Vrroooom At The Top

One of Bob Lutz's first requests when he arrived at General Motors late last August was a new car. Not for himself; he already owns 17, including collectors' dreams like a 1934 LaSalle and a 1952 Aston Martin. No, GM's new vice chairman for product development was demanding a sexy "concept car" in just four months--in time for this week's annual Detroit Auto Show. Urged on by the man who recruited him, GM CEO Richard Wagoner, Lutz wanted to show industry leaders and critics that the world's largest automaker is moving to get its mojo back after years of being bogged down in bureaucratic compromises. "The last thing we need is another crossover vehicle with a navigation system and proximity radar," says Lutz, who at a vigorous 69 is the auto industry's pre-eminent car guy. "I was looking for a return to beauty."

To his surprise, the company's designers and engineers delivered the car in record time. A flood of sketches and round-the-clock construction yielded the Pontiac Solstice, a two-door, gunmetal gray roadster with a supercharged engine and a Corvette transmission, which was to make its debut at the Detroit show on Sunday. The car is exactly what Lutz had in mind--simple, sultry, evocative--and although it is for now the only one of its kind, its off-the-shelf components suggest that if the critics like it, it could make it into production in a few years and sell for a little over $20,000.

That's the big question: whether Lutz can push GM to produce not just one concept car that may or may not ever hit the streets but lots of beautiful, must-have cars. Despite a booming truck business and recent gains in market share against its troubled crosstown rivals Ford and Chrysler, GM still lumbers under the burdens borne by all the Big Three: in a stagnant economy, overcapacity and intractable labor costs have obliterated profit margins. Meanwhile, the soaring value of the dollar against the yen is giving Detroit's Japanese competitors an even bigger advantage than they already have through more efficient operations. Says Morgan Stanley analyst Stephen Girsky: "When foreign manufacturers have 38% of the market, being the best of the Big Three isn't saying much anymore."

In hiring Lutz, Wagoner is making a bold bet: that GM solves its problems not just by exhorting the bean counters to keep cutting costs and endlessly haggling with the unions but also by taking big risks to create exciting, popular products that bring in new revenues. Wagoner and chairman John F. Smith Jr. have carefully laid the groundwork for the kind of product-driven revolution Lutz has in mind. But he has to move fast, for the clock is ticking on his three-year contract.

For Lutz, the quick development of the Solstice is a welcome signal that things at GM are not as bad as they seemed from the outside. But they are still pretty bad. "When I got here, I started asking people to describe the design process, and nobody could do it," he says. "I realized it was just plain dysfunctional." Cars were being designed once in the studio and then analyzed and reanalyzed by engineers and marketing experts and constantly redesigned to suit their needs along the way. "It's called paralysis by analysis," says Bryan Nesbitt, the designer who worked with Lutz at Chrysler to create that company's acclaimed PT Cruiser--and who was recruited by GM chief designer Wayne Cherry.

There's no better example of the GM riddle than the Pontiac Aztek, the 2001 sport-utility vehicle that was recently awarded top honors by J.D. Power & Associates for customer satisfaction among light SUVs. The trouble is, not many customers can stop laughing long enough even to look inside an Aztek, whose boxy, butt-ugly design has inspired more jokes than any vehicle since the 1957 Ford Edsel. It's kind of what Lutz had in mind a year ago when he described GM's products, among others, as resembling "angry kitchen appliances."

While the Aztek was well engineered and efficient to produce, design was relegated to the backseat. "There wasn't anyone who would take responsibility or threaten to quit over his principles," says a GM design executive. Lutz, however, as friend and foe agree, is just that kind of guy.

A wisecracking, Cuban-cigar-smoking, martini-drinking former Marine Corps fighter pilot, Lutz is passionate about beauty and speed. He not only loves sports cars but also flies his own Czech L39C jet fighter and sometimes commutes to work in his own helicopter. Born to Swiss parents in Zurich, Lutz has always moved back and forth between Europe and the U.S. He smashed his uncle's Ford coupe into a wall at age eight and walked away from a helicopter accident in 1991. He started at GM in 1960, cruised through BMW, lodged at Ford and then landed at Lee Iacocca's Chrysler in 1986. Lutz has become legendary in Detroit for his fearlessness, whether he's flying or driving fast or giving executives around him the straight talk. That's one reason he never became CEO of Ford or Chrysler--and why in 1999, despite his crucial role there, he was eased out by chairman Robert Eaton, who seemed nervous about letting Lutz (fluent in German and Italian) get too friendly with the new owners from Daimler-Benz.