Dear Bob Lutz,

I watched you on CNN this morning while I was eating my shredded wheat. You were being questioned about the auto bail out and the answers you gave were smug and unapologetic. It was as if you expected a bail out and were indignant that you were required to "work" for this money. ( I put "work" in quotes because I believe the plan you gave to the government was of inferior quality and does not address base issues inside your organization.)

Sir, You put your company in a position where it must beg for money from the government to remain afloat. If a company cannot generate profit or have the wherewithal to weather a storm then it should go down by its own doing.

As my money must be now used to prop up and therefore justify your unsustainable business practices, I demand that you be fired. I base this not upon your products or business practices etc.... but your attitude.

I sincerely hope that the management of your company is turned over wholesale.

Sincerely...

One of 300 Million new stakeholders in GM.

P.S. Please read this article for a good explanation of how you killed innovation in your company.
http://www.nytimes.com/2008/12/06/business/06motors.html?_r=1

(edit: to be clear I think this guys attitude was reprehensible and NOT what is needed to fix his company. He blamed it entirely on "market conditions." I feel that if you had issues at a company such as this, it is not time to whine or complain but roll up your sleeves, admit you were wrong and GO GO GO).

Interesting view point. Care to back this opinion up with some facts? While it is very easy to say, styling is poor and lack luster, it is cost and profit that still drives the Auto industry.

The true answer does not lie in the homerun type "inovations" but in hard and detailed engineering. You can't afford good engineers when you have to pay a mill wright $35 an hour and have their medical burdon on your books for the next 45 years.

I'm trying to keep an evaluation of their products out of this, but the market will only purchase what the market wants. The evaluation of product threads have been beaten to death here recently.

Now.. I want to base my evaluation clearly off of his attitude and response to questioning. If it were I, I would be wholeheartedly embarrassed to admit that I failed on such a large scale. And, If I were in that situation I would feel that it was MY responsibility for this failure.

edit.. I included the innovation article, cause it was interesting from an MBA perspective, but really want to leave production quality/assumptions out of it..

Do you have a link to the interview? I'll try to google some myself and find it. What show was it?

Xceler8x wrote: Do you have a link to the interview? I'll try to google some myself and find it. What show was it?

It was on CNN at 6:30 this morning.. That is all I have.

Here is part of it, I found the CNN Studio and Mr Lutz' tie to distracting to hear much of what he said. http://www.cnn.com/video/#/video/business/2008/12/09/dcl.intv.bob.lutz.cnn?iref=videosearch

ignorant wrote: I watched you on CNN this morning while I was eating my shredded wheat. You were being questioned about the auto bail out and the answers you gave were smug and unapologetic. It was as if you expected a bail out and were indignant that you were required to "work" for this money.

Well DUH, Obama promised them whatever it took so that he'd get their votes, why should he have to work for it?

The car company's issues are directly related to thinking like an "MBA"! They where/are blue chip stocks. They make a small profit by the "dot com" comparision. They should be bewteen 3-5% thats it. Not the 10-18% all the MBA's tried to drive them to. The first thing an MBA learns is money now is worth more then money later, any questions as to who has been involved in the Auto industry leadership?

You can hardly blame GM's woes on Lutz. On the contrary, Lutz has been a breath of fresh air for GM, driving them to new ideas and new products such as the Solstice/Sky.

jstein77 wrote: You can hardly blame GM's woes on Lutz. On the contrary, Lutz has been a breath of fresh air for GM, driving them to new ideas and new products such as the Solstice/Sky.

I have to disagree with this. Given that it takes what, four to six years to fully develop a car from concept to production, we must look at what was being done four to six years ago. Here is the 2002 model lineup. Lutz came on in 2001. Here is the 2008 model lineup.. So these are his "babies". I hate to say it but as much as I want the Volt to be a success, it is to little to late.

Last thing I want to say is this: If we give GM $8 billion in cash to stay afloat because of the sour economy, how many sales would have to have be occurring now(!) for GM to not be in trouble?

Edit: On the 2008 list, I must exclude the Corvette. I think it is well agreed that is one "super" car.

GM has been making strides lately, but I think a chapter 11 is the only real way to save them. Otherwise, it's just a longer, more painful death. They need not only money, but a dose of faith from the consumer. Giving them a bailout in my opinion would create animosity towards them to where it could drive buyers away at a faster rate and be the finishing nail.

I had lunch with the owner of a GMC, Cadillac, and Pointiac dealership recently, and even he agreed that their only real hope is bankruptcy. And he hadn't sold a single car in almost a month. His biggest problem is getting someone through the door to test drive a car. They have a HUGE perception issue now, with a bailout, it's going to get worse.

ignorant wrote: ...He blamed it entirely on "market conditions."...

Wouldn't his job as the highly paid head of a company that is obviously wildly dependent on "market conditions", be to anticipate these "market conditions"!!??!!

Lutz is a breath of fresh air and he has no regard for being politically incorrect. Good for him. Tired of the rhetoric and PC crap.

racerdave600 wrote: His biggest problem is getting someone through the door to test drive a car. They have a HUGE perception issue now, with a bailout, it's going to get worse.

I agree with this 100%. At this point they could have the best product in the world, placed approriately, with good promotion, prince and it would still take a lot to get people through the door.

pkrstr8 wrote: The car company's issues are directly related to thinking like an "MBA"! They where/are blue chip stocks. They make a small profit by the "dot com" comparision. They should be bewteen 3-5% thats it. Not the 10-18% all the MBA's tried to drive them to. he first thing an MBA learns is money now is worth more then money later, any questions as to who has been involved in the Auto industry leadership?

full disclosure I just recieved my MBA from a top 15 school.. and I'm really not that bright but here goes a response..

1. How do you determine where a company "should" be for profit margin? For example say you benchmark and the rest of the companies in your industry are 3-5%, does that mean that when you get there you should stop? Should you not always try to be more profitable by removing waste and increasing profitability. That argument makes no sense. Any attempt to increase margin should not affect the customer in any fashion. Never screw the customer (yes I did learn that in the MBA) i also learned that short term wins are very powerful, but should never be employed at the risk of hurting long term sustainability/growth/viability(this is what I believe they did)...

2. It is mathematically correct that $100 is worth more today than $100 in one year due to the discount rate. Simply If you and I do the same job and are paid $100 each for it. You are paid Jan 1 for the job and I am paid Dec 31st of the same year. If you put your $100 in an ING account at 3% at the end of the year (assuming yearly compounding). So Jan 1 next year I have $100 and you have $103. You have more money than I. Simple math.

And that is not the first thing we learn. My 2 first classes were Accounting and Statistics..

1. Shortsighted people have been at the helm. Any attempt at saying the system is setup this way is not valid, as there are plenty of other companies out there run by MBA's that are planning for long term sustainability..

These particular guys(at GM) did not have the testicular fortitude to stand up to the market and tell them they'd rather plan long term than immediately make people happy, which never works out.

If you want to understand how an MBA is trained to look long term please read "Good to Great" by Jim(James) Collins Also do some research on the down jones sustainability index. Please also note that the companies profiled in "good to great" have all had bad years since they were profiled, so it only goes to prove that you can't be perfect all of the time.

Not to get into a major "whip it out" contest, I will avoid going into qualifications and simplistic examples. I did read in your reply that you do agree with me, and leave it at that.

In the drive to increase cashflow and profit margins the Auto company's cut the ablity to sustain quality products.

If you want to discuss the drivers I am more then happy to. Trying to blaim Lutz for this or Wagner is just looking for a Scape Goat. Shouldn't we all really be going after the head of AIG? A service provider..........

I agree with you. Just felt like you threw all MBA's under the bus, which is not entirely deserving.

I was just miffed this morning when I saw this man on TV @ 6:30 eastern be very indignant about having to answer questions about his company and product mix. That's basically it.

And I don't disagree with you about AIG as well, I just haven't seen the same level of shamefulness from them(not saying it isn't there, just haven't seen it)

I think that the main problem with GM is that they have basicly made crap for the last 35 or 40 years. Sure, there are a couple kinda cool cars (grand national, turbo trans am, impala ss, ls1 camaro, solstice/sky) but they mostly have made big trucks and crappy rental cars. Yes, other things have contributed to the problms they have now, but the complete lack of any products worth buying (except a solstice if you are loking for a new autocross car, i cant see one for a daily driver though), is the reason why GM is in the worst shape of any auto company right now./

Since I have been living the congressional hearings, and have been watching the "show". Personally I think it was great to have Lutz be a little pissy! Dodd, Shelby and Frank who's lover I believe is the President of AIG, all got us here during their watch of the banking commitee and helped all of their buddies during the bailout. With no questions asked!! Now they want to hang this on the auto industry.......we need some new management in congress

If the guy is in DC begging for my tax dollars he better be penitent. If not, I'll see you in bankruptcy court.

I kid you not. I came out the Food Lion one day and saw a guy in shorts a t-shirt leaning against the hood of a Lexus with his arms crossed. He practically stared me down as I came out and then said "Got a dollar?" Evidently he'd been out there begging dollars for about 20 minutes. I was floored. I turned away in disgust and he then yells "Hey! F U!" Kids and mothers were walking out behind me. Come to think of it...I think his shirt had "Bob Lutz" stitched on the front!

• True story except for the Bob Lutz part.

I think Lutz is the best thing GM has going for them. GM has made mistakes, but their current lineup is excellent, except for having a true competitor for the Prius/Fit (they did as good as they could with the Aveo, though). If it wasn't for Lutz, I think GM would have been considering Chap 11 a couple years ago.

I wish Maximum Bob were in DC last week to counter a few of the lame suggestions/comments made by our elected officials. But he would have just pissed a few of them off.

wow, its been a while since I have been to a food lion

If we give GM 8 Billion it would shockingly cover their losses in the mortgage market...

http://www.iht.com/articles/2008/05/08/business/norris09.php

This whole thing makes me ill.

Can I help throw all the MBA's under the bus? We'll get Wally to drive. If we use a WVO powered bus, it will even be "green."

This is a very complicated problem, and not limited to the car biz. A good insite as to what has happened to our corporations can be seen in the soon-to-be-former Governor of Illinois. He was trying to get his wife on the board of some coporations at $150K/yr in exchange for political favors or a Senatorship or something. What makes her qualified to oversee a corporation, other than being married to a typical poliitcal crook? Her "guidance" would have done nothing but add to whatever poor corporation she got stuck on's demise. What if it had been GM? She could have pushed for The Homer to be produced and they'd have done it. Now, that governor got busted, but how many others are out there in corporate world now that didn't? Why was Hillary on the board of Wally World? How did that happen? Basically, what it looks like is the BoD's have been seeded with corrupt politicians, and that has pushed down to the thieving philosophy that has brought down our economy. Golden parachutes of $2 million dollars to fire the VP of HR in a little company, etc.

As for the auto industry, the bailout is coming. It is just what and when. Sure, they deserve to go down in flames, but really, I don't think the US can afford it right now. It would be cheaper for all of us to just loan (and I say LOAN) them the money now and institute a cultural change so that we don't get stuck here again for a while.