"Why stop?" askes 77-year-old Bob Lutz, who has signed on for another stint with General Motors, this time running the automaker's marketing operations. But he cautions he has just six months to prove he's up to that task.
Move or get out of the way. That seems to be the mantra for Bob Lutz, the 77-year-old General Motors Vice Chairman who was planning to retire as head of product development, but has “re-upped” with the post-bankruptcy automaker as the new global boss of marketing.
GM has some serious challenges ahead of it, Lutz tells TheDetroitBureau.com, including a “reputation lag” with potential buyers who, he admits, often think that “if you want decent cars, you want to turn the Germans or Japanese.”
While there is plenty of evidence that the situation is changing – and quickly – Lutz says it is difficult to get the message out in a fractured media world. So the automaker will have to move with a similar level of haste, using “the social media, the Internet, You Tube and such.”
“If six months from now, things aren’t really different,” in terms of the way GM communicates with the market, says the former Marine pilot, “then I will have failed. I might not become the first octogenarian automotive executive, after all.”
Lutz’s decision to un-retire was something of a surprise. The executive previously told TheDetroitBureau.com that he would step down from his product development post, which he took in 2001, because he feared it would take at least five years to fix GM’s problems and didn’t have the will to weather its “grinding problems.”
But the new, post-bankruptcy GM, he contends, is as lean and efficient as its toughest competitors, “a dream company” that he just wanted to be a part of, especially when approached about staying by CEO Fritz Henderson and new Chairman Edward Whitacre, Jr.
Whether Lutz will continue to play a role in product development is unclear. He was formally replaced by GM veteran Tom Stephens, but there seems little doubt the elder executive will continue to provide plenty of input, though he will have lots to keep him busy on the marketing side.
Indeed, when Lutz received his MBA, GM had a relatively easy time of it. Simply sponsoring crooner Dinah Shore’s variety show ensured reaching 20 to 30 million Americans each week. “Nowadays, with 100s of channels,” says Lutz, “it’s difficult where to put that TV ad, especially with TIVO. As you’re correctly leading me, the traditional model of advertising is on its way out.”
Recent studies show that as much as 85% of the American car buying public goes online during some part of the purchase process. GM’s largest division, Chevrolet, has already diverted a large portion of its ad and marketing dollars to the web, Chevy General Manager Ed Peper told TheDetroitBureau.com, earlier this week, and the shift is continuing.
At least three GM divisions – Chevrolet, Buick and GMC – expect to participate in a planned venture with eBay Motors, the auto arm of the popular auction site. Starting in California, potential buyers will be able to bid on GM products, or accept an immediate “Buy Now” price, similar to the way eBay auctions off toys, electronics and memorabilia.
But Lutz cautions that GM does not expect to move to a factory-direct online sales model. Even after rewriting its dealer contracts under bankruptcy protection, he explains, “With the franchise laws still in effect, you cannot sell cars directly on the Internet. A dealer always has to deliver the car and take any trade-in. So, the idea of directory factory-to-you sales won’t work. It’s illegal.”
In a wide-ranging discussion, Lutz noted that GM’s new, more global approach to business should not only help grow sales in places like Europe, Russia and the Middle East, but at home, as well.
Buick, in particular, should benefit from the fact that while the brand is a weak sister in the U.S., it’s a best-seller in China.
“As for Buick, it will be able to get models that, were it only for the volume of sales in the U.S., would not be justified,” noted Lutz, “such as the new compact Buick we’re planning to do, two segments down from the LaCrosse. In a way, Buick’s enormous success in China allows us to do things for Buick in the U.S.”
The executive stressed that the importance of the home market won’t completely diminish. And that means a recovery in the American market will be crucial. “If this industry remains at 9.8 million, (sales annually), I want to be absolutely clear even for the new GM, that would be breakeven, at best. The U.S. market just has to recover.”
While GM is forecasting its market share will dip from the current 20% to somewhere around 18%, once it completely shuts down or sells off Hummer, Saab, Saturn and Pontiac, Lutz insists there is an opportunity to regain share as a “reward” for delivering the right products to market. “As long as we do vehicles that are superior to the competition, we will, over time, gain share.”
And if he can convince buyers to consider those vehicles, don’t expect to see him leave any time soon, he hints, suggesting that as long as he’s physically and mentally up to the job, “Why stop?”