The U.S. car industry's downfall: Putting numbers before design

Kai Ryssdal: If you're a car guy or a car girl, chances are pretty good you've heard of Bob Lutz. He's arguably the car guy. Over the past 47 years, he's worked for Ford, BMW and Chrysler. He was the vice chairman of General Motors from 2001 'til last year. Bob Lutz's got more than a few things to say about how American carmakers came to find themselves in their present predicament -- and he says 'em in his new book Car Guys vs. Bean Counters. Bob Lutz, good to have you with us.

Bob Lutz: Good to be here. Thanks.

Ryssdal: So I'm going to read you back to yourself just to get us going here, playing off on that line about car guys vs. bean counters. And here's what you have to say about the bean counters: "It's time to stop," you say, "The dominance of the number crunchers living in their perfect, predictable, financially-projected world who fail time and again. And give the reins to the product guys of either gender, those with vision and passion for the customers and their product or service." So that would be you, right, the product guy with the passion?

Lutz: Well, first of all, let me say you almost should have done the audio version.

Ryssdal: Well, thank you.

Lutz: But I don't necessarily place myself on the hero list. But it is true that giving the customer the absolute finest automobile that General Motors could possibly produce has proven to be the correct approach to the automobile business because this finance-generated effort to skimp and see how much cost can we strip out before people actually protest, I think is something that's taught in the business schools and it has been extremely damaging to American business -- and it doesn't have to be that way.

Ryssdal: Well let's explain how you would like it to be and the way, really, that you think it ought to be -- certainly in cars, anyway. You stress in this book the importance of design and the downfall, you say, of the American automobile industry has been putting design as an afterthought to those numbers guys.

Lutz: Yeah, because that's all part of the rational approach, where the vehicle was more or less defined by numbers: interior dimensions, luggage compartment dimensions, its overall length, etc. It was then handed over to design and design was basically told to put a wrapper around it.

Ryssdal: Well, what happened then in Detroit where nobody, except maybe you, seemed to realize this?

Lutz: Well, what happened is I'm really kind of a holdover from the '60s. When the place was basically run by the product enthusiasts, people like Harley Earl, after him Bill Mitchell -- these were designers who were on the covers of magazines and finance was counting the money. And then the scientific management took over. And of course, for a while the company lived off momentum. But the gist was just not enough focus on the vehicle itself.

Ryssdal: So all of that said, for your obvious passion for the subject, for your experience, for your successes which we have to grant you, how come the identifying line above your name on the title of this book says, "former vice chairman of General Motors" instead of "former CEO of General Motors?"

Lutz: This is the downside of being a creative person who does not play the political game too well. If I had,for instance, been a little bit more circumspect in my dealings with Lee Iacocca and perhaps had held my mouth, I might well have been his successor at Chrysler Corporation.

Ryssdal: Seems kind of an easy answer: You shot your mouth too much.

Lutz: I tend to be a person, when I don't know something I say, "I don't know, I'll have to look it up." I think boards like a CEO who is totally buttoned up, has all the figures. People with my personality generally don't make CEO.

Ryssdal: Bob Lutz, former vice chairman of General Motors. He's got a new book out about that company and the car industry and American business writ large. It's called Car Guys vs. Bean Counters. Bob Lutz, thanks a lot for your time.

Lutz: Hey, thanks very much for having me. I appreciate it.


Ryssdal: I stopped by a GM dealership while I was in China last week, where the company makes way more money than it does here. There's a slideshow -- including the part where they try to sell me two cars -- see it here.

About the author

Kai Ryssdal is the host and senior editor of Marketplace, public radio’s program on business and the economy.

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