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INDUSTRY REPORT: Feb. 9, 2004


Lutz To Focus On Europe Temporarily

Vice Chairman Robert Lutz will fill in as General Motors' top executive in Europe until June 1, following the abrupt departure of Mike Burns, who resigned this week to become the chief executive officer of Dana Corp. in Toledo, Ohio. The CEO post at Dana had been vacant since the sudden death of Joe Magliochetti last autumn.

Burns had been responsible for implementing plans to end a string of losses GM of Europe has suffered through in recent years and which actually widened in 2003. Consequently, Burns departure set off a scramble inside GM to cover a job that will ultimately go to Fritz Henderson, the executive vice president in charge of GM Asia Pacific. Henderson is now scheduled to become president of GM Europe on June 1 after he has a chance to coach his successor, Troy Clarke, on the intricacies of the Asian market, Lutz said.

"Asia is based on relationship and we have to make sure that's taken care of," said Lutz.

"Continuing our recent outstanding success in Asia Pacific is critical to GM's future and I'm confident Troy will build on the momentum GM has seen in that region over the past several years," GM Chairman Richard Wagoner said as he announced the personnel changes. "I also very much appreciate Bob Lutz's willingness to go to Europe and lead this great organization on an interim basis.

Lutz said he was looking forward to the temporary assignment but said he also planned to stay on top of his responsibilities in North America via e-mail and telephone. "I'll split my time between the two. I'll be back in the states for blocks of four and five days at time," Lutz said. Lutz added it made more sense to move him to Europe, than to saddle Wagoner or John Devine, GM's Chief Financial officer, with extra duties. Gary Cowger is still in charge of the North American Operations day to day, Lutz noted. "There is no danger of North America being undermanaged," Lutz added. —Jim Burt

Ford Jr.: U.S. Dollar Slump Good

The strength of the U.S. dollar against the Euro and other world currencies may have gained oomph in recent days, but one of the automotive industry's top dogs is not necessarily looking for any heroic American currency rallies. "A weakened dollar is very good for the American industry," Ford Motor Co. chairman Bill Ford Jr. said Wednesday speaking before the Economic Club of Chicago. "I'm not troubled at all by its weakness." He said vehicles either made in America or carrying loads of American content will benefit from the weak dollar, but was quick to point out that Ford makes cars in a wide variety of markets, so the company is never clear of currency concerns. Even if U.S. currency woes contribute a spring to the chairman's step, the healthcare situation at Ford is anything but rosy. "Of all the things I lose sleep over," healthcare tops the list, he said, adding healthcare costs are the "biggest disincentive" to investing in American industry. "We don't have a solution…Ford Motor Co. is not going to unilaterally solve this...it's the one issue big and small business can agree on." He says that even though the automaker has whittled away at its healthcare cost problem, he anticipates the cost-per-vehicle rate of healthcare to continue to escalate in coming years. — John D. Stoll


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