Bob Lutz Car Guys vs bean counters by Bob Lutz

The battle for the soul of American Business

Bob Lutz is a man in high regard. He was the President of Ford Europe in 1979, was CEO of Exide Technologies, the world’s largest producer of lead-acid batteries in 2001. At that time he was asked by the President and CEO of General Motors to join with the company as Vice Chairman of Production. He was 70 at the time. He agreed and stayed for 9 years. His charge was to make great cars again. In this he was successful.
There are a number of important issues worth knowing that he writes about. On page 25 he states that in the 70’s the US State Department decided that special measures were called for to keep Japan in the US orbit. To achieve this goal Japan was allowed to manipulate their currency (the Yen) to a level below that justified. This gave Japan an edge over US manufacturers. (Kind of reminds me of how we have allowed China to keep the value of their currency (the Yuan) below its true value.
On page 33 he spells out the tremendous growth of health care cost and the explosion of law suits with devastating results. Beginning on page 168 he points out the obvious effect of the housing debacle, where unqualified people were given mortgages they were unable to pay. One result was rapidly rising fuel costs which was devastating, in particular, to GM as the bulk of their product line were gas guzzlers like GMC trucks and Hummers. Interesting to me is that he believes as I do that gas prices should be higher equivalent to Europe. The problem as he and I see it is that cost is in the control of OPEC. Because of that prices surge and fall rapidly. Should the gas tax increase at a predictable rate the incentive to produce fuel efficient vehicles would increase without government decrees. The market place would be in control. The extra funds raised could be used to improve transportation facilities i.e. bridges, roads, rail and air. Think of the good paying jobs created.
The above I included as I felt the subjects were important but the theme of the book is how Mr. Lutz was able to decrease the power of the bean counters and place emphasis on building superior vehicles which the public would want to buy. In this he was successful. You will need to read the book to find out how he got the job done.

Jack B. Walters
September 24, 2011