GM’s Bob Lutz talks about the Solstice, sales and things GM
Like it or not, Bob Lutz is connected to the Pontiac Solstice. The roadster he made happen, the car he chose to drive out onto the Show floor at the 2001 North American International Auto Show will, at least as an icon, define the experience of Lutz at GM.That Lutz impact - product first, aggressively so -- has already been felt in the arena of halo cars and small margin vehicles that are sure to make an impression on the public. Not clear, however, is how Lutz will fare when it comes to the foot soldiers, the cars assigned to gain profit and beat the Accords, Civics and Camrys of the world. "I would like to see General Motors enormously profitable, back over 30% share for North America and worldwide pulling away from Toyota. If I could be present when all of that is achieved, I'd consider myself worthy of retirement," Lutz says. In order to do that, however, Lutz feels that the toughest hurdle is perception. "The American public believes that American vehicles don't have the same quality level as that of the Japanese and European vehicles. Convincing them that those bad old days are over is the major hurdle. Getting people to consider us again is just going to be difficult," says Lutz. "They see no reason to switch back to an American car when they have perfectly reliable Toyotas or Hondas that they like."
According to Lutz, the road back starts with compelling cars that have high value. "The only way we can do it is to produce really compelling cars and offer them at high value. That means creating new, exciting vehicles. But it also means buying back brand equity by putting massive amounts of money behind each brand, meaning rebates, interest rate deals, expensive marketing like overnight test drives. That means sacrificing unit profits by somewhat underpricing them to entice people back to GM.It's more important to sell cars and gain market share than to reap higher margins per unit," Lutz explains. "If we could sell out a new Buick like LaCrosse, (the new replacement for the old Century and Regal coming this Fall) with no incentives and take a $2,000 lower margin on the car but in exchange for that lower margin sell out the plant, that would be a really good deal. We'd take that one in a heartbeat." "Most renowned professors of marketing will tell you that when a brand starts going downhill it's a terminal situation and you should not pour money into that brand anymore because there's no way that you can turn it around. The buzz is gone and the generation that bought it is gone," says Lutz. "But automobiles are a highly visible product.Everyone is interested in the new stuff so no matter how dented your image may be, if you do a truly sensational car, people will notice it and say, 'Holy Mackerel, if they ever built that Pontiac Solstice, I might buy one.' Once you open their mind to one vehicle in the brand, it means you've opened their minds to the whole brand."
Lutz worked out his comeback strategy at Chrysler with the Dodge Viper. He saw guys who started out buying a Viper totally rejecting Dodge as a brand. "They never wanted anything to do with a Dodge, but they wanted a Viper. Once they had the Viper they got to know the dealer, they'd show up at the dealership and say - hey -- this is pretty nice…An iconic vehicle shocks people into a new awareness of a brand. The problem with Oldsmobile is that we never had the shock iconic vehicle. We just started doing better and better Oldsmobiles and that really didn't work." Before Lutz, GM executives had worked to make GM a leaner company--one that could respond faster to the marketplace. The frozen middle-obstructionist managers who resisted new processes--were cut or eliminated. Global architectures-formerly called platforms--like Epsilon and Kappa were created to streamline engineering and production and make the same underpinnings that could work for different global markets. Since then, GM has been churning with one goal in mind-win back customers. Cadillac is turning out first-rate vehicles like the SRX sport utility, the XLR roadster and the CTS-V. The STS, the new rear-drive sedan coming this fall is a serious test to see if Cadillac is ready to take on the mainstream Mercedes and BMW vehicles. "If the STS doesn't make it, says Lutz, "that would be a serious setback. But the car is already getting terrific reception from the dealers and the press."
The Pontiac Solstice, built on the Kappa architecture and the Pontiac G6, built on the global Epsilon architecture, will be out soon. The Australian-built Pontiac GTO is on sale now.. Buick will get the same investment and barrage of cool product like Cadillac. The gorgeous Velite convertible is a concept that will be built. Chevrolet, too, has the small Cobalt coming in the fall and the Colorado pickup, on sale now, as well as the Malibu and its hatchback, the Maxx. "Saturn is going to be another big challenge for us--that is, making Saturn cool again," he remarks. "We know how to do that," Lutz says.Making cars cool is a snap for Lutz, of course. From the Solstice to the helicopters and planes he loves to fly and an estate to maintain, the former Marine fighter pilot is hoping to ride the cool touch that brought the Solstice to life right into the hearts and minds of the American public. And, while he's at it, he may just sell 'em a new Malibu.
When will the Solstice be available? The Solstice is slated to be a 2006 model, probably available late in 2005.Will GM continue to sell Buicks? Yes. The Velite, a concept based on the same platform as the Solstice, will probably be built. What is Bob Lutz best known for? Probably the development of the Dodge Viper, thought the Pontiac Solstice roadster has become a household name since it's debut in 2001 as a concept.
According to Lutz, the road back starts with compelling cars that have high value. "The only way we can do it is to produce really compelling cars and offer them at high value. That means creating new, exciting vehicles. But it also means buying back brand equity by putting massive amounts of money behind each brand, meaning rebates, interest rate deals, expensive marketing like overnight test drives. That means sacrificing unit profits by somewhat underpricing them to entice people back to GM."Lutz has started the transformation at Pontiac - first, with the GTO, the G6, and then with the Solstice - a sub-$20,000 roadster that has received rave reviews.