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GM's 'car czar' retires at critical time for automaker

autos Updated: Feb 15, 2009 10:47 IST
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General Motors is losing legendary global "car czar" Bob Lutz at a critical time for the US auto industry, which is facing a deepening economic downturn and has failed to stem a decades-long loss of market share to foreign rivals.

Lutz, 76, will step down from his current role as chair of global product development on April 1, a day after GM presents its final viability plan to the Treasury Department in exchange for 9.4 billion dollars in loans needed to save the automaker from bankruptcy.

His retirement is just the latest in a series of high-profile departures as the Detroit Three radically downsize their operations and struggle to stay afloat.

A former Marine pilot and the son of a Swiss banker, Lutz has spearheaded efforts to transform GM's moribund product development system.

But what happens with his departure is anyone's guess. Lutz himself has said that the real test for GM is whether it can keep the momentum going after he's gone.

Lutz, who will stay on in an advisory capacity until the end of the year, began his automotive career with GM 48 years ago.

He soon left for greener pastures -- and faster cars -- at BMW, then Ford Motor, then Chrysler before heading for battery maker Exide.

Having sold off a hefty stake in Chrysler when it was purchased by Germany's Daimler-Benz, Lutz seemed set to retire with his collection of exotic cars, helicopters and two fighter jets.

But in mid-2001, at the personal behest of GM CEO Rick Wagoner, he unexpectedly agreed to come out of retirement, in a bid to fix a moribund product development system Lutz himself had derided for producing "angry toasters," rather than competitive automobiles.

"You can't sell ugly cars," Lutz had said, only months earlier, after viewing some of GM's latest models.

In the seven-and-a-half years since, Lutz has fought vigorously to reform GM's system, which insiders and outsiders alike frequently derided as "bloated," "inefficient" and "out of touch with the market."

He has had mixed, but increasingly positive results.

Despite Lutz's claims that GM had come up with a BMW-killer, the last Pontiac Grand Prix was a flop.

The current Chevrolet Malibu, however, was honored as North American Car of the Year by a jury of 50 journalists in January 2008.

The Chevy Volt, an "extended-range electric vehicle" due to market in 2010 has earned GM extensive publicity and good will.

But even as GM expanded overseas, Lutz was unable to help the company maintain its share of the critical US market.

GM, which held the title of the world's largest automaker for 75 years, lost the crown last year to Toyota.

Only with a wave of new products, both in the US market and abroad, can GM hope to regain that lead, says analyst Joe Phillippi of AutoTrends Consulting.

In an interview shortly after joining GM, Lutz stressed that he could not be the one to turn things around for the troubled maker, which today needs a second tranche of federal loan money to survive.

"If all I do is come up with some good products but don't change the system, when I leave, then I will not have succeeded," Lutz explained.

There is little doubt that GM' product development system today is leaner, faster and more consumer-focused than it has been in decades, said independent auto analyst Dan Gorrell.

"Some of their products are now better than the best of the Japanese," Gorrell said. "But we'll have to see if Lutz has put in place the right people to continue after he's gone."