Former GM Vice Chair Blames “Management Incompetence” – Not UAW – for Detroit’s Demise (Video)

Yahoo Finance ^ | July 6,2011 | Peter Gorenstein

[Hojczyk]

Now in retirement, Lutz is still as vocal as ever about cars and the auto industry. In his new book, Car Guys versus Bean Counters: The Battle for the Soul of American Business, Lutz documents what he believes was the greatest factor in the demise of the U.S. auto industry.

No, it's not the unions (although that contributed). No, it's not uncompetitive wages compared to Asian manufacturers.

His answer: "Management incompetence"

Over the course of his career, "management became way too scientific, B-school oriented; way too cost focused; and it was almost considered childish to be to be enthusiastic about automobiles," Lutz explains to Aaron Task in the accompanying clip.

Lutz says auto executives worried too much about hitting the numbers and not enough about creating a product consumers wanted to buy. "That is a fundamentally flawed approach," he blames on American business schools. The "over-fascination" and "over-focus on the numerical side of the business" is endemic in U.S. business and has resulted in public cynicism," Lutz says. "The American public is sick of Wall Street, the American public is sick of American business, is sick of job outsourcing, is sick of the loss of our industrial base." (See: Bring It Home! "No Excuse" Not to Manufacture in U.S., Bob Lutz Says)

[Paladin2]

"....creating a product consumers wanted to buy."

What about creating vehicles people love to own?

[Roccus]

On a clear day you can see GM.

[Oldpuppymax]

As a former GM dealer I can certainly agree that GM management was at best incompetent, and at worst....I’d rather not say. But a large portion of that stupidity involved the impossible contracts granted to the UAW over the years.

[Hojczyk]

He is right..cars no body wanted..poorly built cars..the take it or leave it....they signed the contracts with the UAW...

[4yearlurker]

Union labor and Chinese parts=junk cars.

[ken21]

gm’s problems were discussed ad infinitum

in car mags, newspapers, on-line etc. for decades.

[max americana]

Sure, I agree with Lol-z that “mgmt. incompetence” led to the demise of GM. Funny, that it was that very same incompetence that allowed the unions to run them, at the same time STILL getting their asses kicked by Ford when it moved to number 1, while owned by obama’s feds.

Outstanding.

[Little Ray]

Well, he’s probably at least half right...

[DUMBGRUNT]

"a large portion of that stupidity involved the impossible contracts granted to the UAW over the years"

Very true. Also note that the US is one of the last places that allows pattern bargaining

[tcrlaf]

Too a large extent, Lutz is COMPLETELY CORRECT.

Management-types knew there was no profit for them to fight against the unions, just give’em what they want, keep the production lines rolling, and it will be someone else’s problem LONG after they are retired or dead.

GM execs knew in the MID-90’s, and likely far earlier than that, what was coming, and were looking for solutions for it then.

[ImJustAnotherOkie]

Duh...Management is always to blame.

Cowardliness to stand up to the unions in fear of a strike. It put fear in the heart of the bean counters.

[truthguy]

I know a fair deal about Bob Lutz. This title is a little misleading. Bob Lutz tends to shoot from the hip and this time he almost shot himself in the foot.

What Lutz didn't like was the ascension of the MBA types who had never changed a spark plug into upper management positions at the major car companies and major positions within US Industry. Lutz wanted managers who had a passion for automotive excellence and not a bunch of Ivy League types who never popped the hood of their car. Lutz loved the roll up the sleeve type engineers.
(Note: At BMW you cannot be any type of manager without an Engineering or Scientific Degree. Contrast that with any US company. That's why BMW builds the cars they do. And Lutz worked for BMW for a period of time).
These are the types that ruined or helped ruin the car companies.

I agree with Lutz to a certain extent but I would put the blame in the following order:

1. UAW
2. Federal Government,i.e. idiotic regulation
3. Bad Management (Lutz's #1)
4. State of California, i.e. Throwing their weight around.
5. US Media, exaggerating the quality level of American Cars and then failing to recognize the quality improvement since about 1997 or so.

[July4]

We were committed Chevy and Ford customers for half a century. Now, family and business vehicles are German and Japanese.

Mismanagement by GM and Ford? No. We just ran out of time and money to keep the damn things running.

We look forward to the day when we can buy ALL American once again.

[joe fonebone]

no sh*t.... we call them “Generous Motors” for a reason...if the shortest distance between 2 lines was what was needed, that was not what was done.... their factories are overbuilt and overautomated....

[Last Dakotan]

30-40 years ago American management was the envy of the world - now it is the world’s laughingstock. American CEO’s for all their compensation couldn’t manage their way out of wet paper bags.

[proxy_user]

I remember reading an article somewhere that discussed the amount of time spent on employee reviews. Apparently, every manager had rows of binders in his office, and devoted much of his time to giving performance feedback and ranking employees.

This is all very well, but they should have paid more attention to doing the actual work. That’s what happens when you are overrun by MBAs and consultants.

[cripplecreek]

Management-types knew there was no profit for them to fight against the unions, just give’em what they want, keep the production lines rolling, and it will be someone else’s problem LONG after they are retired or dead.

My neighbor is a Chrysler retiree (50 years old). He started in the union and then went to management. He says its your basic "grab what you can and blame the other guy" scenario. He says that there are 6 figure receptionists both management and union.

[Roccus]

THIS is what happens when administrators make technical decissions

[Roccus]

S/B “decisions”