Th never-ending story… (the cover of GM’s 2006 annual report)
When Bob Lutz’s book “Car Guys vs Bean Counters: The Battle For The Soul Of American Business” first came out, my review was somewhat distracted by the fact that Maximum Bob had name-checked me in it (or misrepresented a NY Times Op-Ed of mine, depending on how you look at it). Still, the book’s basic problem was all-too familiar in the world of auto executive coverage: the benefits of insider insight were strongly counterbalanced by objectivity problems. I noted
…though the title sets up an internal conflict within GM, Lutz spends so much space blaming outsiders for GM’s woes that, by a third of the way through, it begins to feel more like apologia than clear-eyed soul-searching…
…In what is likely part insightful truth and part gentlemanly whitewash, Lutz frames his battle as being not with any one “bean counter” but a faceless (and therefore, blameless) culture in which management-by-the-numbers outweighed personal accountability. Lutz identifies individual “true believers” who he recruited in his design and product-led transformation of The General, but essentially absolves the thousands of others, including then-CEO Rick Wagoner, of any responsibility for GM’s continued decline and eventual collapse.
Lutz’s narrative of post-2001 GM history, in which he led a comeback of “car guy” talent against the decades-long rule of the “Bean Counters”, has been on my mind quite a bit in recent weeks, as GM’s decade-old dirty laundry has been piled into the public’s lap. Already, Congress’s investigation has made it clear that GM rejected fixes to now-recalled ignitions for “business case” considerations, making the ignition scandal a fatal case of “bean counting” that occurred on Lutz’s watch. In light of recent revelations, Lutz’s claim to have been GM’s champion of product quality in a “Battle For The Soul of American Business” deserves another skeptical look.
As indicated elsewhere at Daily Kanban, Lutz’s book is critical to the public’s understanding of GM’s inner workings from 2001 until bankruptcy in 2009, and provides more than a few relevant insights into the GM in which ignition and steering safety problems appear to have been buried. Having introduced the position of Vehicle Line Executive, or VLE, which headed development of each new model and signed of on all cost-related decisions, Lutz notes:
So this was the environment in which our VLEs operated. Speed, speed, speed. Things had to be right the first time; going back for a redo would blow the timing.
But as Lutz got more detailed in his criticism of the GM process, he limited his focus to design. Still, the underlying logic seems to reflect the emerging picture in the ignition case, with terrifying implications:
…lackluster designs had all gone through product clinics and they had all failed. But a complete redo would have been too time consuming, so it became a matter of “Can we quickly fix the part they hated the most without blowing the timing?”
For Lutz the lesson was clear: he had to “wrest control of Design from VLEs.” Because VLEs were not trustworthy judges of design, Lutz believed they had become over-reliant on “quantified objectives” which he listed as:
cost (good!), investment, quality, warranty cost, assembly hours per vehicle (believed to be the secret to Toyota’s success), and important to note, time to program execution. Saddled with a reputation for endlessly delayed programs, GM’s senior management had really focused on speed of execution.
Lutz’s appropriately subjective argument was that “designers are artists and artists are gentle souls,” in need of Lutz’s forceful advocacy in a clearly broken GM development process. What never appears to have occurred to Lutz is that the “product excellence” he was championing was about more than styling. Wedded to his stricture that there are no unmet consumer needs in the US auto market, Lutz’s vision of quality was limited to “turn-ons” that would “surprise and delight.” This deep-seeded belief was front and center in his previous book, “Guts,” in which Lutz enthused:
Given two extremes- “zero defects with no delight” and “delight with a few squeaks in it”- the public will always buy the latter.
Let’s give Lutz some credit: the vehicles that GM has produced since 2001 have consistently improved in terms of the appearance and subjective qualities Lutz sought to improve. But as one reviews the reams of Bob Lutz’s writings and quotes, it’s impossible to ignore the reality that every example Lutz gives of his “car guy” revolution reveals it was merely skin deep. His initial job title upon returning to GM, Vice Chairman for Product Marketing, was deeply prophetic; it might as well have been Chief Lipstick Application Officer, Pig Division.
On the product development side, the record is clear: Cobalt development was led by VLE Lori Queen with a “mandate” from Bob Lutz to build “a world class small car.” Clearly the engineers Altman and DeGiorgio are receiving the bulk of the attention, but not much has been heard about the matter from GM’s purchasing executives. Fascinatingly, a 2007 interview from GM’s then-Chief Purchasing Officer (now AVTOVAZ CEO) Bo Andersson hits the same theme as Lutz: “hard metrics” were being met in terms of supplier relations while “soft metrics” were not. Like Lutz, Andersson found subjectivity a convenient trope for a turnaround narrative that had little observable basis.
But the most interesting revelation from Andersson’s interview was a direct repudiation of Bob Lutz’s entire “Car Guys vs Bean Counters” narrative: though Lutz may have privileged styling in his reforms, engineering and purchasing were actually forced together under Lutz’s friend and fellow former military aviator, Jim Queen. Andersson noted:
Jim Queen, our global head of engineering, and I got our jobs at the same time and one of the things we decided six years ago was to work together, be honest, help each other out. We have common objectives, common metrics, and our teams of engineers and purchasing people meet every Tuesday to review all the data. We really encourage our suppliers to link their engineering and purchasing together, too, to take down the barriers between the functions.
Queen and Andersson both got their jobs in 2001, the year Lutz came on as Vice Chairman. Though Lutz himself was unlikely to have been responsible for the arrangement, it’s more than a little ironic that Lutz’s tenure at GM coincided with such deep cooperation between GM’s engineering (car guy) and purchasing (bean counter) factions. Far from leading a “car guy revolution,” Lutz simply demanded nicer interiors and flashier designs while engineering and purchasing continued to entwine closer and closer.
The dark reality of Lutz’s “product excellence” crusade reads increasingly like dark satire: a blowhard executive noisily advocates more development money be spent on styling, while fixes to a deadly defect were rejected for lack of a business case. Though improved styling and interiors may have helped the critical reception of GM’s cars, it’s becoming increasingly clear that Lutz’s push for “product excellence” was skin deep at best… and the facade is already crumbling.
