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Car Guys vs. Bean Counters: The Battle for the Soul of American Business Hardcover – June 9, 2011
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“This book should be required reading for every young person who seeks a business degree. That applies equally to the current management of GM.”
—David E. Davis, Jr., former editor and publisher of Car and Driver
“This is exactly what you’d expect from Bob Lutz: no holds barred, no punches pulled, and no stone left unturned. It’s a true insider’s perspective and a great read.”
—Stephen J. Girsky, vice chairman of General Motors
“Car Guys vs. Bean Counters is the best book written by an auto industry insider since Iacocca in 1984, and deserves to be shelved alongside Alfred P. Sloan’s management classic, My Years with General Motors.”
About the Author
BOB LUTZ held senior leadership positions at Gm, ford, Chrysler, and BMW over the course of an unparalleled forty-seven-year career, culminating in his vice chairmanship of General motors from 2001 to 2010. He is the bestselling author of Guts: 8 Laws of Business from One of the Most Innovative Business Leaders of Our Time.
Top Customer Reviews
Car guys are those who work at GM or Ford or Chrysler during the day and then at night, work on their cars as a hobby. On weekends, they would race them. During their free time, they would talk cars with other car guys. That's what built GM and Detroit in general. What has almost destroyed it has been the rise of the bean counter to positions of dominance in the domestic car industry. Bean counters focus on financial manipulation over product excellence. Maximum Bob, in this book, documents what went wrong and how to address it - not only in the auto industry but in American industry in general which has all too often been led down the same path to doom as the car industry.
The book is partly a biography covering a very short portion of Lutz's life - his second stint at GM - which recently ended after about a decade. This time around, he tried, with some notable success, to repair the damage he foresaw coming and which caused him to resign from GM many years before. It's more than a biography, however. It is also a diagnosis of what went wrong with the US car industry and US industry in general. Being Maximum Bob, he generally doesn't hold back his often controversial opinions being a person who'd rather speak out and found to be wrong than keep quiet.
The book delivers some surprises as well as details of behind the scenes activities, which, from time to time hit the mainstream news. The short book contains no filler. It's all solid opinion from Lutz including his observations and analysis of what's needed to fully restore US industry in general and the car business specifically.
Except for solid swipes at media both on the left such, as the environmentalists writing in the New York Times, or the right such as Rush Limbaugh, Lutz explains that much of the problem faced by industry is structural. Somewhat to my surprise, he explains that the union management is often caught in the same structural web as management and thus can't alter its course even if it's obvious it must do so. Of course, a good deal of this changed with the recent bankruptcies of GM and Chrysler. It'll be interesting if GM's management and the UAW can continue to forge ahead or if they'll slip back into the mediocrity which they'd sunken into by the turn of the century.
Lutz also takes a few swipes at Ford implying the company is riding a wave of luck and good press. He is remarkably light on his comments about the government 'takeover' or Steve Rattner's group. I suppose one doesn't bite the hand which has pulled one from the quicksand no matter how noxious that hand is. In a few places he seems to pull a punch or two but he also defends some folks who were unjustly vilified and explains why they were really blameless for the general catastrophe which hit GM and, for different reasons, Chrysler.
In sum, this is must read for those who have even a casual interest in cars or the car business. It is also a must read for those who have an interest in reviving American industry in general or who have heard of Lutz and wish a look into his mind. It is not a thorough autobiography of Maximum Bob's life and times, however, because it only covers a few years of his rather storied career. It's a good solid interesting read for anybody who has even a casual interest in a man generally regarded as an industrial genius.
In the end, it's a heck of a read penned by an industrial legend. We could sure use a few more Bob Lutz's in the US.
First though, to set this book and Lutz in context, a quote from midway through the book: "I know I'm full of crap a lot of the time, but that comes with the territory.
"Your job is to provide me with honest feedback," Lutz writes. If read with this caveat in mind, this book offers enough insight to rescue almost any failing industry without government bailouts. In my career as a reporter, I've seen enough once excellent newspapers go down the drain because publishers refused to understand Lutz's observations, insight and remedies.
He's a "product man," which means a commitment to quality products instead of profits, prestige or paper pushing. Lutz is infuriated by "bean counters" who see value only in profits; as such, it is an eloquent 'cri de coeur' rather than a balanced analysis of business management.
That said, few if any can't benefit from his basic insights into the over-confidence, hubris and arrogance that is making America into a third world society. Federal debt crisis? If Lutz's approach was applied to government and industry, the debate would center on how to use the surplus instead of crying about the deficits produced by dumb attitudes.
The current assumption is that America is great simply by being America; Lutz argues superiority is based on a never-ending search for improvement and innovation rather than complacency. My experience is that America is better than its political or business satraps; if leaders can pick the wisdom from rants such as Lutz, no country can do better.
Lutz is not afraid to name names. His first target is America's handling of the original oil crises - with increased CAFE requirements, instead of raising the gas tax. The unintended result, per Lutz, is that Japanese manufacturers did not have to do anything to meet the new requirements, while American firms incurred high expenditures. Japan also benefited from U.S. desire to keep it within its sphere of foreign policy influence - thus, we did little or nothing about the 'yen' exchange-rate being set too low. (Sound familiar to today and problems with China?) Continuing, Lutz complains that negotiated 'voluntary trade restraints (early to mid-1980s) did NOT result in American manufacturers simply raising prices rather than using the breather to improve costs and quality. However, Lutz' defense of American automakers (they were shifting to the new demand for pickups) lacks credibility because our manufacturers pushed that strategy as a means of avoiding both Japanese competition and stringent CAFE restraints. Similarly, Lutz criticizes those linking global warming to the auto industry, but does a poor job making his case.
Continuing, Lutz brings out the Big Three's problems with excess health care costs, and also admits that prior to signing the disastrous 1990 contract, G.M.'s forecasters had erroneously determined that health care costs had already peaked, and that increased gains in volume and efficiency would offset projected retiree care costs. Lutz also rakes G.M. for over-expanding plants and hiring (the latter by about 40,000), then acerbating the situation by also accepting the 'Job Bank' concept (full pay for idle workers - the UAW saw this as a means of keeping jobs in America). Lutz believes UAW leaders understood the situation was not economically sustainable, but unfortunately its members were overly-optimistic about the invincibility of the U.S. and its workers.
Many of G.M.'s problems had nothing to do with labor. Quality miscues occurred because we tried converting engines designed for gas power to diesel power - without requisite strengthening of components. The 4-6-8 cylinder design failed, per Lutz, because of inadequate electronics at the time - a euphemism for design and testing blunders. Buying foreign brands generally failed because of a lack of common components and overhead cost sharing; conversely, the Cadillac Cimarron etc. failed because of excessive commonality. Saturn's isolation, and being limited to a single line, saddled that line with excess overheads. Excessive automation increased both support labor and Job Bank costs. Meanwhile, stifling bureaucracy grew like cancer - sopping up expenditures and monopolizing management time. (Thanks should also be given to management professors of the time - idolizing complex structures - eg. Matrix Management, whole-job tasks - eg. Volvo, that added to the problems.) Saab and Subaru acquisitions did not fit into the G.M. product line, and potential savings from commonality of parts were not pursued.
NUMMI (New United Motor Manufacturing a joint-venture between Toyota and G.M. - reopening a previously closed, troublesome G.M. plant from 1984 to 2010, with the same staffers, building identical Corollas and Chevrolet Prizms, should have provided G.M. with hands-on experience for rising above its problems, but did not. Toyota brought the opportunity to G.M. to learn hands-on about its vaunted and revolutionary Toyota Production system - including the way Toyota approaches relationships with workers, its systems for goal-setting, plant and process layouts, job classification system, inventory and quality control, product-line flexibility, etc. Eventually G.M. pulled out of the partnership, along with the opportunities to learn. Lutz' accounting of this missed opportunity fails to recognize this as a major, major, major G.M. management blunder that Lutz apparently participated in. (Consumer Reports at the time noted that buyers paid a premium for the Corollas vs. the Prizms - based on their different overall quality reputations; Lutz simply whines that buyers were biased towards Japanese cars.)
G.M. did hit some good notes, thankfully. Its success in China with Buick (something Lutz doubted at first) helped revise G.M. today in the U.S. And Lutz helped bring simplification of organizational structure and goals - quickly noting, for example that when he first came to G.M. the chief of design had very limited impact on design processes and selection, and that enormous time and effort was wasted in detailed planning - the assumptions of which never occurred. Then there were the useless arguments over transfer pricing. G.M.'s eventually learned there were cost variations of as much as 3X in purchasing identical components for different car programs.
Readers curious about Lutz' vision of the ideal car company management style can probably conclude that Ferdinand Piech, Chairman of VW's Supervisory Board, represents that leader. Piech, per Lutz, pushed advanced technology, made design decisions, and was overflowing with self-confidence. Hmmm - guess who that sounds like, formerly at G.M. and Chrysler? (Piech was not infallible - eg. the $100,000 VW Phaeton was a major flop.) (Lutz' support for autocratic manufacturing bosses is also an interesting indirect endorsement of China's anti-democratic government, and a condemnation of America's bureaucratic, ineffectual government.)
Lutz notes with disappointment that the improved culture of customer focus and product excellence he helped bring to Chrysler didn't 'stick' after the Mercedes takeover. The 'good new' is that he's much more optimistic about that happening at G.M. (A 3/15/11 WSJ article covering on-going bureaucratic problems within G.M. suggests Lutz' optimism is ill-founded.) The 'really bad news,'however, is that Lutz' material contains far too many ignorant, whiny, excuses for our failures, instead of learning from them. And that is the real cause of not just America's manufacturing, but also its economic, and world leadership declines.
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I have always enjoyed reading articles by Mr Lutz.Read more