Bob Lutz - Is he making the grade?

nvbanker · March 2005

"Agree that the STS is overpriced. The ceiling for the STS should be around $55K, (loaded - everything in and on it) and the V-6 version should start somewhere in the upper $30K range. I would buy a new STS in a minute if it weren't for the ridiculous price. As a result, my next Caddy may end up being a DeVille or DTS."

Exactly my thoughts, lemko.........

varmint · March 2005

There are already something like 2 or 3 GM bashing threads already in progress. Can we keep this one focused on things Lutz actually has a hand in?

sls002 · March 2005

But I always liked the Firebirds styling better...

nvbanker · March 2005

Who's bashing????? (They're an easy target though, they do plenty wrong...) We're just saying, that's all..... I still think GM is too big an elephant to make tap dance....

davies1 · March 2005

I am not GM bashing I am simply pointing out the obvious. GM's decision making is not based in sound logic. A truly dedicated refresh of the F body could have really started a fire in buyers.Do I need to point out what Ford has accomplished with the Mustang. Whether you are a Ford person or not, you have to admit the new /old Mustang is a huge success. Compare that with the GTO or SSR. GM's price points for the new introductions are right off the scale. Again compare to the Mustang or the final iteration of the f boby cars. Now if Lutz had guts he would have his designers creating a new camaro instead of importing warmed over goat.

donnyboy1 · March 2005

Nobody bats 1000. GM is like a giant ocean liner and it can't turn on a dime. I believe he is making an impact which is helping. I would want him on my team if I were at GM. But one man may not be able to do enough to fix all that needs fixing at GM. Time will tell.

tommc · March 2005

In today's car market often perception is reality and, well, reality factors in too. GM is perceived as a lower quality manufacturer and dealer service is becoming poor, and today's consumers are aware of this more than ever. Being the head of the company this perception is squarely on Lutz's shoulders.
Just for fun (?) consider we bought a new Blazer in 01, a loaded up two door two wheel drive. Service at selling dealer was terrible, both routine lube service and warranty service. Took to another dealer and pretty much the same result. Now we find that we are driving the most unsafe vehicle in America, worse than a Kia! I'd guess our trade in value is about $500 now with 16,000 miles on it. Not a happy camper here.

mariner7 · March 2005

To turn things around, Lutz must fill the exec suites with his own people. When Iacocca was at Chrysler, he brought his own people over from Ford. I don't know about the current GM execs, but probably they were Wagoner's men; one was his basketball buddy at Harvard B. Being a finance guy, his buddies are all money men.

44444 · March 2005

He would not be where he is unless he is GRADE A
period.
Stock holders want results yesterday and maybe they should get them. Mid-America has always been stuck on Buick LaSabre and the Unlimited series
that has been their bread and butter.
They need to intro. a 2dr & 4dr with a $ range
of 14,995-22,995- plus options offer 2 engines in
both manual in all with optional automatic. The Skylark of old did not do that badly. I do not have #'s on Colbalt but the marketing was and has been good. Where as Ford's Five-Hundred marketing was a waste of money.
It use to be car marketing was to make you feel good that you bought the right car now it is to drum up a demand for the product.
I believe Opel wants back in America and with that 2 seater they have a winner.(gas saver as well)
Give bob 16 months. He does need to get rid of a mini-van though. 44444

wale_bate1 · March 2005

"He would not be where he is unless he is GRADE A period..."

OK, here's your first lesson in corporate America:
Cream rises, it's true, but poop floats too.

Fact.

Not saying Lutz isn't top drawer, but rank is no indicator ever.

Period.

I believe the man has vision. I also believe asking one man, or rather one tenure, to turn a hulking beastie like GM around is like trying to build a bridge with spaghetti. You need some extra support there.

I don't know who posted it back up there, but if Lutz had free rein to overhaul the ship of fools from stem to stern and keel to crow's nest with his own hand-pickin's, it might be a different story. Might. There's one hell of lot of inertia at play here.

merc1 · March 2005

In simple terms Lutz isn't living up to the hype, imo.

What I really don't like is the excuses. I mean he's been there since what 2001? If the cars coming out now aren't of his doing, or at least somewhat of his doing then when do we officially get an all "Lutz" product?

The GTO is definitely his. GM would have never brought this car over on their own. Too expensive they would have said. There is no market for coupes (a lie), they would have said.

I like the SSR, don't matta' what nobody say..lol! This is one cool truck that just this year got the engine it should have had in the first place.

I'm simply not impressed by any other GM product other than the Corvette. Everyone is ga ga over these new Cadillacs, but they're too unattractive for me, which makes me wonder what they would have looked like if Lutz hadn't got involved. The STS could have looked worse than it does now? The XLR is ok I guess, but in that league ok doesn't cut it as sales have proven. The CTS while very popular has never, ever been the class leader GM promised.

That said, future Saturns (Aura,Sky) show promise. I'm in favor of making all Saturns Opel based becaue the current Saturn lineup is truly awful, especially that Ion. He couldn't have stopped this car or at least held it back until it was made to be an improvement over the car it replaced? Future Buicks (Lucerne and the rwd Park Ave replacement) show promise, the LaCrosse doesn't. It is a Grand Prix stuffed full of sound deadning material.

Since this is a topic about Lutz, my biggest problem with him can be summed up in one word - Saab! He thinks the few Saab buyers that exists are complete idiots to try and pass a Subaru and a (gasp!) Chevy off as Saabs.

Ok, the Pontiac Solstice is the first all "Lutz" product or no? If it is does anyone here think it will match the new Miata?

I agree, he can't change GM by himself, well he probably could if he had 20 years to do it, but he doesn't. What happens when he retires? Who will replace him? BTW, when does his contract run out anyway?

M

corvette · March 2005

*** Could Lutz forecast that the price of a barrel of oil would be at an all time high in March 2005? Could Lutz see that fickle SUV and truck buyers would find that operating costs are too high? ***

Let me put it a different way: Could Lutz foresee the risk of having all GM's eggs in one basket in a fickle market? Because everyone in the press has made a big stink about Detroit being too dependant on their trucks for some time now.

I've said this before, and will say it again--Lutz is a has-been. I'm driving a 2004 Canyon right now, and I see way, way too many parts that have been reused from the Sonoma, starting with the seats, continuing to the steering column, and that insipid all-in-one stalk.

Between myself and my immediate family, we have purchased one domestic car since 1988 (and four domestic pickups). All the rest were imports.

branch2 · March 2005

You simply are so WRONG......either you are a GM employee or living in the dream world, and I do not say this disrespectfully, but you, like all of GM for the past 30 years BLIND TO REALITY. I could give you COUNTLESS article that reveal GM cars as last place. JD Powers (ever hear of them??) and Consumers Report (see April 05 issue), places GM customer satisfaction for most of it's vehicles dead last, the poorest safety (can you believe GM is only now/April to shut the Linden , NJ plant that produces the single most archaic and most fetal accidents of ANY CAR IN THE US...the Blazer???? Dependabilty???.....just look at all those red bullets for GM cars, and most FMCs, and you will understand why virtually every new and past 30 year vehicles are the poorest rated. They can't even keep the names for very long because of horrible past history.......when have you heard of a Honda Accord, BMW, etc droping a name??? I could fill pages of the disguisting garbage GM produces, and the inept people behind them deserves to be ALL fired. They have squandered more money on ill fated cars, divisions, and technologies than the entire world combined!!! Just in the last few months I, by chance, read of this ongo litney ie failed/discontinued GM trucks with retracting roofs........supplier of the rood sueing GM for not even reaching 10% of expected demand. GM drops quadrasteer, again because of little/no demand, Saturn CVT dropped from most Saturn lines because of defieciencies.............got the message, they had 30 years to prepare for the [non-permissible content removed], Europeans, ie competitors, and have failed miserably........it's now time for them to fold their tents, loose their jobs....all predicted by me years ago, and I was once a GM car buyer.

branch2 · March 2005

Clueless........GM spends 4X the average in incentives to move their garbage, and still manages to loose unprecidented market share..........Camray etc offers incentives to exceed by a heady amount last years, same period sales, to occassionally boost their relentless and well deserved assention into dominance, while burying the ineffiecient, poorly conceived, executed, and managed GM vehicles. Look, do you honestly thing giving tons of G6s away on Oprayh(most were sold off on ebay) or having T. Woods a spokesperson serve any remotely good thing???....oh yea, as Woods made over 30 million Buick sank to decades low sales........nice move GM. Why do (heres a novel idea) take all this ill spent wasted money and improve the seats and design of the rear passengers for the silly G6........my sister's old 92 Camray was infinitely more comfortable than the G6 I recently rented.........you see I have always hoped that GM would save itself, but is clearly not ever going to happen.

branch2 · March 2005

What are you smoking man??? GM employs over 57,000 engineers, and ONE or a FEW good managers aint going to make a bit of a difference to a co that has seem 9 series of 'new and different management' in 35 years........the only thing is certain that all these AHs will get millions in golden parachutes for overseeing unprecidented loose in market share, market cap, reliabilty, customer satisfaction......enough said ie fire the idiot Lutz and every one else........then buy 10 year old Toyaota, BMW, Honda, Subaru etc technology, produce cars off shore in China.......then GM will survive, maybe not given they are all so terribly inept/blind/.

branch2 · March 2005

Again TODAY, Safari etc worst safety record/deaths of any mini van in the US!!!.........a few wks ago it was the Blazer the worst/most fatalities of any SUV in US!!! The point??? while both vehicles after being on the market for DECADES are finally going away.....what a disgrace that ANY car co/mgt can support 20 yr old designs for so long ie it's more profitable to do nothing attitude.....how idiotic is this????!!! Other examples of unbelieveabe poor decisions can fill a book, and I'm only a car enthusiast. The Cavalier, Sunfire, Camaro/Firebird, Trans Am, Impalas,Regals,etc, were relics when replaced, and were the volume leader frequently for the division....what does this say about a practice that continues for 35 yrs?????? Look at Buick, it has a few but the worse SUV in the entire business, why???????? No one except a Buick sales person probably ever even heard of these dinosaurs.........oh, the grafting on a hood of a 8 yr old uncompetitive series of minivans really was a smart idea as well......does GM/Lutz and co folly ever end.......oh yes it will, with the demise of GM........hopefully it will go bankrupt in a few years.And the pension and health care benefits??? All to grossly generous(paying a hs drop out $55/hr is absurd), were approved by GM inept mgtm for DECADES!!!!.........and now they are complaining????l.......just like they complained about the [non-permissible content removed] invasion 25 years ago....they are now on our soil and eating it's lunch while burying them(GM and Ford).............do you see pattern here or not??? GM stock in now at a 10 yr low.........most analysts predict it will go down to pennies, already eclipsed by Nike etc, and Toyota alone is worth 8 times GM capitalization ie worth.........still think my points are not well directed.......get off your pompous attitude.....again you are likely a GM employee or a retiree and don't like to see the plain truth. GTO??? Lutz had an influence on this fiasco also ie selling at 15% of projected volume. Do you realize that EVERYTHING THIS IDIOT DID WAS TO MAKE THE HOLDEN MONACO A WORSE CAR??? Lutz removed the side air bags(costs:-)), replaced an attractive front grill with a 20 year looking Grand AM one, moved the gas tank into the trunk providing one big enough for about 4 loaves of bread(I realize it was a safety hazard but could have sunk it and recontoured the trunk floor, but oh no, that would have cost about $50/vehicle...what folly. Then the idiot says Pontiac didn't have enough time to reroute the tail pipe to creat a badly needed cosmetic lift to the rear, in the same breadth he claimed to have 'tuned the exhaust sound' through extensive sound chamber tests........do you see how an incompetent person/Lutz, and a similarly inadequate/inept co/GM repeatedly shoots itself in the foot...........now it's aiming for it's own head in the marketplace......and it's getting very good at it!! You deserve your own demise!!!

branch2 · March 2005

Yea, so does Mazda6 and others have 5 speed, for about 50%less money:-)!!!Many of GM's v6 in use today go back to the 70's for cryin out loud, and souund like John Deere's at high revs.......I know this, because frequenty I am forced to rent GM, all are junk......even my clients complain occassionally about the poor erognomics in the back seats of 2002-05 GM mid and full size sedans.......GM deserves their consistently poor ratings by every metric, by every car magazine, and by the public that rejects such garbage ie GM is going out of business for sure. Did you know ONLY GMs lending business(auto, mortgage,etc) made any money in the NAmerica market in the past 7 years?????..........I can't honestly think of anything nice to say about GM or Lutz, except the Saturn Vue has attactive ext color choices, but tips dangerously, rear wheel disaster recalled, steering is super unnatural/disconcerting.......oh yea,I did think of a second nice thing to say about the Vue..... it's Honda V6 is the ONLY thing mechanically decent on this vehicle, ditto poor design, quality, reliabiltiy for all it's other cars.

imidazol97 · March 2005

Consumers Report is NOT a statistics-gathering company with authoritative knowledge. They gather anecdotal reports and their own opinions along with what will sell magazines.

MT, C&D, Autoweek are more like asking teenagers what car they would like to own. Nothing practical in their opinions of transportation choices for those with incomes below $200K and who drive only the chic item for the month.

(Too, "its" does not have an apostrophe.)

imidazol97 · March 2005

>JD Powers (ever hear of them??) ... places GM customer satisfaction for most of it's vehicles dead last

Please provide a link for JD Power's results to support that statement. Last I checked my Buicks were rated highly, I believe above Honda, but I'd have to search for some old links to state that.

As for you Consumer Reports as a reference, please see my earlier post.

merc1 · March 2005

"MT, C&D, Autoweek are more like asking teenagers what car they would like to own."

I have to disagree with that. Car and Driver does pretty good with their test drives. Now their comparos are a little skewed towards sporty driving dynamics for sure, but their individual road tests are usually spot on imo. Motor Trend, while getting better by having some editors from England's CAR Magazine on staff now, used to be last in value - I'd agree. Autoweek is an extreme hit or miss affair. Its better to read their Autofile section in which actual owners write in on the car to see how the car is doing in the real world. Some of AW's roadtest or comparos are pretty lame too, imo.

But Car and Driver - can't agree with you there. I've found so many things they've said to be very true upon driving the car in question for myself.

If you don't look to the mainstream auto press for opinions who do you think is good at evaluating cars? Consumer Reports?

M

c2rosa · March 2005

See the following link for 2004 JD Powers results.
http://www.urbanplanet.org/forums/lofiversion/index.php/t3852.html

At the link, you'll see the following:
By specific brand

Lexus 87
Cadillac 93
Jaguar 98
Honda 99
Buick 100
Mercury 100
Hyundai 102
Infiniti 104
Toyota 104
Mercedes-Benz 106
Audi 109
BMW 109
Oldsmobile 110
Volvo 113
Acura 117
Chevrolet 119
INDUSTRY AVERAGE 119

Cadillac and Buick get excellent quality ratings (2nd and 5th, respecitvely). Note that Toyota comes in 9th.
I don't know what the confidence limits are on these estimates. JD Powers (and Consumer Reports) don't tend to publish these

c2rosa · March 2005

Regarding your statement:
"Look at Buick, it has a few but the worse SUV in the entire business, why???????? "
I'm puzzled.
I believe that the Buick Rendezvous is considered to be an SUV. It has been and is currently recommended by both Consumer Reports and JD Powers. Also, according to JD Powers 2004 automotive survey, Buick came in 5th with an average of 100 problems per hundred (pph) versus Honda at 99 and Toyota at 104. I'm no fan of the mid-size Buick vehicles (though the new Lacrosse does seem to be an improvement, and the soon to be released Lucerne looks quite nice). However, the Rendezvous is an excellent vehicle whose quality I can personally attest to.
I haven't tested the Buick mini-van. I agree that it's not getting stellar reviews. However, we don't yet know about the quality. As it shares a lot of components with the Rendezvous (which is recommended), it may turn out to be a good vehicle (though admittedley without the latest features found on the Sierra, Town and Country, and Odyssey). We shall see.

sls002 · March 2005

J. D. Powers links, that unfortunately don't support branch2....
http://www.jdpower.com/cc/auto/releases/search.asp?CatID=1
There are a number of reports here, but the 2004 customer service satisfaction shows GM makes are nearly all above industry average. The dependability study shows GM above average. Buick is #2 after Lexus.

c2rosa · March 2005

Regarding:
"GM deserves their consistently poor ratings by every metric, by every car magazine"
Please see the following link for the 2004 JD Powers quality ratings.
http://www.urbanplanet.org/forums/lofiversion/index.php/t3852.html

In case you were unaware of these, you'll note that Cadillac and Buick both place near the top (and both ahead of Toyota).
Also, interestingly, GM as a whole comes in much ahead of Nissan (120 pph for GM versus 147 pph for Nissan). Nissan is generally thought of as a strong Asian automaker. JD Powers statistics suggest that their quality may not justify this entirely. I think that GM's biggest challenge is the legacy health care burden. At over $5 billion/year, something must be done (i.e., negoatiations with union and non-union retirees) over this. The same burden is in place for Ford and DCX. Please note that Toyota and Honda haven't avoided this because of their brilliant management. Their retirees (outside of the US) have state provided health care. Inside the US, they don't have many retirees yet.

imidazol97 · March 2005

Looks like

Volkswagen of America Inc. 141
Nissan North America 147
American Suzuki Motor Corp. 149
Kia Motors America 153
Porsche Cars North America Inc. 159

all share the honors of being lowest.
Sure takes the credibility out of branch's rant about GM. Must be a Honda employee trying to blast GM after all the troubles they're having at Honda with quality control on new Accord body and with their transmissions through their lines.

Thanks for the help with those links. I knew what I'd read last summer in an arguement about JD Powers on the forums, but don't have it in my favorites anymore.

mariner7 · March 2005

GM is having trouble moving its new cars because people think they lack pizzazz, style, or performance, not because of reliability issues.

Do people buy 300C because they think it has top notch reliability? Or because of its styling and Hemi?

imidazol97 · March 2005

There is a large part of the market still trading on the image that Honda and Toyo build perfect, dependable cars that never fail just like in the 80s when they were a clutch, 4-cyl, and little power equipment for creature comfort. That group taht bought them then for a cheap 2nd or 1st car still hangs on the image.

Reality isn't there yet. Consumer Reports still perpetuates the image and the pizzazz market isn't there for that kind of buyer.

c2rosa · March 2005

Regarding:
"This is based on the most statistically/true sampling of ALL......over 250,000 owners, not car magazines."

The respondants are all consumer reports subscribers (which is not necessarily a true sampling of the entire US population - though I have never known CR to publish a demographic breakdown of their readership (e.g., region of the country, per capita income, educational level, etc)). I believe that they got 300,000+ responses (though I don't know for sure). My understanding is that JD Powers gets responses from a more random sample of the US population (and a larger one as well since they're not restricted to the readership of a particular publication like CR). The sample is not based on subscribers to any particular magazine (and the sample is definitely not limited to automotive magazine subscribers as suggested by branch2). I will get more facts on this soon.
Here are JD Powers' 3 year dependability results.
Go to:
http://www.detnews.com/2004/autosinsider/0407/04/autos-198392.htm
for the complete detroit news summary.

Brand Problems per 100 vehicles
Lexus 162
Buick 187
Infiniti 189
Lincoln 194
Cadillac 196
Honda 209
Acura 212
Toyota 216
Mercury 224
Porsche 240
Chevrolet 262
GMC 262
BMW 264
Saab 265
Saturn 267

Both Buick and Cadillac are in the top 5 (though their order is reversed from the short term quality review).
I am not questioning the fact that both Honda and Toyota are excellent car companies. I am simply trying to supply some facts that call into question some of your more outrageous claims.
GM does produce some excellent vehicles as evidenced by both short and long term dependability studies.
By the way, Consumer Reports makes their recommendations based on much more than simply reliability studies. I don't know exactly how they come up with their recommendations, but the recommendations are based on both reliability studies and the personal feelings of the magazine's reviewers.
For example, CR gave a recommended rating to the Honda Pilot during it's first year because they felt it shared enough parts with the Acura MDX (a vehicle which was already recommended by CR). CR did not give a recommended rating to Chevy's new Malibu even though it is based on the same platform as the Saab 9-3 (which did get a recommended rating by CR). These and other inconsistencies are, at the least, very troubling.

imidazol97 · March 2005

>most statistically/true sampling of ALL

What an outrageous statement about statistics. You are void of understanding of proper sampling methods.

JD Powers sends surveys to owners selected randomly.

CR has a subscriber base that is NOT a cross section of all owners of each type of car. They sometimes send a survey (I have subscribed two times in recent years and one year long ago) and I have never received their survey. The subscriber who received a survey decides if they want to send it back or not. If they want to feel their brand of car is good even though they have had problems don't return it or don't give bad responses. If they are mad at the car they have, they blast the car on the survey they send back.

CR then "interprets" the results they received in the light in which they want it interpreted. They also have to be careful about their subscriber's feelings. If they blast certain cars their subsriber list goes down. If they puff up carefully, the money keeps flowing in. THink about the money flow.

Of course CR would want people to think their report is the most correct and they push that image, just as some car companies and their dealers push the image that their cars are the best and most perfect...Think about the money flow.

How many surveys did they have returned about a Buick Regal? Civic? Lexus? You'll never know.

Note that I have used white space between my lines. It makes a post much more readable.

c2rosa · March 2005

Regarding branch2's comment:
"And the pension and health care benefits??? All to grossly generous(paying a hs drop out $55/hr is absurd), were approved by GM inept mgtm for DECADES!!!!."

I agree that the main problem facing GM is the out of control health care costs. The only way to control these is through serious and thoughtful negotiation with the unions. The facts are that if GM bleeds $2 billion/year (as it will do this year), it will burn through it's savings in 10 years, and all of the current union employees will lose their jobs and move onto a lucrative future at McDonalds and other such "high wage" places of employment.

Fortunately, there is a solution. Thoughtful negotiation. If co-pays and cost controls are introduced (like have been introduced at successful companies like GE, etc), then these problems can be handled. Let's hope and pray that the union responds to reason.

Again, keep in mind that Toyota and Honda have never had to deal with health care issues as this burden is assumed by the govt in Japan. This isn't an excuse, this is reality.

Regarding branch2's comment:
"GM stock in now at a 10 yr low.........most analysts predict it will go down to pennies, "

It is true that GM stock is at a 10 year low. This makes sense as this is the first time in 10 years that GM will lose this kind of money. Regarding the claim that "most analysts" predict the stock will go to "pennies", I have seen no predictions like this. I would love to see some references. Please pass them on.

Regarding branch2's comments on the mini-vans, I agree that the most recent mini-vans don't have the latest features and functionality of the Town and Country, Sienna, and Odyssey. I assume that there is only so much development money to go around, and that the Epsilon programs (e.g., Malibu, G6, Malibu Maxx, etc), and Theta programs (e.g., Vue, and Chevy small SUV) got most of the funding this cycle. Let's hope for the future.

grbeck · March 2005

imidazol97: MT, C&D, Autoweek are more like asking teenagers what car they would like to own. Nothing practical in their opinions of transportation choices for those with incomes below $200K and who drive only the chic item for the month.

Car & Driver regularly conducts comparison tests of SUVs, family sedans, pickups and compacts that are purchased by regular folks making well under $200K per year. It also conducts solo tests of those vehicles. Their tests are thorough and comprehensive.

Automobile also regularly reviews vehicles that are bought by average, middle-income buyers.

Yes, they test Ferraris and other exotics. They offer a balance of practical information and fantasy. Judging by their reader demographics and monthly circulation figures, it works.

I'm sure lots of publications would love to claim those figures.

imidazol97: Volkswagen of America Inc. 141
Nissan North America 147
American Suzuki Motor Corp. 149
Kia Motors America 153
Porsche Cars North America Inc. 159

all share the honors of being lowest.

And the BTK fellow they arrested in Wichita didn't kill as many people as the Manson Family. Guess we should let him go, he's not that bad...

imidazol97: Sure takes the credibility out of branch's rant about GM. Must be a Honda employee trying to blast GM after all the troubles they're having at Honda with quality control on new Accord body and with their transmissions through their lines

Ask owners about the reliability of the intake manifold gaskets on 3.4 V-6s.

My co-worker just had the one on her Impala fail at 68,000 miles. The dealer was going to charge her for the repair, until I found the TSB on the Internet, and she was able to get GM to pay for it. At least GM did finally pay for it, but it would have been nice for GM to have sent out a notice and extended the warranty, as Honda did with certain problematic automatic transmissions.

After all, the problem with the 3.4 V-6 is widespread, and, if not detected in time, can ruin the engine.

As for Buick - I sure hope it scores well. It uses an ancient engine and two basic platforms, both of which have been around for awhile. If it can't achieve good reliability with those components, GM needs to get into another line of business.

c2rosa: Again, keep in mind that Toyota and Honda have never had to deal with health care issues as this burden is assumed by the govt in Japan. This isn't an excuse, this is reality.

Employees at the Honda and Toyota plants in the U.S. are not covered by the Japanese national healthcare system. Honda and Toyota must purchase insurance through a private company if they want to offer this benefit to their U.S. employees (which they do, or they would otherwise risk a successful unionization drive).

c2rosa · March 2005

Regarding:
"Employees at the Honda and Toyota plants in the U.S. are not covered by the Japanese national healthcare system. Honda and Toyota must purchase insurance through a private company if they want to offer this benefit to their U.S. employees (which they do, or they would otherwise risk a successful unionization drive).
"
Good point.
I guess the point I was trying to make was that the bulk of their employees (who are in Japan) create no health care liability for these companies. That is a huge competitive advantage worth several billion dollars/year.

The small fraction of their employees who are in the US (at least as compared to the domestics) are still comparatively young and so are generating less health care cost burden for Toyota and Honda.

As time passes, and if they continue to build more plants in the US, they will start to incur more health care cost (as their workers age and enter the "expensive health care" phase of life). Once that happens, they'll start to have to make more difficult choices about how to spend revenue dollars (health care vs product investment). This isn't a criticism of them, it's simply the nature of business. If I were Honda and Toyota, I would do most of my investment in Canada where the govt picks up the health care burden as well.

Regarding:
"As for Buick - I sure hope it scores well. It uses an ancient engine and two basic platforms, both of which have been around for awhile. If it can't achieve good reliability with those components, GM needs to get into another line of business.
"
I guess what you're saying is that Buick's reliability is only good because the technology is "tried-and-true". The fact remains that the quality is good, and I mentioned this fact only because of branch2's rash statements about all of GM's product lines being at the bottom of every metric in every survey (which is easily contradicted by JD Powers survey results).

imidazol97 · March 2005

> they continue to build more plants in the US, they will start to incur more health care cost (as their workers age and enter the "expensive health care" phase of life). Once that happens, they'll start to have to make more difficult choices about

Since those factories aren't unionized to protect the workers from unfair dismissal, odds are the companies will start to refresh their workforce with younger and younger workers as the older ones are moved out by various means. That will keep healthcare costs cheaper for the company.

grbeck · March 2005

Buick technology is "tried and true." It works, and it obviously satisfies Buick's loyal customers.

The problem is that, judging by the division's dwindling sales figures, that customer base is slowly shrinking. If Buick is to survive, it must reach out to a new group of customers.

As for the challenges faced by the transplants as their workforces age - I'm sure these issues will pop in the coming years. But remember, that:

One, the transplants don't have to chose the same (expensive) solutions that have evolved through UAW-Big 3 contract negotations over the years; and

Two, when these demographic challenges do become an issue, it won't necessarily be a replay of the UAW versus Harry Bennett from the 1930s.

lexusrocks · March 2005

I totally disagree with you on the Cadillac STS. That car is the one that will revive the brand, and it's good reasonably good looks (not as ugly as an Audi A6) a luxurious cabin, and superb technology and handling.

However I agree with you on the other cars. The Chevy Malibu is a decent car, but it's interior is just plain ugly. The G6 is also a good car, but it can't touch the handling of the Europeans.
All GM midsize sedans (Impala, Malibu, G6, Grand Prix, Lacrosse) need Nav systems, which the Accord, Altima and Camry all have. The SSR is a really cool vehicle, but who buys it?

The Buick Lacrosse is also several steps behind the Lexus ES300. No Nav in a luxury car?! What were they thinking?

By the way, the new Corvette's look is just plain ugly. They should have kept the old style of the headlamps. The new ones suck.

Buick will never be like Lincoln. Lincoln vehicles have better engines, more technology and better interiors.

lexusrocks · March 2005

Really, I agree with you. How could they kill Oldsmobile. Let's see, they had the Intrigue and the Alero (decent looking cars with good performance). The Silhouette looked much better than the Chevy Venture anyday. And finally the Aurora. If they improved the build quality and improved handling and performance, they would have a solid sport sedan, capable of going head to head with the Japanese. If course a nice interior is needed, but if the Cadillac STS can have one, then why not the Aurora. Finally, adding a nav system would have made the Aurora a real competitor, not a cheap car with a tired design.

Saturn should have been the company to be phased out. The L series and Ion are garbage. The Vue is decent, but the Honda CRV and Ford Escape are way better. Saturn did get the Relay, which is ok, but if Oldsmobile had been alive they could have taken it. Hopefully the Aura and Sky can revive this dead brand.

lemko · March 2005

...and the LaCrosse is also about $10K less than that glorified Camry. I can buy a Nav system for a few dollars - it's called a road map. Back in the day you could get them for free at the local filling station.

My girlfriend just bought a new LaCrosse this Saturday and she couldn't be happier. The sales experience was excellent and very low-pressure. The Buick salesmen's laid-back demeanor didn't betray any desperation at GM. It was very unlike her experience over at the Toyota dealer when she was looking at a Camry. It was akin to being tossed into a tank full of hungry tiger sharks.

All this GM-bashing reminds me of "I don't like green eggs and ham!"

imidazol97 · March 2005

As a likely LaCrosse, Lucerne buyer in a couple of years, I can't understand the folks who decry a car as trash because it doesn't have one item that they fancy from seeing an ad for a Lexus or Infinity or STS or whatever that had some 'feature.' The cars just never are as good as that car behind the tree over there.

I went through that stage of wanting a car that had everything in my youth (never had it) but always got the car that was practical and made me enjoy driving it.

I don't need navigational aids in my car. I use road maps when I travel. And I stop at Shell stations for directions!!! I don't even want the ONStar that I had to take with the Limited we bought.

It is fine if options are available for those who want the option, but it doesn't need to be standard for me to have great, American driving cars for our roads. I don't need European sports suspension for the driving feel that some US residents perceive as making a European car drive. If I read posts in another boring argument in another Edmunds group, most European cars are very gas efficient. I don't imagine them driving at 130 mph with their navi telling them where to go on the autobahn since they don't know where they are.

Lutz had a heavy hand in changes to the final Lacrosse. I like the car. If it were more radical, people would complain they should have kept it more typical. If it's typical, they should have made it more radical. If they used an existing platform, they should have used some fanciful image of a platform that XXX car is being built on for $80000. IF they made changes to a radical platform, it should have been a more tried and tested platform to do this or that.

I get the feeling it's just hate GM no matter what.

c2rosa · March 2005

Regarding:
"
Since those factories aren't unionized to protect the workers from unfair dismissal, odds are the companies will start to refresh their workforce with younger and younger workers as the older ones are moved out by various means. That will keep healthcare costs cheaper for the company."

If the UAW catches wind that older workers are being dismissed without some sort of health care coverage into retirement, they will have a better chance of unionizing the plant (which, obviously, the Asian automakers don't want). The only threat that a Toyota or Honda could use to fight this would be to threaten to leave the area.
This is a credible threat, but not inexpensive (since it means walking away from the sunk cost of a plant).

Another way for Toyota or Honda to handle the situation would be to provide some sort of reasonable coverage to retirees. I agree that they can probably do this more cheaply than the overly rich benefits packages current Big-3 blue collar retirees enjoy.

I believe (and hope) that the extravagant health care benefits that Big-3 blue collar retirees currently enjoy will be scaled back through negotiations. Without this, I think that all of the Big-3 will have a very hard time surviving in the long run.
At some point, however, current UAW employees will do the calculus and realize they will have nothing for their retirement if they drive the companies they work for into bankruptcy by digging in their heels.
For the future of US manufacturing, let's hope that all agents to the negotiation find a sustainable solution.

rdsum · March 2005

There are some interesting comments about Lutz turning GM around.

I have often wondered how the auto companies do their research for new vehicles. How did the Pontiac Aztec make it to market? Who did GM listen to? (In fact, who did Ford listen to for their new vehicles?)

How can the GTO be expected to sell in necessary volume to keep it alive when it is "over priced" and seems to be poor value? The new Mustang grabs attention and the value seems better. I would expect the reliability of the two to be quite acceptable. It would not be "Japanese" but it would be tolerable.

The Cadillac STS has come up in the discussion. I know a number of Cadillac owners that would never, never change. . . . no matter what. However, they are getting older and their numbers are decreasing. I know of one relative that had an A/C module fail completely so that all the car provided was hot air. Try that in July on a summer vacation. It only took a week to get in the new parts . . . and this was for a "new" Cadillac.

I know of more examples of other owners that had other problems with other Cadillacs. . . . and guess what, they still buy another Cadillac. They would never buy a Lexus because it is not North American.

I like the STS but I do not know if I could tolerate the electrical bugs that seem to plague the "fancy" new technologies.

I recall being at the GM garage getting my Olds fixed on a warranty repair. They had a brand new Cadillac in pieces because of an electrical problem. The owner had purchased it for collector value. It was one of the last Barritz optioned convertibles. The technician had spent at least 4 days trying to solve the problem. They finally got it fixed but the sight of all those pieces made me think how the owner felt about a car that was going to be stored "for future" appreciation.

Does Lutz have a problem? Yes he does! Was it something that happened "overnight"? . . . not really. Can it be fixed easily? . . . I do not believe so.

I agree that the reliability thing is important but the vehicles need to arouse some excitement.

Why did Lutz give his stamp of approval to the new nose jobs on the GM minivans? You can almost hide a small deer in by the windshield wipers.

Just a final thought after all this rambling. Why did Lutz have to get rid of the Bonneville? . . . again the price got too high for any volume.

In case you are wondering, we have a Toyota Camry, Pontiac TransSport, Chevy Tahoe, and an old Plymouth Caravelle to drive. (my wife and I)

One thing is for sure, change will occur in the automotive industry. I do not envy Bob Lutz for the job he has been asked to do.

lemko · March 2005

"I like the STS but I do not know if I could tolerate the electrical bugs that seem to plague the 'fancy' new technologies."

I have a 2002 Seville STS and have yet to encounter any electrical bugs after 3 years and 52K miles. If you want to talk about electrical gremlins you should see the problems my brother-in-law has with his 2000 S430. Tesla couln't fix that car.

The last Biaritz optioned convertible? That would be 1985! You're talking 20 years ago. I believe those Eldo convertibles were done by an outside supplier.

rdsum · March 2005

I actually think the Cadillac that was mentioned was even earlier. The collector thought it was to be the "last" of the convertibles.

The electrical bugs are tough to find sometimes. I have even had two radios, on warranty, for my Tahoe. They stopped working once they warmed up. GM replaced them with no fuss. One of the power door locks got lazy as well. Again, no fuss with GM. I actually think their technicians are getting better training.

Like I stated, the STS is a nice car. It sure is nice when they keep working like they are supposed to. I was trying to convince my wife that the seats in the STS would be great for her back. She does not like the seats in the Camry. She likes her V-6 Camry, but it still requires things fixed when they develop problems. (Water pumps, timing belt, valve adjustment, manifold gasket leak, etc.) You see, all cars need attention. My impression is that the GM vehicles will run just as long as the rest.

Of course Bob Lutz had nothing to do with the cars produced years ago. I guess we expect too much. However, it is tough to find a Lexus owner that is dissatified with the quality of a Lexus today.

Who knows, my wife might be enjoying a STS sometime in the future.

nvbanker · March 2005

How much influence does Lutz actually have over the GM product that is on the lots of GM dealers today? Is responsible for the First Ever G6? Hope not. LaCrosse? STS? If so, it's overpriced. What is actually his? I'm not sure much of what you see out yet he can hang his badge on yet...it takes forever at GM to get a new product to market. Lutz is reputed to hate the "Art & Science" look at Cadillac, and wants to smooth it out. Yet,
Cadillac is the one brand at Cadillac that has some rep going for it it right now. Rehabing Buick with LaCrosse Pontiac with G6 is not exactly a Home Run at this point..... If these are Lutz mobiles, I'm underwhelmed.....

imidazol97 · March 2005

When I perused the new LaCrosse at the downtown dealer, the owner was telling me that Lutz had made changes in the design. This dealer was one of several who gave input on the actual car and it originally had a chrome strip across the back. It sounded like the Camry stripe theme across teh back of the trunk. But Lutz did not like that. The dealer listed off some other changes to the design that had been effected.

But I believe that design had started long before Lutz came on board at GM. You're right. This car would only have his minor changes; it wouldn't be a car he led from the tires up.

nvbanker · March 2005

Exactly what I'm thinking..... At this juncture, changes is about all I'm thinking he could probably get out. A ground up car that is Lutz inspired has probably yet to be seen. That will be interesting to see. Is the Aztek still in production?

dtownfb · March 2005

Maybe GM will sign me up for a job.

GM cannot extend the warranty on their cars. That means they would have to fix all the bad alternators, intake manifold gaskets, bad electrical switches, etc in their vehicles instead of hoping they last beyond 36k miles and have the buyer pay for it. With the way they treat their suppliers, extending the warranty is the worst hing they can do right now.

nvbanker · March 2005

Hyundai does it......

dtownfb · March 2005

To me Saturn is on life support. You must have a good small and midsize car in your lineup to thrive. Saturn does not have them. No one is going to run over to the Saturn lineup to look at some 2 door sport car and buy an ION or Relay. It's not going to happen. Saturn was expendable the day they released the L-Series.

Lutz and GM have their work cut out for them. GM just announced they would not meet their forecasted profits for the year....and it is only March! And they may layoff 28% of their white collar workers. That makes product development very tough if you don't have the engineers.

BTW, I owned a 2001 Malibu. Decent car but it had no soul. Made me regret not getting the Accord within the first year.

Here some free advice to any GM execs:
1) lower your MSRP by $3000 and eliminate the rebates. The lower price will help get people in the door and you can cheange the way you market your vehicles.
2) Kill the Saturn lineup and move that money to the Pontiac lineup so you can develop cars that give real driving experieince.
3) Shoot to be the best not what your accountants say what you can afford. It has shown in every new vehicle launch over the past 18 months that there was some serious cost cutting going on.
4) Re-establish your relationship with your suppliers. Squeezing them out of their profits only produces cheaper products. You need better quality NOW!!!! Pay them and protect them like the imports do.
5) Yes, it is about the product. If the Malibu is a mediocre car and the G6 shares its platform, guess what??? The G6 will also be mediocre. IF you build all your minivans off the same 8 year old platform, don't be surprised when it gets bashed by the media. All the other manufacturers have stepped it up.
6) Please don't forget about the North American market.

I'm sure there are other things I could add to the list. I wish Bob Lutz and GM good luck. YOu will need it. Toyota is gaining fast and they have a very very impressive lineup of vehicles. And that new Avalon is very nice.

nvbanker · March 2005

It's very hard to get this Elephant to tap dance (GM). Lutz has to be going out of his mind, trying. He's been able to adjust this or that on new models coming out, but I think he needs more time before we can count him out. Frankly, I'm not sure one man can do much for GM. Frankly, as to Toyota, thay're not gaining, they've overtaken with product already, IMO, because they aren't as big. Smaller and simpler is better. Yes, Saturn should fold into Chevy small cars.

merc1 · March 2005

"I totally disagree with you on the Cadillac STS. That car is the one that will revive the brand, and it's good reasonably good looks (not as ugly as an Audi A6) a luxurious cabin, and superb technology and handling."

We'll just have to agree to disagree here. I think the car is not only unattractive, but overpriced and simply doesn't bring anything different to this segment. So far it hasn't done anything for the brand. Cadillac's stars have been the CTS and surprisingly the SRX. The XLR and STS haven't done anything but sell slowly. A competitor like the Infiniti M45 blows the STS away imo. I think the A6 is gorgeous, grille and all.

I've seen a few SSRs on the road, though they are rare.

A Nav system doesn't mean much to me, hardly a deal breaker.

M

Bob Lutz - Is he making the grade?

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