NFS4
No Lifer
Link courtesy of Autoblog:
http://www.miami.com/mld/miamiherald/sports/motorsports/14077943.htm
http://www.miami.com/mld/miamiherald/sports/motorsports/14077943.htm
SAINT JEAN CAP FERRAT, France -- It was a good two days for Robert Lutz, General Motors vice president for product development.
The automotive media applauded the Geneva International Motor Show introduction of one of GM's divisional concept cars, the sleek, all-methanol-powered Saab Aero X. And at this Mediterranean resort, sumptuously sandwiched between Nice and Monaco, Lutz presided over the launching of the Cadillac BLS, a small, European-market, entry-level luxury car designed to take on the likes of the BMW 3 Series and Mercedes-Benz C-Class sedans.
The GM that Lutz and company presented here did not look at all like the troubled GM of North America, which got a bit more bad news recently when Consumer Reports magazine announced that it had chosen no 2006 domestic models among its top runners in the vehicle reliability category.
That report stung, casting a pall over GM's European celebration. But it wasn't what was really bothering Lutz, one of the global auto industry's most blunt top executives.
''I can't believe that we were so stupid,'' Lutz said of GM. ``People talk about Toyota overtaking General Motors [in global sales], as if GM were one company. But the truth is that we had not been one company for decades. We were different companies, each doing its own thing with little regard for the other. How can you run a global company like that? You can't. It was stupid. No wonder Toyota was cleaning our clock.''
The separate-but-equal approach to financing, developing, designing and manufacturing divisional cars and trucks yielded equally mediocre vehicles, higher production costs, lower vehicle quality and legions of dissatisfied customers, Lutz said. But GM waited much too long to fix what needed fixing, he said.
''The problem was right there before us all along. It was so easy to see, once we decided to look. It's not rocket science,'' said Lutz.
But GM was ''too comfortable,'' he said. ``We were too much in the habit of looking at how individual divisions performed, as opposed to looking at how all of GM was performing.''
That corporate blindness caused GM to cheat itself, Lutz said. ``We were not leveraging our strength as a global company.''
None of this really amounts to a revelation. Other GM executives and legions of automotive industry analysts have made the same, or similar, complaints about the company for years. What is new, as evidenced by the Cadillac BLS -- which won't be sold in the United States -- and other new GM products, is that the company is taking steps to correct its errors.
Cadillac, for example, now is treated as GM's global luxury brand. Chevrolet, at the other end, is the company's global entry-level vehicle.
That does not mean GM soon will be jettisoning another division in the manner of the defunct Oldsmobile. But it does mean an end to separate-but-redundant product-development, design and marketing operations and to all the costs and inefficiencies attached to those redundancies, Lutz said.
''We now have one, single global design and engineering budget. We've put an end to badge engineering,'' said Lutz, referring to GM's discredited practice of making cosmetic changes to, say, a Cadillac and calling it a Pontiac.
How did badge engineering hurt?
Take a look at the highly acclaimed Opel Signum sold here in Europe and the Chevrolet Malibu Maxx on sale in the United States. Both are solid family cars based on the same mid-size GM platform. But the Signum has substantially better styling and considerably more panache than its American cousin largely because GM cut some corners on materials and design to save money and get the Malibu Maxx to market.
It turned out to be a self-defeating strategy. The Signum sells well in Europe because buyers want it. The Malibu Maxx sells in the United States essentially because GM bribes customers with rebates and other costly incentives to buy it.
''Let's face it,'' Lutz said in an interview after GM's Geneva presentations. ``. . . The Signum and the Malibu Maxx should have been the same car.''
Even Toyota Motor Corp., which has much less product proliferation than GM, has learned a similar lesson. For example, what had been sold as the Toyota Echo subcompact in America was marketed as the Toyota Yaris in Europe and Asia.
Although both the Yaris and the Echo shared the same underpinnings, the Yaris had more appeal and was an instant hit among European and Asian buyers when it was introduced in 1999.
The rather dowdy Echo, which came to the United States a year later, was a commercial flop.
Toyota has reworked the Yaris/Echo for 2007. But the company will sell it in Europe and in North America as the same car using the same model name, thus eliminating the need for two separate budgets to sell the same car.
''That is the way we are going to do things from now on,'' Lutz said. ``It just makes more sense. Why we did not do that before? What can I say? We were stupid. We're much smarter, now.''
