Car Guys vs. Bean Counters - Bob Lutz [27]
Is it any wonder that a headhunter had little trouble persuading me to accept the position of BMW executive VP for global sales and marketing at five times my GM pay? My father, a career banker and admirer of GM’s financial power, was shocked and dismayed by this seemingly foolhardy career move. I had told him I was frustrated with the arrogance and stupidity of the GM system. I remember my father saying, “Let me get this straight: my thirty-eight-year-old, midlevel son, with only nine years’ experience, has come to the conclusion that the world’s largest, most successful, most powerful, and best-managed car company does not meet his standards?”
“Yes,” I answered, meekly. “That about sums it up.” Pa was not pleased.
(Of course, BMW was a different kind of shock. I went from a group of well-intentioned, scrupulously honest yet inept GM folks into a nest of fast-moving, high-performance Germans, many of whom practiced self-enrichment at a level of corruption unthinkable in a U.S. corporation at the time. See my first book, Guts.)
GM was anything but quiet between my departure and my eventual return. Massive, wrenching reorganizations were accomplished, sometimes with severe consequences to effectiveness. Right or wrong, popular or not, GM had to shrink, shedding activities and people. As retired finance executive Jack Hazen recalls:
During the Jim McDonald/Roger Smith era, two major policy/organizational changes had a significant impact on our ability to lead in product in the future and hampered decision making. The first was the major reorganizational change in 1974, which divided up Fisher Body and GMAD (General Motors Assembly Division), turned the divisions [brands] into marketing divisions only, and established two new Car Groups that didn’t make much sense to anyone. The organizational gridlock that happened in engineering and other staffs took us twenty years to straighten out, and we never recovered from dividing up the body and chassis engineering expertise.
The second was the decision to build new assembly plants and automate both the assembly plants and stamping plants, which burdened GM with huge capital expenditures, excess capacity as our market share declined, and many labor problems.
I dealt with this organizational monstrosity firsthand in the early 1990s. By now, Bob Stempel was in charge of one of the two huge new groups. I was president of Chrysler at the time, and our transmission people were attempting to respond to a “request for quote” on a manual truck transmission that Chrysler was engineering and tooling for GM. My people came to me in frustration. While GM continued to ask for quotes and specs on the transmission, nobody on that side felt empowered to actually commit to an order.The situation was becoming pressing, because we needed to know what production quantity to tool up for: Dodge trucks only? Low investment, high unit cost. GM plus Dodge? Much higher volume, more investment, lower piece cost. My transmission specialists had gone from GM Powertrain Planning to Light Truck Planning, from there to Powertrain Purchasing, then GMC Marketing, Chevrolet Truck Marketing, and on and on, with each expressing a favorable opinion but declining an actual commitment. I volunteered to call Bob Stempel, whom I knew from his European assignment, and did so. After I described the dilemma to him, we both decided it would be beneficial to get everybody into one conference room at the same time and stay there until we had a decision. Fair enough.
Ten days later, I showed up with my transmission specialist at the old General Motors Building on West Grand Boulevard and was sent to a long, elegant conference room with antique-looking wall sconces and no windows.The room was soon teeming with well-dressed GM executives, all brandishing shiny binders and handing