Surprise! Bob Lutz Is Headed for GM

Chrysler's ex-president will be head of product operations

General Motors Corp. (GM ) may finally be catching on. After years of churning out nondescript cars that lost market share, GM Chief Executive G. Richard Wagoner Jr. has embarked on a major push to hire some of his rivals' top designers. In the process, he has sought advice from retired Chrysler President Robert A. Lutz. "I have talked to Rick a number of times about how to fix the problems," says Lutz.

Now, Wagoner has snared Lutz. GM will hire him as head of product operations. Turns out that, aside from giving advice, Lutz--a design buff who is credited with much of Chrysler Corp.'s (DCX ) resurgence in the 1990s--has been has been talking to Wagoner about a job for himself. To join GM, Lutz has handed the CEO job at Exide Corp. (EX ), the battery maker that he went to in 1998 after retiring from Chrysler, to company President Craig Muhlhauser, but will retain the chairman's post.

A role at GM might just satisfy the restless executive, who oversaw the development of such hits as the Dodge Viper and the PT Cruiser at Chrysler. Since retiring in 1998, he has been running Exide in Ann Arbor, Mich. Still Lutz, 69, concedes that managing Exide doesn't tap his greatest talent: building cool cars. "My bag of tricks--knowing what cars to do--is an ability only applicable to the car business," he says.

That's exactly the kind of talent GM's finance-heavy top ranks could use. The company has long had a reputation for stolid design, and recent attempts to improve it haven't worked. Last year's aggressively styled Pontiac Aztek sport utility, for example, was derided as garish. It sold poorly. "They're taking risks, but just can't differentiate between winners and losers," says Deutsche Bank Alex. Brown analyst Rod Lache.

Lutz certainly should be able to. He offers several skills GM's design team has been lacking: a keen eye for winning design and willingness to speak out. "GM still has too many bland, me-too vehicles," says Saul Rubin, an analyst at UBS Warburg. "That's where Lutz could make a difference."

DROWNED OUT? Still, bringing pizzazz to GM's lineup won't be simple, even for Lutz. Although it has hired other hot designers, GM's huge bureaucracy is resistant to change. Even at Chrysler, Lutz had a hard time getting the pt Chrysler approved over his doubting subordinates. "Just getting a product guy won't be enough," says James N. Hall, vice-president of AutoPacific Inc. "The structure of the business won't make it easy to get things done." Still, with Wagoner's backing, Lutz must see a chance to make a change.

Wagoner's move to bring Lutz in is part of a broader effort to shake up GM's design ranks. Last year, Wagoner tried to hire former Chrysler design chief Tom Gale, a force behind the Dodge Ram pickup and Jeep Grand Cherokee. More recently, he also made an offer to Ford product-development boss Richard Parry-Jones, says one source close to GM. Likewise, Wagoner is said to have had his eye on Wolfgang Reitzle, who heads Ford's Premier Automotive Group--its luxury unit. And he was interested in Ford chief designer J Mays to replace Wayne Cherry, 63, the design chief who's expected to retire in two years. So far, only Lutz is biting. But Wagoner clearly has gone fishing.

By David Welch in Detroit

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