Summary
The sudden reversal on keeping the G8 as a Chevy Caprice would indicate that other forces may be at work at GM. It may also indicate that Bob Lutz may not have the latitude in his sales and marketing role that many had hoped. This is still a deeply distressed company. While relieved of substantial debt, the biggest trouble ahead may be the competing agendas of various stakeholders.
Analysis
Just this past Monday, many greeted Bob Lutz's announcement that GM would keep the G8 after the Pontiac phase out by selling it as a Chevrolet Caprice as evidence that a "car guy" was in charge. By Tuesday the first hint he wasn't came from Fritz Henderson as he told reporters that the G8 retention was not likely. By Thursday it was a dead issue with Bob Lutz saying that "upon further review and careful study, we simple cannot make a business case for such a program." By anyone's calculations, that is 72 hours of "careful study and further review." Frankly, it did not come as a surprise.
Since the move by the Federal Government into the car business, a constant theme has been the desire to change GM and Chrysler into companies that produce cars people want. And the Government interprets that as high fuel efficiency cars though poll results and real consumer behavior are often contradictory. As a result, Bob Lutz's quick move to champion a higher horsepower, rear wheel drive sports car came as a bit of a surprise. Granted it was a very pleasant one but a surprise none the less. Mr. Lutz's reputation is one of a straight talker and passionate car guy. The announcement of his desire to keep the G8 may have been a result of both. Until someone in the Administration got wind. Such cars do not scream fuel efficiency. The G8 may not fit the Administration's plan.
The episode seems to indicate that while all the paperwork may have been completed for the bankruptcy and reorganization, the strategic sheet music is still unwritten. It would seem that Henderson and Lutz are not yet on the same page. Before there is any talk of selling stock in the new company to facilitate the Government exit, such a strategic framework needs to be crafted, vetted and communicated. Everyone should be on the same page. There should be room in a company the size of the new GM for high efficiency vehicles such as the Volt (also championed by Bob Lutz) and a fun car or two like the G8. Might the Corvette be an endangered species?
A troubling aspect of this entire episode is that Bob Lutz may not have the latitude to impact sales and marketing many had hoped. He was planning on retiring but was convinced to stay on to help guide the company out of distress. With his first customer-directed pronouncement gunned down in a matter of hours, he might do well to re-think retirement. Perhaps a better home for the G8 would be Saturn under the ownership of Roger Penske if the Australian facility where it is produced can be kept running.
An interesting sidebar to this 72 hour strategic flip flop was the low key announcement on Tuesday that Steven Rattner is departing as head of the White House automotive task force. He is being replaced by Ron Bloom a former adviser to the United Steelworkers Union. This might represent still another agenda preferring GM vehicles made in the US not Australia.
