Detroit Auto Show: GM Shows "Lutzed" Concepts

Detroit January 5, 2003; Joe Miller writing for Bloomberg reported General Motors Corp. Vice Chairman Bob Lutz, hired in 2001 to revamp the styling of the automaker's cars and trucks, unveiled five prototype vehicles as he tries to build on last year's U.S. market-share gain.

The vehicles are the first group of prototypes fully created under the 70-year-old former Chrysler Corp. president, whose contract General Motors today said will be extended by a year. They include the Buick Centieme, which blends sedan and sport-utility features, the Chevrolet Cheyenne pickup, the Chevrolet SS and Pontiac G6 sports sedans and a $250,000 Cadillac Sixteen car.

``With Lutz, they are taking some chances on design,'' said Jeff Schuster, an auto analyst at market researcher J.D. Power & Associates. ``It shows they are willing to step out of the GM shell, the generic look.''

The world's largest automaker's U.S. share rose to 28.4 percent last year from 28.1 percent a year earlier, according to Autodata Corp. General Motors' sales fell 0.9 percent, less than the 2 percent industrywide, as the Detroit-based automaker led in incentives such as no-interest loans. Market share declined at largest rivals Ford Motor Co. and DaimlerChrysler AG's Chrysler.

Creating more-popular vehicles might allow General Motors to cut back on loan discounts and cash rebates that reduce profit. General Motors' incentives averaged $3,814 per vehicle in December, the highest among automakers, according to CNW Marketing Research analyst Art Spinella. Increased profit would help the automaker reduce a pension-fund shortfall that the company estimated at as much as $23 billion last year.

The company's share price fell 23 percent in the past year.

Shapes of the Future

Analysts expect Lutz's prototypes, shown at the North American International Auto Show in Detroit as press previews began today, to influence the future look of General Motors' cars and trucks. Company executives have said the Cheyenne hints at the next version of the Chevrolet Silverado, General Motors' best-selling vehicle and a competitor to Ford's F-Series trucks in the 2.3 million-a-year market for full-size pickups.

Lutz, responsible for creating popular vehicles such as the PT Cruiser at Chrysler, has spearheaded General Motors' efforts to improve vehicle development by reorganizing its design and engineering staffs and searching for a successor to top designer Wayne Cherry, who plans to retire this year.

``I have to believe I make a difference because everyone tells me I do,'' Lutz said in an interview Friday at the Los Angeles auto show. ``I came in and I found an environment of highly motivated people who all instantly want to get the job done.''

Contract Extension

General Motors Chief Executive Officer Rick Wagoner in announcing the one-year contract extension for Lutz said the automaker is pleased with the job the vice chairman has done. Lutz was hired by the automaker in August 2001 and started work the next month under a three-year contract. Wagoner didn't disclose terms of the extension.

``We agreed formally for another year, but I suspect he'll stay longer than that,'' Wagoner said in an interview after a press conference at the Detroit show.

Lutz said one thing he did was restore the leadership of designers in developing prototype vehicles. ``There was a period at GM when the concept cars were mostly driven by marketing and then design was told, `do us one like this,''' he said.

``You'd like to see that their brand mission is being energized by his presence,'' said Doug Scott, an analyst at Allison-Fisher Inc. in Southfield, Michigan. ``You'd like to see some dramatic change that speaks to each brand's goal in the marketplace.''

Previous Problems

General Motors has had trouble in the past in creating popular production vehicles from its prototypes, said Scott, citing the Pontiac Aztek sport-utility. General Motors needs to move from the Lutz concept vehicles ``into production models without it becoming a `Son of Aztek' kind of thing,'' he said.

``All I know is we have given the responsibility back to design and taken extraneous voices out of the process so that it is now a very direct selection process between senior management and the advanced vehicle development group,'' Lutz said.

Efforts to design vehicles for younger buyers won't work well, he said. Some rivals, such as Toyota Motor Corp. with its Scion vehicles, are doing that.

Such efforts are ``an exercise in futility,'' Lutz said. ``You are not going to know what the 16- and 17-year-olds want and the minute you think you do and put out ads that say, `Hey kids, this is cool, trust me,' that's a guarantee that it's going to be a flop. They like the same stuff we do, they just can't afford it.''

Lutz said the one type of vehicle he hopes will catch on among U.S. consumers is the station wagon.

``We keep testing the station wagon and it keeps flopping,'' he said.