Bob Lutz, blunt and creative, to leave GM

Robert Snell / The Detroit News

Bob Lutz, the product guru who led a design renaissance at General Motors Corp., will retire this year, amid the weakest U.S. sales market since the 1980s. Lutz leaves during a slump that kept consumers from the cars he conceived, vehicles that were occasionally as bold and colorful as the auto legend's language.

Lutz, 76, one of Detroit's most outspoken auto executives whose second stint at GM was marked by several award-winning designs, is leaving his role as global product development chief and will become vice chairman and senior adviser to CEO Rick Wagoner on April 1. He will stay with the company through the end of 2009.

He has held senior positions at each of Detroit's Big Three automakers and has overseen some of the industry's most daring vehicles, from the Dodge Viper sports car to the Chevrolet Volt extended-range electric car, scheduled to debut in November 2010. But he won't be at GM to see it hit the streets.

In an interview with The Detroit News, Lutz said government oversight attached to the $13.4 billion federal loan package helped convince him to retire, and that it "just made it real hard, increasingly hard to get up at 4:30 in the morning and get really excited about what I'm going to do today."

He played off the Tommy Lee Jones movie "No Country for Old Men" in explaining his decision. "Call this 'No Profession for Old Men.' I've probably got really 10 to 13 years of doing the things I like to do. I don't think I'll be flying military jets when I'm 90."

The timing surprised analysts, noting the Volt is Lutz's crowning achievement and that GM is entrenched in drafting a viability plan as part of the loan package. The departure carries symbolic significance, sending a message that executive ranks will be changing as GM eliminates 31,000 workers in the next three years, said David Cole, chairman of the Center for Automotive Research in Ann Arbor.

"If it's business as usual at the top and you're expecting people at the bottom to make major sacrifices, that's a tough sell," Cole said.

Timing makes sense

GM announced that Tom Stephens will take over for Lutz and report to President and Chief Operating Officer Fritz Henderson. Stephens, 60, is currently executive vice president of Global Powertrain and Global Quality.

GM also will restructure its Global Powertrain group and create a leaner, more efficient organization, the company said Monday.

"Bob Lutz was already a legendary automotive product guy when he rejoined GM in 2001," Wagoner said in a statement, "and he's added to that by leading the creation of a string of award-winning vehicles for GM during his time here."

Yet his departure raised questions about "whether the schedule of the Volt is still on track," said analyst Aaron Bragman of IHS Global Insight. "The timing is a little unusual given the fact GM is in crisis mode."

Lutz, whose salary was $1.75 million before taking a 20 percent pay cut along with other top executives, addressed the timing in a blog post on GM's Web site.

"When I do retire at the end of this year, the Volt program will be well on its way to launch and I'll feel the same sense of pride and accomplishment that the entire Volt team will feel when the first ones are silently rolling off the assembly line," he wrote.

The timing, which comes after GM's sales last month plunged 48.9 percent and 22.7 percent last year, makes sense considering the strong team that will remain, including Stephens and design chief Ed Welburn, analysts said.

Lutz will not receive a "golden parachute" when he leaves though his pension benefits are worth millions. Lutz will receive $1.13 million a year for the next five years and a $15,700 annuity for the rest of his life, according to a 2008 regulatory filing.

Those numbers likely will change once GM files its 2009 proxy statement. Lutz will not receive retirement health care coverage from GM.

A focus on good design

The retirement marks the end of a storied career for Lutz, a former U.S. Marine Corps fighter pilot whose risk-taking and larger-than-life personality harkened to the auto industry's infancy. He brought a "car guy's" enthusiasm to the executive boardroom and let designers bring inspired creations to the marketplace, Bragman said.

Lutz said his GM legacy will be three things: Getting the automaker refocused on product and product excellence, globalizing product development, and re-establishing the importance and pre-eminence of design.

"Getting General Motors to where we were in the '50s and '60s, when our cars were better looking than anyone else's," Lutz said. "We're getting back with a vengeance."

Lutz started his auto career at GM in 1963, holding several senior positions in Europe until 1971 when he left for a three-year stint at BMW.

He then spent 12 years at Ford Motor Co. in several senior positions before joining Chrysler Corp in 1986. Lutz served as vice chairman during a 12-year tenure and was responsible for the automaker's global car and truck operations. While at Chrysler, the automaker produced the Viper, the PT Cruiser and the cab-forward Dodge Intrepid and Chrysler Concorde.

He was chairman and CEO of battery maker Exide Technologies before rejoining GM in September 2001. Lutz revamped GM's corporate culture by ordering the design group to report to him instead of through finance and engineering.

That was a key change, said Tom Kowaleski, who worked with Lutz at Chrysler and GM, handling product and global communications.

Lutz had string of hits

When he returned to GM, design wasn't the first priority. Instead of creating compelling designs, GM started with engineering data, visibility requirements and a list of customer desires before involving designers.

"It's like having an ugly, lumpy package and then gift-wrapping it," Lutz said Monday.

His design approach drew mixed reviews early on.

The classic car crowd criticized the Pontiac GTO but Lutz had a hit in the Chevrolet Equinox.

"The first sort of 100 percent Lutz design was the Pontiac Solstice," a two-seat roadster introduced in 2005, Cole said. "That's where he had his imprint."

Then, Lutz had a string of hits as GM's Chevrolet Silverado full-size pickup won Truck of the Year and the Saturn Aura midsize sedan took the top prize for cars at the 2007 North American International Auto Show.

Last year, it was the Chevrolet Malibu, a relatively inexpensive car with a compelling design that bucked GM's slump as the car's sales rose 39 percent for the year.

Lutz also pointed to the Cadillac CTS and Buick LaCrosse as evidence of GM's design renaissance.

And last month, Lutz won praise for conceiving a Cadillac that used the battery technology of the Volt. The Cadillac Converj won the EyesOn Design Award for best concept vehicle.

"Really sporty, really sexy and sleek with a very refined interior. That was his vision," Welburn said.

Lutz regrets GM's delay in building hybrid vehicles, which could have helped transform the Detroit automaker's image as building only gas-guzzling sport utility vehicles.

"I'm sort of sorry now that I was among those who felt no hurry on this stuff, that it doesn't really save money for buyers, that it's tough to recover an investment on a vehicle like this," Lutz said. "I'm sorry that one got away from me."

He did not, however, rule out a return to the auto industry.

"Who knows," he said. "Why not?"

Detroit News Staff Writer David Shepardson contributed to this report.