also sorely negative and pessimistic(not by choice; by nature). I tend to clash with and destroy these other types optimism. Not by choice or intention. It just happens. I actively avoid doing so as it’s just too sad seeing them dragged down to my reality and having to live it until they can get back into their disbelief.
Samir Syed:
Sometimes I feel bad for Bob Lutz. Damned for being an optimist, damned for being a realist.
Bob Lutz is not a realist. Far from it.
Robert Farago:
C’mon guys. Stick to the point: Bob Lutz is throttling WAY back on his expectations for this model. Speaking to/at Edmunds…
Exactly. This is the very same vehicle that months ago Lutz proclaimed would be THE make-it-or-break it car for GM.
Johnson-Agreed.
If El kaBob “sounds realistic” then we can virtually count on the actual reality being pretty bad.
If he sounds sober and considered look for something UGLY to come up soon. Nov. sales maybe?
Bunter1:
If El kaBob “sounds realistic” then we can virtually count on the actual reality being pretty bad.
If he sounds sober and considered look for something UGLY to come up soon. Nov. sales maybe?
I read somewhere (WSJ?) that GM “declined to discuss November sales” with their journo in some related financial-type article. An alarm bell went off.
RF-
I’ve been smelling a rat there for two months.
After people (like TTAC) noticed the “growing commercial sales” that boosted their numbers in August (not retail) I haven’t seen them break out the percentages for sept and oct which looked strangely just like August. Coming on the heals of the summer conflagration in June and July I’ve been pretty skeptical of their recent “sales success”.
When people stop giving data and start claiing miracles I get edgy.
Take care,
Bunter
* = If anyone at GM read my press statement and liked it, may I say, that I’m availiable for work and could probably do a better job than half your staff! I’ve always fancied working in America!
Katie,
I’d love to hire you. I had that thought reading your post before I read the asterisk. I would LOVE to hire you! With your combo of smarts and charm you’d make the old Max-Bob look like a total piker. But damn, I’m only one shareholder with two measly shares. David
I’m not sure what BOB Lutz said before about the BU, but his current opinion is very realistic in my opinion, whether or not he means it. The BU seems like a better drivers car to me, than the competition. Still I need Data. How good has that engine been? how good has the other derivatives been? Good thing the AURA and G6 are already out.
Good grief, I didn’t like GM before I read the article and now I really don’t!
Oh don’t worry he’ll get a nice golden parachute when he retires into the sunset though…
Bob “the mouth” Lutz more like it. GM only cares about making a profit! They don’t care about their customers or the product.
From the article:
“…I believe personally, subjectively, that it’s more fun to drive. And we do have a price advantage” (emphasis added.)
Nice, very nice.
It is exactly this mentality that is killing Detroit.
Like I said in my first TTAC article, GMs motto might as well be “GM: When you can’t afford anything better.” Even if that’s not the official motto, based on Bob’s quote above it seems to be the unofficial attitude of all the Detroit 3. Not “buy our cars because they are the best”, but “buy our cars because they’re almost as good and anyway, they’re real cheap.”
What is baffling to me is that the marketing people, who have budgets in the millions, can’t seem to understand what’s wrong with this sales pitch. Buyers will willingly pay $3000-$5000 more for a similarly equipped Toyota or Honda because they perceive that they are getting more for their money. Detroit can’t seem to break out of their downward spiral even with a significant price advantage, so why do they think that touting the price advantage is a winning strategy for them?