GENERAL MOTORS IMPLODES ON “60 MINUTES”
WHAT HAVE RICK WAGONER AND BOB LUTZ DONE FOR ANYONE LATELY? NOTHING.
Anyone who thought there was a chance of General Motors succeeding while keeping things “business as usual” only had to watch the April 2, 2006 edition of “60 MINUTES” on CBS-TV to understand the two main reasons we are seeing the destruction of what was once the world’s greatest and most profitable manufacturing corporation: Rick Wagoner and Bob Lutz.
Wagoner evidently thinks there is only thing wrong with GM: Unions.
Rick Wagoner was born in Wilmington, Delaware (legal home to many of America's biggest corporations) and grew up in Richmond, VA. He received a bachelor's degree in economics from Duke in 1975 and an MBA from Harvard Business School in 1977. No word from Wikipedia on whether he ever owned a car in his youth.
After Harvard, he joined GM as an analyst in the treasurer's office. In 1981 he became treasurer of GM do Brazil, and later served as managing director. In 1992 he was named GM's chief financial officer, in 1994 he became executive vice president and/or president of North American Operations, and in 1998 he was named president and chief operating officer. He became president and chief executive officer in June 2000 and was elected chairman on May 1, 2003.
In April 2005 Wagoner took back personal control of GM's North American car division in light of its poor performance.
Asked by “60 MINUTES” reporter Steve Kroft, “How did GM get into this position?” of near-bankruptcy, Wagoner didn’t skip a beat as he talked about the “long, almost 100-year history” of GM, and the many costs for worker’s health care and retiree’s benefits built into the cost of every GM car and truck, estimated to be almost $2,000 per vehicle.
Wagoner believes the only thing GM has done wrong in the past 30 years was to sign union agreements which, he told “60 MINUTES”, seemed “cheap at the time”, but which in the long run turned out to be another story.
Bob Lutz was born in Switzerland and started with GM in Europe in 1963. He went onto serve with Ford, BMW and then Chrysler, where along with Bob Eaton, he green-lighted hit vehicles like the Viper, PT Cruiser and Prowler. After Chrysler, Lutz ran Exide Battery, where he still holds an executive position, perhaps as a back-up to whatever may happen at GM. Wagoner hired Lutz in 2001, to much fanfare within the automotive community. Wall Street liked the hire --- a bean counter with aspirations to product designer who already had some 'hits' under his belt.
What has Lutz accomplished at GM? Well, not much so far. And this year, 2006, is when the industry expected to see the fruits of Lutz’ hire.
For the “60 MINUTES” interview, Lutz escorted reporter Kroft into a section of the Cadillac design studios in GM’s Warren, MI, Holy of Holies. Acting as if he were trying to impress a bunch of high school journalism students, Lutz walked Kroft into a large room with a number of (apparently) cars and trucks all covered by blue tarps. Lutz would lift only the front cover of one tarp, where viewers saw what may have been a future production car (with a Caddy badge on its overwrought grille) or a bit of concept work being developed by one or more designers.
Wagoner walked Kroft through the Detroit Auto Show’s gigantic GM exhibit (they did the interview during press days, so the exhibits were sorely empty of spectators) and showed-off the concept Camaro, which Wagoner would not commit to producing when asked by Kroft, and the Saturn SKY, which had Kroft declaring, “Well, it’s not dowdy”.
One of Lutz' main ambitions has been to return the "performance" to Ponitac. He decided to import the Holden Monaro, built by GM of Australia, already outfitted with the Corvette 350 horsepower drivetrain and 6-speed stick shift, and call it the Pontiac GTO.
Sacrilege, at best, to GTO traditionalists; a bomb as far as sales.
Resurrected GTO sales were so poor its first year that the company quickly “went back to the drawing board” and added the much-needed hood scoop and multi-pipes which purists rightly insisted should have been on the first models.
Sales targets were never reached, and even with the engine hot-rodded to 400 horsepower and the car involved in some racing to try and draw attention to it (NHRA drag racing, Drifting), the car was announced as “dead” in 2006. Lutz would only say that IF the new Camaro were actually built for production, and IF it were successful, along with a Pontiac Firebird on the same platform, then GTO MIGHT once again make an appearance. In classic GM form, this "new" GTO would be the third planned-for model on the same platform with the same drivetrain. That GTO will be dead before the first one is built.
Wagoner and Lutz are not responsible for all of GM’s problems today. Those problems began back in the company’s most arrogant hey-days of the late 1950s and early ‘60s, when the only troubles the company had were two-fold: 1) Producing enough vehicles to meet the demand, and, 2) Keeping the government from breaking the company up as it was considered a monopoly.
Today’s GM problems are much different and much more serious; it is, however, clear that Wagoner and Lutz are not the men to set straight what is still America’s most important manufacturing concern, directly affecting over 1 million employees and retirees, and the families, company’s, dealerships and city’s they underwrite.
What’s YOUR feeling?
Comments