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October 27, 2005
Passing the Corvette Baton
By Bob Lutz
GM Vice Chairman
David Hill
Dave will be missed. He’s a very creative guy, and he believes that his sole mission in life was to make the Corvette the best sports car on the planet, and he has taken it to heights none of us could’ve imagined.
Let’s face it, Corvette was always a pretty good sports car, and we revere the old Corvettes of decades past but, in all honesty, in the international context, they were interesting cars filled with character, but not great international sports cars.
With every generation the Corvette has gotten better. The new one, the C6, is David’s masterpiece. His absolute intent was to make it the best, and he wouldn’t settle for anything less. He is the perfect expression of the product philosophy of “don’t shoot to be competitive; shoot to be the best.”
Dave was often disruptive, stubborn, unwilling to take direction, unwilling to take advice, unwilling to accept constraints or limits — in other words, the perfect man for the job. He forged ahead with the single-minded dedication to make the Corvette the best vehicle there is. And he achieved it. The Z06 today is hailed around the world as the biggest bargain in supercars ever. It equals all of the European supercars that cost hundreds of thousands of dollars or euros, making it an enormous bargain.
Dave has a huge following in the Corvette community. He stays in close contact with the owners and they love him because he’s one of them — he’s an absolute Corvette nut, and I mean that in the best possible sense.
So how do you replace a guy like that? Well, optimally, you want someone who matches all those characteristics, who is equally passionate about the product. And that is Tom Wallace, who has an equal level of I-won’t-let-anything-stand-in-my-way dedication, a guy who is a very capable weekend racer with an impeccable car-guy background. He has a deep understanding of high performance cars. And he is genuine. He will be totally accepted by the Corvette community as the Real McCoy.
And by the way, Tom was Dave Hill’s personal recommendation. It takes one to know one. So I think this is going to work out well.
Posted by Lutz at 4:06 PM
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A Contrarian Viewpoint
By Bob Lutz
GM Vice Chairman
Lutz with the 2007 Chevy Tahoe
Most of you participants in the FastLane know by now that I get pretty fired up about conventional wisdom, particularly when it is wrong!
Well, it seems that ever since we announced we were bringing out our next generation full-size trucks and utilities, people seem to think it’s unwise. And, perhaps worse, even though those that have seen the vehicles have generally come away impressed, they often leave you with the impression that’s all we sell.
I’ll admit that on the surface it may seem incongruous to introduce vehicles like this, given today’s fuel prices. But, I have to tell you, these products still make a lot of sense. Let me explain.
We began developing these trucks three years ago when fuel prices were stable and historically low in real-dollar terms. Nevertheless, we made fuel economy an extremely high priority item, even back then.
This is one reason why we are still very confident of their success. In addition, we have a huge owner body, it’s a segment we think will level off at about 750,000, and we’re going to have the newest and best products out there, with substantial improvements in fuel economy. If you’re using our Displacement on Demand technology and you carefully manage when and how often you go on four cylinders, you can do better than the EPA ratings!
Let me make this clear: I don’t think anything exemplifies the state of our art today like our all-new full-size sport-utilities. We’ve made significant strides forward in exterior styling, interior refinement, vehicle dynamics, safety, quality and reliability.
And while we don’t expect to get a benefit from segment growth, we expect to grow share in the segment. That’s the plan. If your prior product has already been dominant in the market, with superb quality ratings, and you’ve got a hugely satisfied owner body, and you come out with the next generation with fuel economy over 20 mpg, you expect to do well.
And make no mistake: the new SUVs are a very important piece of our product portfolio, but these trucks are by no means the only piece of that product portfolio. They’re just one element of a full-line product assault on the marketplace, an assault that is not solely dependent upon body-on-frame trucks for success.
Our crossover strategy is clear proof of that.
Six years ago, we had none ... and our share was, hence, zero. Now, we have six different models, and hold 15% share. Four years from now, we’ll have 14 crossovers, accounting for about 800,000 units annually, give or take, representing about 1 of every 5 GM vehicles sold.
At the Detroit auto show, you’ll see the first of our new family of midsize crossovers. And I think you’ll agree when you see it, it takes another big step toward top-of-segment status. This is not one where we’re merely entering the segment so GM will have an entry. This is one where we aimed to be the best.
They’ll have the spaciousness of fullsize SUVs, with more cargo and passenger flexibility, and better fuel economy than midsize SUVs. They’ll be precisely constructed, with a balance of ride and handling unsurpassed by any SUV. And they will be highly differentiated and have unique, beautiful designs.
So, there’s a little dose of unconventional wisdom for you. I’m looking forward to hearing your thoughts.
Posted by Lutz at 5:22 PM
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How We're Improving Our Global Product Development
By Bob Lutz
GM Vice Chairman
Despite the current turmoil in the auto industry, I want you all to know that our long-term commitment to building exciting cars and trucks with high quality and dependability has not changed and will not.
As I told the Automotive Press Association today, our product lineup is getting stronger and stronger, and this is just the very beginning of our newly reorganized global product development program. Here's how we're doing things differently:
First, we now have people in place with global responsibility for design, engineering, manufacturing and product planning, and, starting January 1, we will have one single global design and engineering budget. That has never happened before at GM and, believe me, that was a big hindrance to previous efforts to produce component sets, architectures or products that are global in scale. No longer will one region be forced to turn down a program because it doesn’t have the budget to pay for it. One budget allows much greater flexibility in the application of product programs in all our various regions.
What’s more, it applies to not only to our material resources, but also to our human resources. Let’s say, hypothetically speaking, one of our regions for whatever reason has to lay off 50 engineers because it doesn’t have enough work for them or it can no longer afford them. At the same time, maybe another region is in need of 50 engineers. Under one global budget, we’d keep the engineers we already have, no matter where they are, and through the magic of information technology we can bring the work to them, wherever they may be.
Second, by coordinating product development work around the world, we’ll realize the economies of scale that a company the size of GM should. Our 12 engineering centers will be knitted more closely with one another and with our 11 design centers, all working together in lockstep, sharing their knowledge and resources in real time. This type of structure puts us more in line with the way successful automakers should be set up today.
In short, we expect a faster global portfolio turnover with less cost, allowing us to maximize profit on a global basis. We expect a reduction in our architecture count over time of 50% as we introduce more converged architectures replacing the regional architectures we have today.
For example, as we develop our new global mid-size architecture, which will replace such vehicles as the Opel Vectra, Chevy Malibu, Pontiac G6 and Saab 9-3, we’ll realize significant savings as a result of this new system. We’ll move from three closely related regional architectures to one global architecture serving nine different models in all four of our regions. We expect a 40% reduction in our prototype builds, a 20% reduction in material costs as a result of the common components, and 25% reductions in both engineering costs and overall investment. That one program alone could save us more than $1 billion over the course of its lifecycle. And ultimately that’s how success will be measured… how much we save, and how much we earn.
The third component to our new system is the fact that we’re putting in place global development centers for all our architectures in regions that have expertise for certain vehicles, and they will shepherd the architectures from cradle to grave. For example, North America will take responsibility for trucks and utilities and derivatives, Europe for midsize cars and Asia for small cars, sub-compacts and the like.
As we evolve, and implement this system fully, we will continue introducing brand new cars and trucks at a rapid clip. We have great stuff in the near-term pipeline — and even more to come.
Posted by Lutz at 4:05 PM
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Podcast: GMC Yukon and Yukon Denali
GMC General Manager John Larson stands with the new 2007 GMC Yukon Denali.
In this podcast, FastLane radio host Deb Ochs interviews John Larson, GMC general manager, about the unveiling of the 2007 GMC Yukon and Yukon Denali, revealed today. Larson talks about the new features, fuel economy, gas prices and SUV sales, particularly in California.
Download the MP3 (5.48 MB)
Posted by Editor at 4:35 PM
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