Bob Lutz on CNBC
In his usual shoot-from-the-hip style, GM Vice Chairman Bob Lutz discussed GM’s liquidity crisis, the need for federal bridge loans and the future of the domestic automotive industry during an exclusive interview with CNBC. - Will Stewart, blog editor.
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Bob,
The fuel “crisis” may have caught you unaware, but somehow I doubt you. The entire world knows the need for more fuel efficient vehicles and yet you have stayed with gas guzzelers. Market demands in the United States changed a long time ago but GM didn’t keep up with the times. It was so easy for GM to bring back the Opel line to the United States with it’s 56 mpg models. You would have locked up the small car sales and not be in financial woes despite the world economy.
In regards to the Volt, forget about lithium ion batteries and use super capacitors instead. You will be able to start Volt sales in 2010 with a sales price less than 30K, the ability to recharge in less than one hour, and no battery enviromental problems. If you are going to make electric cars, you need electrical engineers with no auto experience as they will think outside the box.
If only politicians could handle grilling interviews as well as Bob Lutz. Excellent job.
Edvard said: “If only politicians could handle grilling interviews as well as Bob Lutz. Excellent job.”
Yes, Bob does do well doesn’t he?
You do know the reasons, don’t you? First, he’s a former Marine. Second, he has nothing to lose or prove. He doesn’t need to weigh this words carefully, or worry about some little remark getting twisted, or coming back to bite him. He can comfortably retire any time he wants.
It’s refreshing to hear someone so candid, and like you, I wish more politicians did the same.
Just realized I said “former Marine.” Of course there is no such thing. Once a Marine, always a Marine.
Hi Bob,
For your interview that was probably watched by millions of people – the background vehicles should have been a couple of future GM models to showcase GM’s ability to deliver leading-edge products – not a couple of Pinninfarina designed euro models from the 1950/60’s that are part of your collection – no offense to your choice of cars.
I’m glad Jackie Knight also sees the logic of bringing the Opel line to the States – the new Opel Agila with the commonrail diesel engine gets 55 MPG, has seating for 5 people and most important emits 120 grams of CO2 per kilometer – meeting the future European benchmark NOW.
Rebadge it as a Saturn which already has several Opels in the lineup or make it a Chevrolet which doesn’t offer any diesel car options at all.
Yes the Aura was named Car of the Year but you equip these cars with engines that date back to the 1960’s rather then offer customers engine choices that they have in Europe.
I will never forget buying a 2000 Pontiac Montana with a 3.6 liter engine and when I first started the van in the morning I was certain there was something wrong with the engine – it sounded like a bucket of bolts – the dealer later informed me that is what they refer to as GM piston slap – the piston is literally hitting the cylinder walls until the engine warms up and it expands.
You don’t see the Japanese or the Germans using these type of motors in their vehicles.
Many of the problems that GM is experiencing now can be traced to previous owners like myself who sit on the sidelines and/or buy other makes and models.
I travel to Europe on a regular basis and will say the Opel Division is probably the best I have seen in the world in terms of design and quality and value – it has to be this way in order to be a viable product in Germany. The US GM divisions should take lessons from Opel.
Jackie Knight,
Sorry but I have to step in and make some corrections because you made some statements that aren’t exactly dead-on. First of all, there’s a reason we don’t get turbodiesel cars like they have in Europe: They don’t meet US air quality standards. Secondly, while I myself actually drive a Prius, most of the GM cars I’ve driven on trips as rentals got 30MPG or more, and we’re talking full size Pontiacs and Chevys. So it isn’t like ALL they made or make are gas guzzlers. Its accurate to say that the Big Three sold A LOT of big SUVs and trucks, but to say they didn’t offer fuel efficient models is inaccurate and more to do with consumer preference at the time.
Lastly, GM had job listing for electrical and powertrain engineers on their site for well over a year, so its obvious they did in fact hire the right people for the job of engineering the Volt. Additionally, the Capacity discharge technology isn’t up to the same level as Li-ion technology. Its a safer bet to use proven technology in a new car using a new powertrain. I think they’ve definitely been thinking outside the box. Not even Toyota has anything like it coming out.
If you did not have an opportunity to see this Opel Agila – you can watch a 2 minute video clip with Uwe Muller – the chief designer – going over the styling of the car at the Frankfurt Motor Show.
http://www.youtube.com/watch?v=jUZkYtppHdk
RE: Jackie
GM makes more fuel efficent vehicles than any other manfacturer. GM offers over 30 vehicles that get 30 MPG check it out for your self. see GM facts and fiction. GM also makes more segment fuel ecomony leaders than any other manufacturer. Please stop repeating these same old false and misleading statements. If you have perfected super capacitors, you should apply at GM. It is my understanding that they are still hiring electrical engineers to solve the problems associated with advanced propulsion tech. An unoffical expert like you should join the team to develop the vehicles that will end our dependance on foreign oil.
Mr Lutz you are the one to be stepping up with your attitude and vision for GM and take the riens for the next four years and tell the govt. were to stick there money and become the best and greatest ever, if anyone can do it only YOU can Bob.
bluebaby
Jackie Knight,
Last I looked LiPo batteries can be charged in very short time perhaps as short as 15-20 minutes. IF you are an engineer.. run the numbers on power input needed to do that for a car capable of 40 miles at 45 miles/hour and using about 50 HP. You’ll find the power requirements are off the charts…. I’d be willing to bet that at 220 V it would take 400 plus amps or more (I have the numbers somewhere at home on it).
Super capacitors are a solution but their cost and energy density is still not where it needs to be. Plus the newer batteries seem to get closer and closer to functioning like a capacitor. LiPo batteries use a polymer which last I looked isn’t’ to different then the electrolytic material used in capacitors (though I could be wrong… feel free to correct me).
Edvard, Doug,
I personally think Mr. Lutz makes a fool of himself when he speaks. He shows how little technical knowledge he has. He just sounds like a salesman with no real technical knowledge or understanding. I’d love to hear him explain why they make the decisions they do and offer real technical explanations of them.
He still might be able to pull it off but I think he’s missing what he needs to do, to do that.
Ted Lewandowski,
Why bother rebadging them at all. Just nice interiors in them that are on par with Malibu and CTS and sell them here. Thats what’s wrong with the Astra.
Also the engine in the Aura… if you are referring to the V6 is not a design from the 60’s … the design started in 1981 and has evolved quite a bit. the original 2.8 Liter (as far as I’m aware of) made 120 HP and offered 28 Old MPG… today that same engine makes 220 HP from 3.6 Liters, 240 HP from 3.9 Liters… AND the new engine used in the G6 and CTS makes up to 300 HP. I think after driving the V6 in the G6 (same as the Aura) I say its not bad at all. I do agree that there was a lot of piston slap in the 1990s but there’s a reason for it. That said you have to realize that the 3.6 in the Aura is a pushrod engine, and GM probably makes one of the best pushrod engines in the world (the Small block V8). Argue all you want GM’s engines lately aren’t that bad. Their interiors are a different story.
What makes a Dual Overhead Cam engine better? Look around GM they make quite a few of them. The New CTS engine is one, the new G6 engine, the new Cobalt engine, the Northstar…. yet the Pushrod engines seem to deliver comparable power, performance and emissions… sorry I’ve looked into the issue and there aren’t many things a DOHC engine has that a pushrod can’t do.
Additionally if you look back the LT5 engine was probably one of the most advanced V8s in its day.
I think they should flat out replace Chevy, and Pontiac with Opel. They best fit current market demands for european styling. I’m not sure why GM holds on to their past so much… its costing them a lot of money. Reinvent yourself and move forward stop trying to go back to the good old days.
Edvard,
I agree to a point. my 1990 GM gets 28 measured MPG on the highway… around town is a different story.. BUT today 28 MPG isn’t 30… and 32 (what our Olds Intrigue and Park Avenue get) doesn’t cut it. 34 and 36 are the new sell points in my opinion.
One thing I want to point out is that the public has little idea of the laws of physics by which engineers are constrained. 100 MPG is not possible given the mission requirements of most cars… people need to wake up and realize that… 50 MPG thats probably doable… at least VW has succeeded or gotten close in the past.
Idont’ see why the energy storage technology matters today. With modern power switching devices I’d think a simple software upgrade can allow a vehicle to run almost any type of storage device provided the voltages match… Did I miss something here? The only difference between a NiCd and a LiPo is the charging technique and heat management… and of course weight and cost…..
The architecture for the volt is promising.. though I’m not sure what so ground breaking about it. its just moving power around we’ve been doing that for at least 10 years now. I remember working on projects like that during my undergrad work.
mike concerned taxpayer and USA supporter,
Show me the engineering reports. Show me the test data that shows fuel usage and the conditions of the test. I’ve never gotten above 32 with any GM product I’ve driven.
I don’t think the rest of the country is ready to rid itself of foreign oil usage. I don’t think its possible right now because to many petroleum products are used that can’t be easily made other ways.
I wonder what positions are available at GM these days…
In response to Edvard comments – the Euro 5 Level Emission Standards are much higher than the California emission standards – largely regarded as the toughest in the USA (not air quality as you mistakenly state). There are several makes and models that conform to 50 State emissions – the Mercedes-Benz Bluetec and the VW Jetta (btw, just voted the greenest car award) and Toureg (and soon Audi and Porsche models) without any modifications. In fact the only delay in getting these models here is that our diesel had much more sulfur in it then the tight parameters that these commonrail engines require – it is now on par with Europe – less than 50 PPM.
Plus diesel engines are widely acknowledged to emit LESS CO2 then YOUR Prius and MATCH the MPG of your car and cost thousands LESS.
Saw Bob’s appearance on Lou Dobbs just now- brilliant stuff. His point about welcoming a “car czar” as a way to finally show Washington- from the inside- just what the domestic industry deals with in terms of regulatory hurdles is right on the money. Too bad he could not have been the one testifying before Congress-
Oh, yes, GM must be SO PROUD to have a Chairman who doesn’t even believe carbon emissions are responsible for global warming.
People like Mr. Lutz are THE REASON that 60% of the American public would rather see GM fail than to receive a bailout.
People like Mr. Lutz who believe global warming is a “total crock of sh**” are NOT the people who should be responsible for the public’s money. Taxpayers should demand Mr. Lutz lose his job.
But what was up with Lutz on Fox and Friends this morning?
He throw out some numbers about Civic and Corrolla sales to make the point that small cars aren’t selling with cheap gas.
The problem is, the numbers he threw out were just plain wrong- I looked them up in Automotive News, as Lutz instructs in the video.
Further, his bandying on about $1.50 gas is horribly myopic- he sounded like a textbook case of what President-Elect Obama calls “shock and trance”- the moment gas prices drop, we all go back to thinking they’ll be low forever.
I try to like Bob Lutz, he brings so much to the table, but then he goes on rants like these and I lose all confidence in him.
Mr. Lutz, Thanks for the strong support of Rick Wagoner. Rick has done more for the future of General Motors than any CEO could have under the circumstances. IT is the sudden Spike in gas prices and the collapse of the credit markets that caused this problem.
Is this the identical miscalculation made with Ethanol and breaking industries supply ability during the food supply crisis? The idea that a ‘plug in grid car is good’ should be put to rest and companies installed that have to ethically supply the electricity through the ability to produce it. Even if all the government energy intiiatives were launched tomorrow the industry of electric vehicles could create another resource disaster before the infrastructure is upgraded. A sense of conservatism may not sell cars but trying to balance some basic equations might turn a new market over to the GM products because of the added conservation through critical infrastructure management.
Nate,
I actually agree with almost all of what you said about the original 2.8L being updated substantially, and that pushrod engines aren’t obsolete like a lot of people think. I also agree about the 100MPG cars that are “so easy to build”. Like you said, most people don’t realize there isn’t a “fuel economy” knob, that we just decide how many MPG’s we’re going to give a certain car. It’s physics. And yes, charging a huge battery in 15 minutes would take an enormous amount if current, which the grid (or your house) couldn’t handle.
One question I have though, which is more to the whole population than just you, but you say 28 MPG isn’t 30 or 32, and you think the new target is 34-36. Assuming you drive 15,000 miles/year, driving a car that gets 28MPG would cost you $2142 assuming $4/gal gas. Driving a car with 34MPG would cost you $1764 a difference of $378. My thought is, $378 shouldn’t break you if you are spending $10k+ on a car. Now if you are strictly for the evironmental benefits of a higher MPG car, then, well there’s no arugment there, but I think most people think of how much money it will save, which in my opinion, isn’t much.
Ted,
As much as I would love to have diesels here (I’m an engineer working on diesels), the US is still a tougher market for diesels. Diesels are more expensive, and with all the aftertreatment they require to meet emssions, that also hurts fuel economy, which starts to take away their cost benefits. That’s not even mentioning the higher cost of diesel fuel now. Also notice most of the vehicles you listed are larger, more expensive vehicles…my feeling is because they are using that to hide some of the cost of the diesel powertrain. I think the market for small 50+MPG diesels will remain small for a while unfortunately. I think that is why manufactutures are reluctant to make them legal for US roads (crash, emissions etc) for a small sales volume. Hopefully it will turn around, because it would be nice to have a small diesel here. And just a small correction, it isn’t the commonrail that needed the ultra-low sulfur, it’s the aftertreatment system.
Ted Lewandowski,
Euro 5 is actually 6 times less stringent than the upcoming BIN 5 American standards. Secondly, our Prius was $23,000. My Wife’s Mother has a 2003 Jetta TDI. It did not cost thousands less and in fact cost $3,000 more. While it does get about the same economy, the cost of Diesel overrides the cheaper cost of Gasoline.So while it does get around 50MPG, filling it up costs a lot more.
That and so far, the VW has proven to be a piece of junk with amazingly costly repairs. In fact, I was on the phone with her last night because the engine temp warning buzzer keeps coming on for no reason. You couldn’t pay me to own one of those cars. The Mercedes models will definitely cost a lot more than $23,000, and if the luck I see people have with European cars is consistent with this car, it too will be in the shop to repair countless electrical and mechanical gremlins.
I’d much rather have my reliable Toyota over some over-engineered problem prone European car any day.
Tim,
You offer a great point. $378 doesn’t break you.. but its like cup holders in a car. No one needs them yet its a make or break it item. If I had the choice between two nearly identical cars and the one offered 35 MPG and the other 28 I’d take the 35 MPG.
Also keep in mind that small difference is a huge savings for the whole country (why it matters so much). And also for the people I know that are ultra conservative a penny saved is a penny earned.
The real issue though is that we use 80 million barrels of oil a day. As my numbers come out thats over 10 times the maximum capacity of our electrical generation network in the US. That tells me that US energy usage is way out of control. And I don’t know about you but I’d like to leave something for future generations to enjoy. A trip to the store that takes 10 minutes less isn’t worth burning through the world’s resources for. I remember in my home growing up that people used to conserve and make the most out of everything they had. Now as a country we waste way to much. Just my opinion.
By your mostly correct analysis the cost savings really doesn’t make sense. I drive a used car right now because I can’t see shelling out $500.00 a month for a new car payment. I pay about $1000.00/year in upkeep on my car if that. I think this in itself is why GM is having such a hard time selling new cars. I’m a potential buyer but I look at new models and beside shiny new paint I don’t see much that makes me want to spend $500/month. The CTS is one car I’d consider but when I priced the financing it was more then I thought it was worth. If GM made a smaller CTS like car I’d probably seriously consider one.
Its not all about costs though. If it were none of us would drive. To me its about doing what is needed for the country and myself. For this reason I think GM being loaned without fixing their problems is a waste of national resources.
I’m telling you now, the CTS is AMAZING! ,we own one, just 2 months now and we love it, test drive it, you will be amazed the quality and precision that car has.
bluebaby
Glad to hear that GM has hired bankruptcy counsel. Sad as it is, that is EXACTLY what GM needs – a Chapter 11. I know you can solve your product mix issues, and your quality problems (Come a long way already.), but if you think you’ll be able to solve your union problems – current and legacy cost issues – with the “expert assistance” of Pelosi and Reid, you might as well start building Vegas and Cimmarons again. You NEED a Chapter 11 to deal with those issues, NOT some fools who are deeply indebted to unions (even though Pelosi keeps HER vineyard non-union). Good luck
ahem….the US already has a pure Opel model, under the Saturn brand name, the Astra. Unfortunately and typically of GM, they failed to advertise the car. If nobody knows it’s there, nobody will come. I urge you to actually go to a showroom to see one for yourself, then you will actually see the Opel difference.
The Astra is currently one of the highest quality (Belgium built by Opel and rebadged as a Saturn) models on Saturn showrooms today. It gets over 30mpg and very well built. Not enough people know about this car for lack of marketing which is a prime reason that Saturn has not met GM’s fiscal expectations.
Saturn has one of the highest Owner Loyalty bases of the GM divisions. Proof is in the pudding. Please visit http://www.saturnfans.com and sign the Save Saturn Petition !
To either the CEO or Marketing manager of General Motors:
Dear Sir:
Come on and wise up. For most people, buying an new automobile is the second largest purchase that they mak in the lifetime. So why not follow what the credit card industry has been doing for years and provide insurance to cover their car payments if the person loses their job. This would free up so many people that are currently in need of a new car but they are waiting to find out what happens with this economy. You start this program and you will be selling more cars than you can keep up with. Start an advertising campaign on this right now and you will be selling cars by the end of next week. Isn’t this better than filing for bankruptcy and/or begging for money from congress?
Sincerely;
Jeff Dagnan
Jeff Dagnan
“The Astra is currently one of the highest quality (Belgium built by Opel and rebadged as a Saturn) models on Saturn showrooms today. It gets over 30mpg and very well built. Not enough people know about this car for lack of marketing which is a prime reason that Saturn has not met GM’s fiscal expectations.”
Now if they just marketed it as an Opel. German-engineering, built by old-world craftsmen for discerning consumers seeking quality in a car designed to be equally at home on the Autobahn or the narrow, twisting streets of quaint European villages.
SaturnBob,
I agree the Astra is a nice car, but after seeing one at the local mall… I think GM did their normal and left it unfinished. They dont’ offer a top of the line premium model of it. Not like they do on the Opel. I think the Opel version of it looks much nicer inside. Again the typical blunders of GM. If they brought the Opels over 100% as is. They would be fine. But they always cheapen them and change things and weaken the car’s appeal.
Jeff Dagnan,
Insurance money comes from somewhere. Wasn’t it AIG that had to be saved recently? What happens if our economy takes a dive and the insurance company has to pay out… who is going to bail them out?
I think your logic is quite flawed. But feel free to explain.
“I think the Opel version of it looks much nicer inside. Again the typical blunders of GM. If they brought the Opels over 100% as is. They would be fine. But they always cheapen them and change things and weaken the car’s appeal.”
——————————————————————————————————
Memo to GM: Sell Opels in North America as Opels
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Bob, I would love to see you give American buyers the best of both worlds. A car that get’s 25-35 miles per gallon but still has performance. Can we create the technology to push a button to turn off cylinders or deactivate a blower to increase efficiency when we are putting around town but hit the performance button when we want to go.
I think American buyers would love the option to do both…can it be done, I have no idea.
Call me crazy.
GL
“A car that gets 25-35 miles per gallon but still has performance.I think American buyers would love the option to do both…can it be done, I have no idea. Call me crazy.”
Greg,
You’re not crazy, it can be done. In fact, those cars already exist. 25-35 miles per gallon is not actually much of a goal. I once lived in Germany and owned a Mercedes 300TD. With its turbo-charged diesel engine, it got better mileage than you ask for, and easily cruised at 180 kph (112 mph) on the Autobahn.
Dear Bob
You probably wont read this or ever see it. I am long time GM fan I have spent over $100,000 since 04 on GM products. I own A 69 Camaro an 87 Trans Am an 01 Saturn and lastly a 2007 Trailblazer SS. I think I am done buying GM products. My trailblazer has been into the dealer 4 times for the same issue each time they fixed something, each time it broke down again. Things break I understand that the third time we were given the truck back and told you have to wait till it breaks down again, to me that s not ok from a company as great as GM. So we did and it broke down again. this time they say its the starter. I have a 1 year old and I am nervous about getting stuck again we no longer trust the truck, I looked into having the truck repurchased and they said no thats fine but they didnt seem to care at all and offered me nothing not even a free oil change. I feel very disapointed and I expected more from GM not the same we dont care attitude you get everywhere else these days. I was planning to purchase a 2010 Camaro, now I will look at the Challenger and the Mustang. I just wanted to let you know whats going on out there. What car I trust my family to is a big thing for me, and we no longer trust the Trailblazer. very unhappy with our experience and no one seems to care at all.
Mike
Levittown ny
“My Trailblazer has been into the dealer 4 times for the same issue each time they fixed something, each time it broke down again.”
Mike,
This can’t have happened.
You may have not seen it under another subject in this blog, but GM is a strong believer in the philosophy of D.I.R.T.F.T. — “Do it right the first time.”
I hope GM pulls out of this. I took a leave from the company to pursue a Masters degree (educational leave of absence) and was told I could not return due to downsizing. In full disclosure, I am a career changer and my management does not have any contacts at GM Marketing. I worked at GM for 7 years and convinced many of my friends and family to switch to GM vehicles. I got nothing, just told I could not return at this time. I feel betrayed. I would love to talk to someone in Marketing, or even to Bob Lutz, about my desire to return.
Mr Lutz may be you can get GM’s attention .Its time to start putting the shifter in the floor in the p/u trucks,are you listenning.What is your peoblem,everyone else is doing it.I am not going to wait much longer for a truck with a shifter in the floor.Ford is making them Toyota is making.