Bob Lutz is probably the most glboal automotive executive. He retires 1 July from Chrysler in the USA, after a career that saw him at Ford, GM and BMW in Europe, and at Ford and GM in the USA. He was born in Switzerland and served nine years in the US Marine Corps.
'I think I am truly the prototype mid-Atlantic man,' he said in an interview with Peter Brown, editorial director of Automotive News Europe.
He has not decided what to do next.
Describe the auto industry 10 years from now. DaimlerChrysler is a really critical event. Are we going to see things like DaimlerChryslerNissan 10 years from now?
Yeah. I think we are going to see a new era where nationality is no longer a barrier and where it's economic realities that drive mergers as opposed to nationalities.
I would say that DaimlerChrysler has established a model. There are going to be others. I think it's a good thing.
If you envision a world 10 years from now that's linked by a single capital market - where the so-called SEC regulations are the same all over the world, where capital flows freely and where companies can link up between Asia, the former Soviet Union, and the former Eastern bloc, Europe, Latin America - you can create these combinations which are not only best for shareholder value but ultimately best for the consumer.
I think that is a great vision for the future. Business has always been ahead of the politicians.
And it's a good thing, because a world that is all linked by businesses - how are we going to make war?
What advice would you give to your successors at Chrysler or at DaimlerChrysler to see that product freedom continues to be there?
My advice to both would be to focus on the strengths of the other and try to make them your own. But do not ever try to make the other company conform to your own image. I think Daimler can benefit from Chrysler's expertise in rapid product development, intuitive thinking, etc. Chrysler can certainly benefit from the solidity, that tradition, and frankly from a lot of the parts bin of Daimler-Benz.
What was your favorite product program in your Ford period?
The Ford Sierra in Europe.
Ford of Europe had limited investment potential at the time, and all the competition was going to front-wheel-drive. We had to come off the Cortina platform and basically stick with rear-wheel-drive for another generation because we couldn't afford the investment for transverse, front-wheel-drive transmissions in manual and automatic.
We were able to do a new independent rear suspension. My argument at the time was:
Look, the BMW 3 is rear-wheel-drive. The small Mercedes are all rear-wheel-drive. Why should we be ashamed of adopting the solution that is preferred by Mercedes and BMW?
That product program was interesting to me in a number of ways.
It was make do with the investment you have, even if you are defying the conventional wisdom of everybody going front-wheel-drive.
The second was to find your efficiency through aerodynamics as opposed to engine placement and internal friction reduction. That worked.
The third was that I think it paved the way within the Ford Motor Co. for an attitude of more daring, and let's really step ahead of the rest of the world aesthetically as opposed to dragging our feet. I think it gave the company the courage to then do the original Taurus and Sable, which was equally controversial in the Ford Motor Co. but which turned out to be a kind of a watershed.
That has established, I think forever, Ford's credibility as a producer of great passenger cars.
Characterize your BMW years, 1972-74.
It was mainly a reaction to the frustration of working for GM in Europe, which was satisfying for a young person, but at the same time it was restrictive.
At the time, BMW in Europe was pulling the Chrysler Corp. They'd gone from quasi-bankruptcy to suddenly being the hottest, the most exciting, the best design, the fastest.
At Opel in 1965 or 1966, we had a management meeting where all of GM's senior management attended and we had this slide presentation on what things are like in Germany. It was, 'In this segment it used to be dominated by Ford, but now BMW is surging in. In the lower end of the high segment, it used to be all the small Mercedes-Benz, but now BMW is surging in. In the sporty smaller car segment it used to be this, but now BMW is surging in.'
Finally (GM Chairman) Fred Donner got up and said, 'What is all this talk about BMW, BMW, BMW? Why are we even talking about a company like that in a GM management meeting? I never heard of BMW before I came over on this trip!'
I waited for him to settle down and I said, 'Mr. Donner, BMW is a small German company that has demonstrated incredible vitality and they seem to really have the pulse of the German motorist in this post war era of high prosperity, and they are a great company.'
I was head-hunted away from GM by BMW as head of sales a few years later.
Did you learn anything there?
In the first place I learned that there's a great deal of value in working for the ultimate corporate headquarters as opposed to working for a subsidiary or a subsidiary of a subsidiary.
And if you are actually the worldwide head of sales and marketing for the corporation, there's no corporate staffs to lean on.
You realize for the first time in your life that the buck stops here. You're it. That was a powerful lesson for a young American who had been embedded in the GM hierarchy and convinced I could do it better if only they'd give me a chance.
All of sudden I had the chance and it would be, 'Mr. Lutz, what exactly are we going to do about our distribution in the USA?' I realized that I couldn't say, 'That's an interesting question, why don't we ask marketing staff?'
The other great lesson was that you don't need a cast of tens of thousands to get anything done. BMW is a very small company. They relied heavily on their suppliers way before virtual enterprise became even a phrase in the USA.
I remember one time I said to Alex von Falkenhausen (head of testing and development) that wouldn't it be nice if we had a V-12. Mercedes is rumored to be doing a V-8. Why don't we leapfrog them and do a V-12? We could use two of our V-6s just do a new block and a new crank, but all of the vertical parts would be the same.
Von Falkenhausen said, 'Interesting.'
Three weeks later, he said, 'Can you come down after lunch?' I went down and here in this engine test cell was this 5.0-liter V-12, and von Falkenhausen put this five-mark piece up on the timing case cover and left it, and the five-mark piece just stood there as this engine was turning in the test cell.
That was only about three weeks after I made that comment at lunch. I thought, 'Holy smokes, the head of sales and marketing makes a random comment at lunch and three weeks later here is an engine running in a test cell.' I thought this is what America can't do.
Are you an American boy or a Swiss boy?
There are no conflicts between being Swiss and being American.
I find that when I'm in Europe, I tend to be more American because I fight European preconceptions about what the US is like. And exactly the reverse is true when I'm in the US. Truly my soul is somewhere in the middle of the Atlantic Ocean.
Is there any chance that in retirement you will be a European?
No. Fundamentally, I spent my teenage years in the USA. I served in the US Marine Corps. Patriotically, I feel American....
Anything that would trigger a change in location would be out of the question. I am not going to leave Michigan. No way.