GM Vehicle Design System To Be Lutz-ized

DETROIT, Jan 24 Reuters reported that General Motors Corp.is expected to announce as early as next week that it will radically restructure its vehicle design process, cutting as many as 400 jobs and trimming its notorious bureaucracy to speed up the development of new cars and trucks.

Former Chrysler executive Bob Lutz, hired in August to add zip to GM's lineup, will scrap the GM process that he says took him months to understand in favor of a system that closely resembles Chrysler, sources familiar with the plans said.

The new, more efficient organization will include about 800 people, down from about 1,200 currently, they said.

The report stated that some of the affected workers could be shifted into other parts of the company, with others offered early retirement incentives GM announced earlier this month. The world's largest automaker is trying to cut white-collar and contract jobs by about 5,700, or about 10 percent in North America, this year.

GM officials said the new design process is meant to hasten development of new vehicles and give designers more freedom to make great looking products. They also hope to prevent another debacle like the Pontiac Aztek, the boxy-looking sport utility that vehicle that missed sales targets after its launch in 2000 and has been ridiculed for its odd shape.

``The effort here is not to cut costs. The effort is to cut redundancy,'' one GM official said. ``It looks very Chrysler-like.''

As an example of how the new process might free designers, GM rolled out the Pontiac Solstice two-seat convertible at the Detroit auto show this year. The Solstice went from a sketch to a rolling model in less than four months.

Lutz came up with the idea for the Solstice, then pushed it through the system with far fewer people working on it than most concept vehicles. The sleek-looking car won the AutoWeek magazine award for ``Best in Show''.

A GM spokesman said the automaker has completed an internal study that Lutz ordered, looking to streamline the vehicle design process. But spokesman Tom Kowaleski declined to comment on the results. ``We're not ready to talk about any action yet,'' he said.

Some GM officials said Mark Hogan, currently head of GM's Internet business unit e-GM, could oversee part of the new vehicle design organization.

GM officials described the current vehicle production process as excessively long, with designers and engineers duplicating efforts as a car or truck moves from concept to production. The complicated process also makes it practically impossible to make late changes to a vehicle's design, they added.

``Our process has been so sequential that by the time we've gotten a final product into the product clinics and found out it's not doing so well, it was really too late to change,'' Lutz, now vice chairman with GM, told Wall Street analysts earlier this month.

Under Lutz, Chrysler earned a strong reputation in the 1990s for bringing out great-looking vehicles quickly and at a low cost, while targeting emerging niches in the market. Chrysler's innovation was the envy of the industry, and eventually led to its acquisition by Germany's Daimler-Benz.

Lutz's expertise and reputation as the ultimate 'car guy' led to his hiring at GM in August. Since arriving at GM, the 69-year old Lutz has spent $1,500 to print up 3,000 ``Sez Who?'' stickers for use whenever he is confronted by GM'S sometimes confusing bureaucracy.

Critics have said GM relied too heavily on market research, often resulting in bland vehicles that elicit little emotion from customers.

``The wrong way (to do market research) is to sift through endless market research data before you have the big idea that eventually becomes the vehicle,'' Lutz said during a luncheon speech earlier this month. ``It's called putting the big idea together by sweeping up all the little crumbs.''

GM's new product-development process will scrap several existing groups, officials said. Gone will be the Advanced Portfolio Exploration (APEX) center, a small number of designers and analysts who track societal trends to develop new and sometimes outlandish ideas for transportation.

Currently, seven brand character centers design cars and trucks for each division, such as Chevrolet, Cadillac and Buick. The new system will pit three design teams against each other to come up with the best design.

``We'll research those three, select the winner, hone it, and adapt things off of some of the other themes,'' he said.

The new system will elevate the importance of designers while de-emphasizing brand managers, reversing the controversial position put in place by former GM Chairman and Procter & Gamble executive John Smale in the 1990s to give each vehicle a distinct image.

Critics said Smale's brand-management philosophy wasted millions of dollars on advertising for individual vehicles rather than a division such as Chevrolet, and elevated marketing executives who knew little about cars.