Sat June 11, 2011
Bob Lutz has a new book out, here is the first excerpt.
Lutz has worked at BMW, Chrysler and GM. He is the real deal, a real car guy like Zora Arkus Dontov of Corvette fame or Enzo Ferrari or female Jean Jennings at Automobilemag.com or Piech at Audi or stylist Boyd Coddington of Hot Rod fame.
The idea of an MBA is to produce a well rounded individual who can be successful across multiple industries. That's fine if you are going to sell oh say toothpaste or paper towels or refrigerators. As LJK Setwright observed in Car and Driver years ago,
There is no Refrigerator Monthly.
His point was that modern chariots inspire passionate followings among their owners in a way that the Frigidaire 'keeping the beer cold' never does.
In this article Lutz talks about what it takes to get things done right. I think the word is passion as he describes working with mid level techs and designers on Friday afternoon about the details. As he points out the cost of a 3 series BMW is about the same as the actual cost of a Chevy Malibu but gee one is the Ultimate Driving Machine, the other scoots the kids to pizza after the soccer game. Hmm, ultimate pizza go getter machine perhaps?
At any rate this is a good article for the cost class. We are discussing Deming and Total Quality Management. TQM is not about design creation but adherence to a standard. GM strayed from their design standards, began hiring Proctor and Gamble execs and next thing you knew, sure enough, the cars had all the appeal of a tube of toothpaste.
Please read this article. I am thinking it could serve as the base for a writing assignment on inspired design. Would Ralph Lauren be RL without Ralph? Would Virgin Atlantic be what it is without
Richard Branson? Will Apple stay Apple without Steve Jobs? There are lots of directors but only a handful of Speilbergs, Howard Hawks, John Huston, Martin Scorcese or Kevin Costners. Alternatively as Eastwood observed who else did what John Wayne did?
Here is the second installment, Japan's Advantage and
How Cadillac Lost its Shine from Monday June 13
Lutz suggests in this interview, about 20 minutes but well worth it that
TQM goes too far. The Auto and movie business are irrational. As I suggest above there is no Refrigerator Monthly. Lutz is saying a refrigerator is a rational cost decision, a car is no so much the case, nor is a movie. As for TQM, someone has to make a decision, respecting opinion is nice but who's in charge here? This video is interesting in how the government regulations shaped the business. SUVs were exempted so Detroit made V-8 SUVs. He says the failure is lack of dedication to the product.
Interview Highlights in clude
An intense focus on excellence
Design build sell the world's best cars and trucks, not be the best corporate citizen.
Lutz notes that he was a macro guy, not a bean counter, note the deal with the devil in the interview his MBA is in marketing
Better cars, lower margins. Four problems for car industry
1. Govt Policy
2. Cost Focus
3. Too much union power
4. CAFE requirements, hostile media
Now style and execution are important
Interesting end to the interview about how the Toyota Prius was a mobil billboard for toyota, a great ad for green tech but GM did not do it as it lost money
He makes the point that there is too much emphasis on cost structure, the bean counters and indeed
Sam Barshop the owner of La Qinta Inns said the same thing to us, too much short term orientation
I recall Caroll Shelby's obit on Enzo Ferrari, Enzo got to run his own car company, no board of directors, no shareholders, and got to do just what he wanted
Lutz likens Jobs at Apple to that sort of idea, an autocratic leader, this gets back to my idea that great companies tend to be run by visionaries, Ralph Lauren, Steve Jobs, but then a lot of them are really awful to work for and I would put Steve Jobs at the top of the list along with folks like George Patton
Finally a pitch for American manufacturing
Professor Elam 
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