Lutz’s Far-Reaching Influence

Zarrella To Leave GM for B&L by TCC Team (11/13/2001)
Q&A: GM's Bob Lutz by TCC Team (11/12/2001)
GM Riding a Wave? by Joseph Szczesny (11/12/2001)

Bob Lutz isn’t just General Motors top product development executive and top dog in North America. Now that Ron Zarrella is back to the contact lens business where he probably belongs, it is clear that Lutz will also be top marketer at the General.

Let me explain.

I recall being on a trip to Austin with Chrysler in the mid-1990s. It was a press trip to introduce the Durango, newest version of the Dakota and the Concorde. During the sessions with Chrysler executives, reporters were shown some new advertising, including a "brand" spot — a TV commercial that was meant to convey to consumers what the Chrysler Corporation was about. The TV ad was computer generated, and showed off the fact that Chrysler was now designing cars completely by computer. Each vehicle, all red, emerged from computer pixels, driving out of computer screens into some computer generated environment of pixels and nodes.

I turned to the marketing executive who thought this a great idea, and asked, "Exactly why do you think your customers care that these vehicles were hatched in a computer. Why is that hat you want to convey as a corporate or even product message?" I am paraphrasing here, but his response was something along the lines of, "When we showed it to focus groups, they loved it....really ate it up."

Uh huh.

A funny thing on the way to TV

A few months into this advertising, a funny thing happened. The second-generation LH cars were off to a slow start. That ad, and some ones that were similar in style and direction were meant to launch the new Intrepid, Concorde and LHS. Bob Lutz gave an interview to Automotive News, I believe, saying something along the lines of, "I don’t know why anyone would care about the fact that we used a CAD system to design these cars. I’m no brand expert, but I think there are a lot more relevant things to say about these cars."

Forgive me for not researching the exact quote, but I’m sure that I have the meaning correct. And Lutz, who I believe probably expressed similar disgust or apprehension about the advertising inside company headquarters, was not bashful about telling the reporter that the strategy was cockeyed. He wasn’t trying to embarrass the marketing staff, just drive the point home that any process that would have come up with such a ridiculous strategy ought to be looked at and fixed, just as lower scores in quality should be looked at fixed.

At GM, in less than three months on the job, Lutz has GM rethinking how it looks at its brands and brand communication processes — processes that outgoing GM North American chief Ron Zarrella has been battling to put in place for the last six years. A GM executive I was talking to recently about Cadillac and its "art and science" positioning said Lutz has already expressed that Caddy is going down the wrong path. Lutz’s answer for how to get it on the right path without making Zarrella look foolish was to keep the "art and science" strategy, but change everything else about the strategy — the design template of the cars and the marketing direction.

If I were Zarrella, I would have gone back to the eyeglasses and contact lens business too, especially if the company was falling all over themselves to offer me whatever I wanted to run the show.

Classic instinct

Lutz has a good marketing sense without being classically trained. He has the right instincts, similar to those he has for design. The fact that he carries so much weight on the strategy board should get certain brand plans in line with his ideas for design.

One of the concerns, though, is around people who Zarrella recruited and hired: corporate ad chief C.J. Fraleigh and Cadillac general manager Marl LaNeve — both increasingly valuable members of the team. It would be a shame if they and some of Zarrella’s other finds felt disenfranchised without a "marketing type" at the top.

In Lutz’s recent "memo" to the troops outlining his thinking to the troops he said, don’t be a slave to focus groups. "What focus groups say they would really like in their next car is not reliable, because they are, in the research, not really paying for it," said Lutz, referring to how consumer focus groups in the 1980s led to wasted "innovations" like digital instrument panels and talking cars.

More recently, he commented about branding, saying, "I am very much in favor of maintaining strong brand differentiation, but not in restricting design through a rigid set of rules."

That goes for marketing and product. "When people see a Chevy, they ought to feel Chevy without it necessarily following some sort of design template of grille and tail."

Think of the combination of Zarrella’s slavery to focus groups combined with former manufacturing chief Don Hackworth’s love of flat panels to simplify the stamping, and you get the Pontiac Aztek and Buick Rendezvous. Zarrella thought the origami design theme for Cadillac was a way to differentiate Cadillac. The new CTS may be the best Cadillac ever, but it looks...well, we’ll see how the public reacts. Lutz made some last-minute exterior design changes to the Cadillac STS before the design freeze kicked in. Mid-decade Caddys should be interesting.

Even Zarrella admitted last week in his parting conference call said design had taken a third seat at GM the last decade. But that has thankfully changed. "The auto business is 90 percent product, and everything else you do is on the fringe," said Zarrella. Zarrella boasted that GM would have the first year-over-year market share increase in almost thirty years.

Frankly, having achieved it on the back of zero-percent financing and the rotting flesh of Ford and Chrysler, I wouldn’t be bragging. More to the point was that Zarrella contributed mightily to the need to fold Oldsmobile and the steady decline of share from 1994 to 2001. On the bright side, though, we won’t have to endure another "Ron" skit at the Detroit auto show in January.

While many of us General watchers will be interested to see how Lutz handles the increased responsibility and focus, he is just as welcome in the marketing meetings as he is in the design studio.

story posted 11/18/01

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