Vrroooom At The Top: Bob Lutz and GM

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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.