Car Guys vs. Bean Counters - Bob Lutz [63]
So, I asked the question when I got my feet under the desk at GM. The reasons not to do this came pouring in, mostly revolving around the fact that it wasn’t “our” car. It “belonged” to GM Asia-Pacific. GM Holden, when it found out about my interest, was very enthusiastic, but GM North America, as a whole, was not.
At one point, I was presented with a Pontiac Grand Prix which had been extensively modified, switched from front-wheel drive to rear-wheel drive and fitted with the ubiquitous smallblock V8. “If this is really what you want, why deal with Asia-Pacific? We can do exactly the same thing, right here in North America!”
I wasn’t buying. Changing a car that much really meant “all-new car,” and at the anticipated modest sales volume, would never make business sense. I just kept insisting on a Holden-based idea, which had evolved into a coupe body style, to be marketed as a reborn Pontiac GTO.
Months passed in arguments over “transfer price” and “Who’s going to pay for the engineering and the tooling for the U.S. headlights?” GM North America’s view was “Why should we fund an Asia-Pacific project so they can sell in our market?” Asia-Pacific’s view was “You’re the customer and the beneficiary; why should we pay?” My somewhat naïvely utopian view was “Hello! This is all GM. These are wooden nickels we’re pushing back and forth.Toyota wouldn’t be having this stupid discussion, since they care about corporate profitability and don’t suboptimize by region.”
A trip to Australia by a number of us convinced the skeptics that the car was great to drive, unique among Big Three offerings, and potentially very profitable. The Australian dollar was, at the time, worth about fifty-seven U.S. cents. Unfortunately, during the unnecessarily long gestation period, it rose to eighty cents.That difference destroyed what was to be a very nice profit and caused final pricing of the GTO, initially targeted for around $25,000, to rise above $30,000, ensuring a lukewarm market acceptance.
It was during Australia’s execution of the program that we found out just how different the regional GM “companies” were. Engineering standards were not the same. Measurement and targeted life of components bore little resemblance to those used in the United States.Testing standards were entirely different, requiring most durability testing to be painstakingly duplicated in the United States because we couldn’t trust what Holden had done. It was as though we were dealing with a completely unrelated car company.
The car finally reached North America, looking less fresh with an additional two years of age on the design and a price tag which, at more than $30,000, was very much on the high side for a Pontiac. Nevertheless, fans of V8-powered American rear-wheel-drive cars loved them, and the reborn, short-lived, Australian-built Pontiac GTO is now a sought-after cult car.
But the GTO’s value to GM transcended the disappointing sales numbers: it had gotten the two engineering groups together and had convinced many previous skeptics that maybe, just maybe, there were other parts of GM that also knew how to engineer outstanding automobiles.
I argued tirelessly for a global, centrally administered product development and capital investment budget. Fortunately, the waste involved in creating very similar but totally unique cars for Daewoo (now under partial ownership of GM), Opel in Europe, and Chevrolet in the United States was not lost on Rick Wagoner, so “global product development” began to appear