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Hot Stocks: GM's Robert Lutz to Retire

General Motors Co.'s "Maximum Bob" has apparently reached his vanishing point.

General Motors Vice Chairman Robert A. "Bob" Lutz will retire from the embattled carmaker effective May 1, the executive confirmed yesterday (Wednesday). Lutz had been serving as a senior adviser to Edward E. "Ed" Whitacre Jr., GM's chairman and chief executive officer.

The move comes just one day after GM announced another shake-up in the North American unit that's supposed to be heading the company's overhaul.

"I can depart with equanimity, because the concept I have been pushing these nine years is 'Only a focus of absolute product superiority will enable the company to reach its other goals'," Lutz said in an e-mail sent to news outlets from the Geneva Auto Show. "This has now been integrated into the very fabric of the company, and is the direction set by Ed Whitacre."

Quipped Lutz, now 78: "I now truly feel I achieved what I set out to do. And this ain't exactly 'early retirement,' is it?"

Change in Plans

Lutz had originally planned to retire from an operational job at GM last April – he was serving as vice chairman of the automaker's global product development at the time – to move into an advisory position. His plan was to then step away from that role and retire at the end of the year.

Lutz postponed his retirement to head General Motors' branding-and-marketing efforts under former CEO Fritz Henderson after the company emerged from federal bankruptcy protection in July. But when Henderson was ousted by the GM board and replaced by Whitacre, Lutz's role was visibly diminished, industry observers say. Whitacre, a former AT&T Inc. (NYSE: T) executive, had been brought in by the Obama administration.

A former Marine Corps fighter pilot who enjoyed cigars and candid talk, Lutz was an auto-industry veteran whose outspokenness and larger-than-life personality earned him the nickname "Maximum Bob." Lutz collects classic cars, motorcycles and even military jets. He has repeatedly ridiculed the whole concept of global warming, and attracted the undying enmity of environmentalists when he said that the entire issue was "a total crock of s**t."

Lutz is one of the few top executives to have held down key positions at each of the companies that once comprised America's "Big Three" – Ford Motor Co. (NYSE: F), Chrysler Group LLC and GM. He also worked for BMW AG.

In fact, the executive's experiences at Chrysler formed the basis for his management-and-leadership book, "Guts: The Seven Laws of Business that Made Chrysler the World's Hottest Car Company." The dust jack describes the book as "a maverick's primer on the business philosophy that revolutionized Chrysler ."

For most of his career, Lutz was an enthusiastic backer of development projects that would result in high-horsepower muscle cars. At Chrysler, for instance, he oversaw the development of the Dodge Viper, a 10-cylinder "supercar" whose early 1990s debut gave the struggling carmaker a badly needed boost in visibility. At GM in 2008, Lutz was in charge when the company introduced the Corvette ZR1, a supercharged tire-shredder with a 640-horsepower motor and a top speed of more than 200 miles per hour.

At GM, however, Lutz's biggest contribution may end up being the development of the decidedly un- Viper-like Chevrolet Volt, an electric car that can reportedly travel up to 40 miles on its electric motor – and that's capable of plug-in recharging. The Volt, slated for a roll out later this year, has been a keystone of GM's self-makeover efforts, and will help determine whether those efforts succeed – or fail.

If the Volt succeeds, GM will be able to compete in the new-but-fast-growing hybrid auto market. But the program has received its share of criticism from experts and pundits for reported shortcomings – not the least of which is the fact that GM is showing up late for the hybrid party.

Back in 2006, Lutz assembled a team of engineers and designers to develop a "concept" version of the Volt, which had its coming-out party at the 2007 Detroit auto show.

The project's goal was to show that GM could create an environmentally friendly "halo car" – fleet flagship – that could take on the prestigious and market-leading Prius hybrid built and sold by Toyota Motor Corp. (NYSE ADR: TM).

Accomplishment-Filled Career

Lutz began his career at GM in 1963, where he worked in both sales and marketing. After holding executive-level posts at both Ford and BMW, he joined Chrysler, holding down key positions in the late 1980s and through much of the 1990s. He headed such essential efforts as sales, marketing, product-development and even production. While Lutz was at Chrysler, the carmaker introduced the rakish Ram pickup-truck line, grabbing market share away from perennial top dog Ford.

Then came the return to General Motors. Hired by former GM CEO Rick Wagoner in 2001, Lutz revitalized GM's product-development efforts – with observable results. Lutz pushed the company to upgrade car interiors, realizing that the company's offerings stacked up poorly when compared to counterpart cars built by Japan's top automakers. The executive also supercharged the programs that yielded the Chevrolet Malibu and Cadillac CTS, cars that are now top sellers – as well as top-rated symbols of the products that represent the "New GM."

Late last month, Whitacre appointed former investment banker Stephen Girsky to the role of special advisor and vice chairman in charge of corporate strategy, a role that led many observers to speculate that Lutz's second tour with GM would soon come to a close.

In another e-mail, Lutz told journalists that he has no regrets.

"My work is done here … so I can retire in peace," he said.

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  1. Dave Harper | March 3, 2010

    I was part of the original electric car project at GM, the EV1. That assignment proved to me more than any other that you may have the best and brightest designing and marketing a vehicle, but you better have "car" people building and servicing the vehicle. Yea, the MBA's can crunch the numbers , but they don't build the best in quality vehicles that customers expect !! Why is Toyota having so many quality problems these days ?? I can only guess..

  2. Dave Harper | March 3, 2010

    Long live car guys like Bob Lutz !!

  3. Dave Harper | March 3, 2010

    The auto manufacturers need the insight of the inner workings of the assembly plants, not just MBA's who can theorize what should happen. Never take your eye off the quality target. Look what has happened at Toyota !!

  4. William Patalon III | March 4, 2010

    Dear Mr. Harper:

    Truer words were never said.

    As a former business journalist of many years standing — who covered such manufacturing icons as Caterpillar, Harley-Davidson, Xerox Corp., Eastman Kodak, Westinghouse, and others (as well as countless second-tier manufactuers) — I completely concur with your comments that bean-counters, number-crunchers and MBA suits are usually ill-equipped to run a manufacturer….they too often lack the "feel" for the products, what those products are supposed to do, how customers will use those products, and what those customers want in terms of quality, look, feel, dependability, and utility.

    Unfortunately, the suits too often are also completely clueless as to what it takes to manufacture the key products…..they've spent too much time staring at reports and rows of black-and-white numbers, and not enough time talking to the workers who actually build the products.

    I've seen companies that understand these challenges, and that tackled them…..those companies "do it right." And, in my role as a journalist/observer, I've also seen companies where upper management clearly doesn't get it. In this list of companies, there were players that fit into both camps. Some are gone, some are in different businesses, and some remain the leaders that they always seem to be.

    Thanks for taking the time to post these interesting and insightful comments. To any other readers out there, let me say that these observations are well worth reading…..

    I hope we hear from you again, sir.

    Respectfully yours;

    William (Bill) Patalon III
    Executive Editor
    Money Morning

  5. Daddy Paul | March 6, 2010

    How Bob could stand to work for a guy like Rick Wagoner I will never know. I’m sure they bumped heads a lot.

  6. A. Gram | March 8, 2010

    I get ridiculing environmentalists, but calling a guy who sells cars calling global warming a total crock of s**t doesn't exactly have the most credibility.

  7. Nina Gennetten | March 8, 2010

    Do you think GM stock will ever be sold again on the stock market?????

  8. Tariq E Hashimi | March 17, 2010

    I think gold will go back to $300.00, what is the gold used for? if you say currency unit then yes it can go to $1500.00 but if you say gold used for jewelry then it will go for $300.00 don't support to jack of the price of gold like those people who did to realestate.

    Don't buy gold avoid gold it will drop to even $300 it's you and other like you scare public to buy gold gold is looser wait for 7 more month gold will be 700.00

  9. Frank janesick | March 29, 2010

    I keep wondering, Bob Lutz was CEO of Exide Battery at one time, before his resurgents at GM. I keep thinking that Exide should be a good holding with Lutz and the new battery run auto. Therefore, I Am loaded with Exide.

  10. Tabea | May 18, 2010

    OK. Bless you on your mission.,lucy

  11. Lemon diet | June 1, 2011

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