At GM, Bob Lutz Maps a Different Route

The former Chrysler honcho aims to produce some hot new models by pitting teams of designers against each other

Since joining General Motors Corp. (GM ) in September, development chief Robert A. "Bob" Lutz has been working to make product development more efficient. The ex-president of Chrysler Corp. is taking a leaf from his former employer's book and pushing designers and engineers to use more off-the-shelf hardware in crafting new models. In addition to giving stylists greater freedom, Lutz also has asked GM's designers to find inspiration in classic models, the goal being nostalgia-inducing cars -- rather like Chrysler's PT Cruiser.

Now, he's doing something else that is very un-GM. In a broad restructuring of the auto maker's product-development organization, Lutz is ditching the brand-management philosophy of design implemented by retired board member John Smale and recently departed GM North America President Ronald L. Zarrella. He's also stripping layers of bureaucracy from the product-development process and making GM's different business groups -- such as engineering, manufacturing, and design -- work more closely together.


  A lot is changing. No longer bound by rigid rules, designers will be empowered to style cars in the spirit of their divisions. Under Zarrella, who departed last fall to become CEO of Bausch & Lomb, GM would identify a demographic and try to win it over with a vehicle and brand image tailored to the market segment's tastes and desires.

The resulting models, however, rarely hit the mark. Now, Lutz wants GM to focus on making better vehicles. "Products drive brands," Lutz said in December. "You cannot transform great brands without great products."

Sounds good in theory, but Lutz needs to prove that his new organizational structure can work. While his approach puts a focus on product development, he'll have to make sure that the different departments within the huge corporation work together. Nor will the restructuring matter, says James N. Hall, vice-president of auto research firm AutoPacific, "if they're not coming up with anything that people like."


  At the very least, Lutz is sharpening GM's focus. Each new-vehicle program will boast a team of engineers, designers, bean counters, researchers, and product planners working in concert. In the past, a new vehicle would start with designers who created the concept. Next, it would go to brand managers for their input. Then manufacturing bosses would take their turn and decide what chassis, platform, and parts to use. Finally, engineers would make a few more alterations. It was a process of change and compromise every step of the way. In some cases, new cars were approved and money spent before the styling has been thoroughly reviewed.

Under the new system, design moves to the forefront. For every vehicle idea, three teams will compete to create what will eventually make it to market. Lutz held just such a contest to develop the Pontiac Solstice concept car -- a two-seat roadster that was lauded for its looks at last month's auto show in Detroit (see BW Online, 1/8/02, "Will Solstice Light a Fire for Pontiac?"). If cars destined for dealers' showrooms can inspire similar reactions, Lutz's bold reorganization will have been a success.

By David Welch in Detroit

Edited by Patricia O'Connell

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