Executive Briefings

'Bean Counters' and 'Culture of Excellence' Contributed to GM's Decline, Former Exec Says

After holding top executive positions at BMW, Ford and Chrysler, Bob Lutz knew what a car company should look like, and he didn't find it when he arrived at GM in 2001.

The dysfunctional company had been spiraling downward for more than two decades, in part because it was unable to develop appealing new models. The former vice chairman dates the beginning of GM's decline to 1977 when a corporate apparatchik replaced the flamboyant Bill Mitchell as head of design. Product creation was re-assigned to a finance-dominated product planning function, and new models were stripped of their individuality in an ill-advised drive to economize.

"A 'culture of excellence' focused on manufacturing cost reduction and led to such dismal results as the early front-wheel-drive cars and the whole plastic bodied Saturn line," writes Lutz in his book, Car Guys vs. Bean Counters. "The system created research-driven, focus-group-guided, customer-optimized transportation devices, hamstrung in countless ways ... Designers were now reduced to the equivalent of choosing the font for the list of ingredients on a tube of Crest."

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After holding top executive positions at BMW, Ford and Chrysler, Bob Lutz knew what a car company should look like, and he didn't find it when he arrived at GM in 2001.

The dysfunctional company had been spiraling downward for more than two decades, in part because it was unable to develop appealing new models. The former vice chairman dates the beginning of GM's decline to 1977 when a corporate apparatchik replaced the flamboyant Bill Mitchell as head of design. Product creation was re-assigned to a finance-dominated product planning function, and new models were stripped of their individuality in an ill-advised drive to economize.

"A 'culture of excellence' focused on manufacturing cost reduction and led to such dismal results as the early front-wheel-drive cars and the whole plastic bodied Saturn line," writes Lutz in his book, Car Guys vs. Bean Counters. "The system created research-driven, focus-group-guided, customer-optimized transportation devices, hamstrung in countless ways ... Designers were now reduced to the equivalent of choosing the font for the list of ingredients on a tube of Crest."

Read Full Article