Bob Lutz

Among the higher echelons of management of auto manufacturers, I believe Lutz is a near anomaly. He knows the auto business from the top, and he is a consummate car guy.

He grew up in Europe but became an American, and was a Marine Corps aviator. He’s held senior positions at Ford (Germany), Opel, BMW, Chrysler and his last station, GM.

He is an avid car enthusiast, who also flies his own L39. Just some of the cars he was a force in developing are the Opel GT, the first BMW 3 and 6 series (late 70s) , and the Dodge Viper.

An industry joke was that when Lee Iaccoca retired from Chrysler, he “picked the wrong Bob” as his successor.  There was a lot of acrimony between Bob Lutz and Lee Iaccoca.

Iaccoca picked Bob Eaton as his successor.  Lutz had helped transform Chrysler into a lean creative company. A former Chrysler employee talks about this.

We have all seen the results of the downward slide that began almost immediately…that has been far more than adequately chronicled by Evan Boberg in his book. The empire building, so long ridiculed as a management style under Lutz, had started back in full swing almost before the ink was dry on Eaton’s employment contract.

At this point, a group of formerly dedicated Chrysler employees made the decision to leave, all within 24 hours. The top twelve design engineers all quit Chrysler in protest of Eaton and his policies. 

When Chrysler was sold during Eaton’s rein to Daimler-Benz, it was touted as a “merger among equals”.  It cost Daimler-Benz $37 Billion for that merger in 1998. By the end of the Daimler-Benz reign, they actually had to pay the buyer.

It ended up costing Daimler-Benz $650 million to get rid of  its $37 Billion purchase 9 years earlier.

DaimlerChrysler moved to undo the most expensive and one of the least successful mergers in auto industry history Monday as it agreed to essentially pay to dump the money-losing Chrysler unit, which it paid $37 billion for nine years ago.

DaimlerChrysler (Charts) announced it will sell an 80 percent stake in its U.S. brand to Cerberus Capital Management, a private equity investment firm that will pay $7.4 billion.

But the German automaker, which will be renamed simply Daimler, will not actually get most of the money that Cerberus is paying for the once proud automaker. Instead Cerberus will contribute $5 billion to the Chrysler auto operations it will now control, with just a bit more than another $1 billion going to Chrysler’s finance arm.

While Daimler will receive the remaining $1.4 billion of Cerberus’s capital contribution to the sale, Daimler expects to have to cover another $1.6 billion in Chrysler losses before the deal closes. So Daimler estimates that it will end up paying out about $650 million to close the deal and that its earnings for 2007 will take a $4 billion to $5.4 billion profit hit because of charges related to the transaction.

I think Iaccoca did pick the wrong Bob as his successor. I have wondered where Chrysler would have been today had Lutz been the successor.

Anyway, with that long wind-up, after retiring from the automotive business,  Lutz now has a regular column in Road & Track magazine. He’s the first thing I read. I have read Road & Track  since the 1960s, and to me is one of the best car magazines.

In the latest issue, he talks about historic automotive icons who have had some shady deals. One he said was “basically a crook”. He dealt with them all during his time in the auto business.

John Delorean I can understand.

Max Hoffman was legendary in bringing European makes into the US. He brought in BMW, Volkswagen, and I believe, Alfa Romeo. The Porsche Speedster came about because of Hoffman. While I haven’t confirmed it, I read somewhere that in Porsche’s early days, he developed the famous Porsche crest.

Bob Lutz

While he didn’t bring Mercedes-Benz to the US, he started the floodgates. Before the war, Mercedes were just a tiny presence in the US. The story of how the iconic 300SL came to market is legendary, all because of Hoffman.

All this from his Park Avenue showroom that was designed by Frank Lloyd Wright.

Alejandro de Tomaso – who owned Maserati for awhile….

And Carroll Shelby?

“One of the most notorious was “Ol’ Shel”, beloved by all except those who regularly did business with him. Again, the stories abound: faked serial numbers, 20 “original 1960s” Cobra chassis that turned out to have been recently built then buried for awhile to promote “aging”. Shelby was funny, intelligent, and great to be with. The longer I worked with him at Chrysler, the less I liked him”. 

Lutz concludes by saying: “The list gets longer with the years. So what’s the connection? Hubris? A sense of untouchability? I don’t have the answer, but given my own passion, I’m glad that the U.S. Marine Corps burned into me a rigid, inviolable code of business ethics…”. 

He raises a good question. As to Carroll Shelby, with his faults, I think his reputation in the automotive world is still secure. The story of how his Cobra came to be – and beat the world’s best – all developed by a highly motivated team in a little Venice CA garage – is quite a story

If I could pick one car to have – give me a 1965 289 Cobra.

I have my own Carroll Shelby story but I have wandered enough for one night.

Maybe later.

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One response to “Bob Lutz

  1. Pingback: Lee Iacocca | The Lexicans

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