Bye-Bye Bob: Lutz with GM CEO Rick Wagoner

General Motors is in a race for survival, with every day bringing news about the drastic steps it has to take. Rick Wagoner faces the toughest job any corporate leader has ever had to face. Even if he succeeds in saving the company, he’ll still be remembered as the CEO in charge as GM slipped from its 75-plus year perch as the world’s largest automaker.

Federal loans will buy GM some time and next week the company has show Uncle Sam a restructuring plan for how it will get itself back in the black. It has to do so while also revealing how GM intends to meet the higher fuel efficiency requirements that ramp up to a 35 mile per gallon fleet average by 2020. Every penny counts and then some. So if any company has to rethink its product planning with cost efficiency and fuel efficiency both in mind, it’s GM.

Each week, however, seems to paint a bleaker picture, including upcoming new layoffs of 10,000 at GM. That follows on the news that the company’s storied Vice Chairman, Bob Lutz, will soon step down from his role heading up product development as he looks forward to retirement by year end.

Lutz has added pizzazz to GM’s product lineup, with eye-openers such as the Pontiac Solstice, last year’s car-of-the-year Chevy Malibu and — with stated symbolism for the company’s future — the Chevy Volt concept. Lutz himself, an unapologetic skeptic of man-made global warming, has been the Volt’s biggest booster, including a bold and hilarious turn on The Colbert Report, proving that you don’t have to be a believer to deliver a good pitch.

One can only hope that Mr. Lutz has left a lot more affordable, efficient cars and trucks “for every purse and purpose” in the company’s near-term cycle plan, because it’s such products that are needed more than any. GM has been holding up the Volt as the centerpiece of the company’s future, even though it’s still an unproven, costly-for-the-foreseeable-future approach whose positive cash flow contributions are years away.

The biggest part of GM’s sales collapse has been trucks, particularly SUVs. GM’s sport utility sales collapsed by over 50% from their levels of just a few years ago. A halving of volume, along with share slides in other segments as well, hit a company that was already working through a need to downsize and relieve itself of a legacy cost structure that would have been impossible to maintain even in a stable market.

It’s such light truck products that GM desperately needs to replenish with updated, more efficient options. Some are in the pipeline, like the 2010 Chevy Equinox that is aiming for a 25% gain in highway mileage. The new 2.4L liter direct-injection engine to be featured in that vehicle is technology that does make clear sense for helping the near-term lineup. Both that engine and others (such as a new direct-injection V6 as well) coming out of GM Powertrain, as well as improved models in the middle reaches of both car and truck lineups, are crucial for regaining customers over the next few years.

Perhaps for what it brings by way of public relations redemption, the Chevy Volt may be worth the cost. But it is back to basics — and to neglected priorities for affordable efficiency — if there’s to be any hope for a lasting Bob Lutz legacy and for Rick Wagoner to be remembered as GM’s savior rather the last emperor of a dying empire.