So, I went to dinner last night with the Western Automotive Journalists to listen to Bob Lutz. He is an entertaining speaker with knowledge and presense. I sure hope he can help GM, as they need it. He started off basically not biatching about the companies well deserved past for crappy cars, just for consideration as they change it. Turns out that one of the divisions topped the JDP initial quality survey (don't remember if it was brand or model specific), sharing the spot with Lexus, for 147 defects per one hundred cars! Three of the top 5 were US producers, so he was saying that GM used to make crap, get the word out that things are changing. Fair enough. Then he went on to talk about the energy efficiency programs that GM has been up to, talking about hybrid technolgoes and the Volt. he mentioned that in 2025, the auto market in China will be bigger than the US and EU COMBINED (Guess you know where a lot of GM focus is). This lead to a comment later that if there's a dispute in design between China and the US with regard to Buick, that they'll listen to the Chinese! (There's some history here. In the 30s Buick wanted to be an export driven company, and that's when the Buick rep was started in China. That's why when GM went there in, what, the 80s? the Chinese wanted Buick, not Cadillac)

Here are some of the better quotes...

He liked being a competitor to GM because in the past "You could always count on GM to give up market share."

GM used to be "Interiors by Wall-Mart."

Commented about world platform design and how the regions used to design autonomously. "Each region did thier own cars and it was stupid. We're not going to do that any more."

While I won't (I didn't take detailed enough notes, as MC Squared doesn't really care what Lutz says) go over the full speach, these are my comments. Sorry if some seem out of context, this is from an e-mail exchange with someone who was there....


1) The Union of Concerned Scientist is FULL of real degreed scientists. (He'd said that the UCS was a lobbying group with no degreed members. I've been a member, and I have a couple of degrees.) And if one looks at a financial correlations with position on issues and income, the UCS has little, GM has tons. Bit of a conflict of interests for Mr Lutz. Also, all the things that he says GM has adopted, GM was pretty late to the party. Overhead cams, direct injection, variable valve timing, and anything but a 3 speed automatic with torque converter lock-up are relativly new to GMs game. The comments here were the low part of his speech, as he’s a smart guy, and he should have answers to questions that doesn’t involve undermining the credibility of what is basically a volenteer organization. I think he can do better than this, and I would hope on reflection, that he would think he could too!

2) He totally BSed everyone on ethanol. There’s a $1/gal incentive to use domestic ethanol (53 cents a gallon to US producers, and over 50 cents a gallon import barriers to lower cost ethanol from sugar cain from Brazil and the like). While it may make a nice sound bite to say there’s only a nickles worth of corn in a box of cerial, most of the US crop is for feed-stocks, and there’s a heck of a lot more corn that goes into every pound of beef, pork and other meats than a nickle. Also, in his description of cellulistic ethanol, where the non-sugar part of the corn is used to fuel a still to convert the sugars is not the best technology out there. He is right though that cellulistic ethanol will take some of the pressure off corn production. But the numbers don’t add up, as he ws claiming that cellulistic ethanol could displace oil completely in 5 years or so with Government leadership, and if you used all the sources that are out there for ethanol production, it doesn’t even give a serious dent to replacing our appetitie for oil.

3) His comments about wind effecting the weather were complete BS too. (He was trying to imply that wind energy would have the same environmental impact as hydrocarbon based energy production. ) There is TONS of energy that moves the air around the planet. Really, he answered his own question wrong about where does the wind energy come from. The wind is a product of the tempurature gradients caused by the night/day transition, combined with the rotational momentum of the planet (via something called the corialis force, don’t ask me to explain it, because it’s a bit complicated ). It’s just another form of solar energy, even though you don’t get it with solar cells. The math HAS been done, and this is a non-issue, scare tactic plain and simple.

4) The estimates of the cost of the technology to end users for hybrid stuff to make the 43 MPG that california wants are inflated about 4x. (He says $6k-$8k per car price increase) Toyota is doing it for about $2k a car, maybe less now (the Prius line is now a money maker, not a subsidized vehicle). Maybe it would take GM $8k to deliver their first dual drive technologies to the masses now, but only in the short term, and only because they’ve pissed so much time and technology down the toilette over the decades that they ceeded any potential advantage they could have had by leading the pack down the toilette. If what he claimed was really true, then why are they offering the most models with hybrid drives, and how are they going to sell them? This just doesn’t add up.

5) While he did quote the largest range of models that have hybrid drives, he didn’t say ANYTHING about the volume mix. Same thing with cars that get over 30mpg. Sure, they make 30 models that do, but what percentage of their fleet are actually these versions? Funny, he didn’t mention that they hybrid drive system that GM is using (co-developed with BMW and Chrysler) has been abandoned by BMW already, as being too expensive to manufacture. BMW is doing a different one, based on the lessons learned with the joint venture (this feeds into the claim of the cost of the technology).

6) I did like his comments about how the gov is really screwing the pooch. The Dems call for investigations on price gouging by oil companies, Bush releases oil from the strategic reserves to temper price spikes. Both parties are pandering to the voting masses because neither has the ***** to say what needs to be said: We’re sticking our future up into the air in massive CO2 emmissions per unit GDP because in our government doesn’t have the will to lead on the subject. We have artificially low oil/gas prices here because the cost of the product is only tied to the cost of production, and that there’s no capture of the cost of “externalities” (This is an econamist term for all the bad stuff that happens when we use the atmosphere as a big toilette for a hydrocarbon based economy), the risks associate with foreign oil dependance (how much do we spend on fleets in the Persian Gulf?) and what about the balance of trade contribution by sending shitloads of dollars overseas to get the oil (and soon liquified natural gas) are included in the cost of gas, oil, coal or domentic natural gas. The answer is pretty simple. It's zero, and this is just wrong. It's an indication of a broken market mechanism.

7) He’s totally correct in saying that eventually the country has to come to terms with the fact that our energy dependance requires a national about face on nuclear. There just aren’t enough solar, wind or other resources out there to feed our energy habit without using nuclear. This was quite a plesant surprise.

8) His anti-CAFÉ standard diatribes were expected, but wrong. One of the few times economic growth in the US was decoupled from increased oil consumption was in the late 70s, when the economy grew a lot, but our hydrocarbon consuption per unit of GDP actually went down. He didn’t address that at all, used selective spin on increased miles driven with increased fuel efficiency of cars, didn’t address the fact that while this was true, gas consumption STILL went down on a per driver basis. This is the standard car company BS about resisiting change. It’s too bad, as it was times like that when the car companies were really forced to introduce technologies that both the greenies and the car lover could benefit from. This was the time of the introduction of the catalytic converter, widespread adoption of fuel injection, the removal of tons of lead per day from our air, and an increase in power output per litre of displacment that makes cars like our Mini put out more power per liter than a new Corvette!

9) GM is making small cars in Euope, just not here. He showed off the Chevy Agila as an example of a Euopean car that indicated GM cares about small cars and efficiency. Why can the Mini come here, yet the Agila can’t? No reason other than design choices. They don’t think it will sell, so they didn’t engineer it to make the grade here. But Toyota, Nissan, Suzuki and Honda are making the Yaris, Fit and others that hit that size point, without being barred from US entry because of safety issues. He had a telling comment “GM is the large vehicle provider to the United States.” And engineering decision like those that went into the Agila will keep it that way!

10) GM starting hybrid systems on busses is actually a good thing. He’s right when he says that it’s just dumb to hybridize a car that already has great gas mileage. But the fact that they’ve only sold 1,200 means they either are late starters, or aren’t taking it as seriously as they should. His claimed fuel savings translates to about a bit under $2k per bus decrease in fuel costs. I don’t remember if that’s a per year savings, or over the life of the program.

11) One journalist pointed out that while GM may be doing better in style and quality, it's dropped the ball on ergonomic (solstace trunk) and mass (new full sized pick-up wiehgs 200 lbs more than the model it replaced). He tried to spin the trunk on the Solstice as something 2 seat owners expect, while comparing to his time with an MGTD as a younger man (great, GM can now produce a car with the same space utilization as a british car designed in the 20s!). But he did admit that GM had dropped the ball on mass as they were focusing on durability and quality. But that this is changing, as they are now giving thier suppliers weight targets when the RFQ new parts and subsytems. He also pointed out that Honda is the king of low weight cars without using exotic materials, and that GM was busy taking Hondas apart to learn about the techniques.

12) He got a question from someone working on a energy efficiency panel for the American Physical Society. the questioner said that one of the Japanese suppliers had said they could increase CAFE ratings for the fleet 3% a year for about 30 years with current technology, and did Bob care to comment? Bob hemmed and hawd a bit, saying it was better than the 4%-6% that the current crop of Democratic presidential contenders are talking, went on a bit about the gasoline fueld engine technology being tapped out to the point of diminishing returns, and then granted that yes, it could be done. I was surprised that he admited it.

Overall it was a good evening, and I'll give him an A-. He was more honest on some issues than I thought he'd be, even though he dodged or BSed on some issue, none were unexpected.

Hope you all found this interesting....

Matt

 

Thanks for the report - I bet it was a mostly interesting night hearing what Lutz had to say. I wish GM the best even though nothing in their product line even remotely interests me.

 

+1
Except the Z06. As long as it dosen't become the Corvette SS. Then I'll have an even greater reason to hate GM.

 

bob lutz is #2? i thought he was #1. who's #1?

poor gm, but almost nothing they make is desirable, some are purely disgusting. corvette isn't bad, and hopefully they don't mess up the new camaro

 

They very well might. Look what they did the name "Nova".

 

And that's a bit of a low blow with the Nova... The Corvette SS is a blown version, and not the next Z06 or whatever.

To be fair to GM, some of the new cars are surprisingly good, and the price is much better for what you get.

BUT, GM is STILL behind the curve, fighting efficiency, instead of choosing to lead. They quote $6k-$8 for the efficiency California wants with the CO2 legislation that's stalled at the EPA. Look back at history, and the catalytic converter was supposed to add over $2k in 1970 dollars... Tons less in reality. If the same overstatement factor is in play now, then the efficiency cost is $1500-$2k. About the premium for a hybrid system.

Matt

 

Thanks for the report Matt.

I give Mr. Lutz kudos for sticking his neck out somewhat.

 

Thanks for the report.
Profit vs. desirable cars will always drive the US auto industry. Something about Americans and BIG cars will need to be addressed, like $5/gal gas.
The ethanol issue is a bunch of crap.
I appreciate your comments on 6), won't jepordize this thread by elaborating.

 

I remembered one thing that GM was good for. They gave all of the stupid people out there a motor they could understand: the 350. Just don't try and tell them that they are all the same. You know, LS1, LT1, LT4, iron 350, aluminum headed 350's, LS2, they are all the same.