MONTEREY, Calif. — It's a litany of woes.
Wall Street analysts say Detroit automakers are dinosaurs, import brands continue nibbling away at market share, and for the last two years it has seemed impossible to sell domestic cars without huge rebates.
But Robert Lutz is unfazed.
General Motors Corp.'s 71-year-old vice chairman and product guru, brought back two years ago as a kind of savior, simply smiles and shakes his white-capped head in bemusement.
Although GM's U.S. market share has fallen from 48% in the 1950s to 28% today, the company -- along with rivals Ford Motor Co. and DaimlerChrysler's U.S.-based Chrysler Group -- "is going to come back," he insists.
"We can already feel it. The thought of one of the Big Three getting in serious financial difficulty to the extent of Chapter 11 is just ludicrous."
Lutz was brought back because of his reputation as the consummate "car guy" to pump new life into a creative staff worn down by a miscast management corps that knew more about convenience goods than cars.
And today, he says, GM's spirit is back.
From designers to engineers, most hail Lutz as an executive who understands the need for individuality. Lutz preaches that not only is it OK to question authority, it is necessary.
"I'm reborn since he came here," says Jim Queen, GM's vice president in charge of North American engineering operations.
Lutz was on the Monterey Peninsula last weekend to attend events such as the three-day Monterey Historic Car Races.
Question: There's been a lot of talk about "the Lutz effect" on GM products. We know that it begins with some of the 2006 models, but just what is it? What is Bob Lutz bringing to the game?
Answer: It's gradual and some of it is being seen already in the concept cars we've shown in the last two years. They reflect my encouragement to people to try new things and to stretch aesthetically. I think the result is the empowerment of the creative people in the company.
Q: Toyota is nibbling at your heels. How do you feel about that?
A: We may become at some future date No. 2 worldwide and there may be people in GM who have been there all their lives who will almost have a heart attack, but I tend to be on the 'so what' end of the scale on that one.
Q: Where is car design headed?
A: When people ask what's the next big design trend, I say there isn't any. There are a number of ways to go. Look at the Hummer H2, which is an enormously successful design yet is basically [shaped like] a brick. Whatever you do, it's got to have stopping power and it's got to cause people to say, "Wow! Are you really gonna do that?"
Q: One of the studios you have competing is the North American advanced design studio in North Hollywood, under Frank Saucedo. How important a part of the company is it?
A: There is no major project where Frank's group doesn't submit at least one proposal, and a lot of times it's that proposal that gets picked up. The real advantage of California isn't that it's warm and sunny and has great roads. It's that here the trends are set, and that here creative people are surrounded by the real world. They are constantly in traffic with a huge slew of import cars, whereas in Detroit we're in a dream world where you go outside the building and all you see is American cars and trucks. It's a fool's paradise.
Q: You are getting rid of one model that many have suggested should never have sneaked through -- the Pontiac Aztek. It was designed before you came back to GM, but tell us how a vehicle like that happened.
A: I actually think that it happened for the right reasons, which were to do something funky, different and attract people who are not primarily drawn to pretty design. The only problem is that Pontiac did not have the brand strength to carry it off. And that has been an important lesson for many of the people inside GM. They say, 'Wait a minute, we did the Aztek and everybody hated it. Honda does the Element and everybody loves it, and the Element is uglier than the Aztek.' And I say, 'You're absolutely right. If Aztek had come out with a Honda grille and Honda badges it would have been perfectly all right.'
Q: You really think so?
A: Yes. Absolutely. And that's a lesson that people who are outside of the creative process have a tough time understanding -- how important the notion of brand is to some people in evaluating a vehicle.
Q: But one of the big criticisms about GM for years, one of the reasons you were recruited, is that it was too brand-oriented.
A: It was superficially brand-oriented. It was grilles, badges, advertising direction, but there wasn't sufficient character differentiation in the automobiles, and that's what we are getting back to.
Q: California is a critical market and GM does well here in the truck segments, but not nearly so well in car sales.
A: That had occurred to us.
Q: So what's the goal?