Lutz to retire 1 may

[Byteme]

No great loss IMHO.  Looks like Lutz is just in it for the money, despite the fact he's quite wealthy. 


Report: Bob Lutz to retire from GM
Robert Snell / The Detroit News
General Motors Co. Vice Chairman Bob Lutz, an industry icon who has helped lead a product renaissance at the Detroit automaker, is retiring May 1, the highest-profile defection since Chief Executive Fritz Henderson's forced resignation in December, according to CNBC.

Lutz, 78, has complained recently about below-market compensation for GM's top executives, and his departure comes amid a sweeping shake-up within the automaker's North American operations.

GM officials would not comment on the report and Lutz did not respond immediately to an e-mail seeking comment.

Lutz has held senior positions at each of Detroit's Big Three automakers and has overseen some of the industry's most daring vehicles, from the Dodge Viper sports car to the Chevrolet Volt extended-range electric car, scheduled to debut later this year.

On Tuesday, Lutz wrote in an e-mail to The Detroit News from the Geneva Motor Show that he is not immediately retiring or leaving GM.

Last month, Lutz told The Detroit News that GM's top 25 senior executives, whose pay packages are being reviewed by the Treasury Department, were "way, way, way" underpaid.

His comments came as Treasury officials review 2010 pay for GM executives, whose salaries must be approved by the agency's pay czar, Ken Feinberg. That's because GM is among companies that received billions in federal money under the $700 billion Troubled Asset Relief Program.

Lutz initially announced his retirement from GM in February 2009, complaining about government oversight attached to billions in federal aid that kept GM afloat. He later chose to stay with the company, heading the marketing and communications department.

And in December, Chairman and CEO Edward Whitacre Jr. named Lutz a special adviser



From The Detroit News: http://www.detnews.com/article/20100303/AUTO01/3030415/1361/Report--Bob-Lutz-to-retire-from-GM#ixzz0h8iDrY50

[Jon?]

Last month, Lutz told The Detroit News that GM's top 25 senior executives, whose pay packages are being reviewed by the Treasury Department, were "way, way, way" underpaid.

His comments came as Treasury officials review 2010 pay for GM executives, whose salaries must be approved by the agency's pay czar, Ken Feinberg. That's because GM is among companies that received billions in federal money under the $700 billion Troubled Asset Relief Program.

Lutz initially announced his retirement from GM in February 2009, complaining about government oversight attached to billions in federal aid that kept GM afloat. He later chose to stay with the company, heading the marketing and communications department.

[Nethead]

The man without whom the SSR would not have been possible--a legend in his own mind...

[FoMoJo]

He always seemed more of the marketing and bean-counter type to me - same as Iacocca even though he started as an engineer.

What's impressive is that he is still functioning reasonably well at 78.

[GoCougs]

I'm not necessarily a fan but he's completely correct. GM execs are vastly underpaid owing to the immoral act nationalization.

GM won't ever be able to attract the talent need to have any chance of righting the ship.

[2o6]

I'm not necessarily a fan but he's completely correct. GM execs are vastly underpaid owing to the immoral act nationalization.

GM won't ever be able to attract the talent need to have any chance of righting the ship.

Ok, Dagny.

[Galaxy]

I'm not necessarily a fan but he's completely correct. GM execs are vastly underpaid owing to the immoral act nationalization.

GM won't ever be able to attract the talent need to have any chance of righting the ship.

If they had been worth their salt, they would have avoided bankruptcy and the government control that came with it. Government control is their punishment for failure.

[GoCougs]

The only hope of saving GM is by paying way above market value for its execs (and of course, denationalization and killing the UAW, amongst other things).

[FoMoJo]

The only hope of saving GM is by paying way above market value for its execs (and of course, denationalization and killing the UAW, amongst other things).

Yes of course.  Give the execs big salary increases and bonuses and the company will be saved.

[GoCougs]

Yes of course.  Give the execs big salary increases and bonuses and the company will be saved.

Not the only thing, but it's a necessary thing.

Mulally is a perfect example. Dude got a check for $8MM before he ever set foot on Ford property, and has made ~$40MM in the three years since despite the fact Ford to this day is still losing vast sums of money.

And he's worth every cent, probably more.

EDIT: I stand corrected, in theory Ford actually made a profit in 2009, but this was entirely due to special charges and vehicle financing. Ford still loses money on the business of making cars.

[SVT666]

Ford broke even for 2009.

I misread it.  Ford made money in the 3rd and 4th quarters.  Earnings equaled breakeven per share.

[TBR]

No great loss IMHO.  Looks like Lutz is just in it for the money, despite the fact he's quite wealthy. 


Report: Bob Lutz to retire from GM
Robert Snell / The Detroit News
General Motors Co. Vice Chairman Bob Lutz, an industry icon who has helped lead a product renaissance at the Detroit automaker, is retiring May 1, the highest-profile defection since Chief Executive Fritz Henderson's forced resignation in December, according to CNBC.

Lutz, 78, has complained recently about below-market compensation for GM's top executives, and his departure comes amid a sweeping shake-up within the automaker's North American operations.

GM officials would not comment on the report and Lutz did not respond immediately to an e-mail seeking comment.

Lutz has held senior positions at each of Detroit's Big Three automakers and has overseen some of the industry's most daring vehicles, from the Dodge Viper sports car to the Chevrolet Volt extended-range electric car, scheduled to debut later this year.

On Tuesday, Lutz wrote in an e-mail to The Detroit News from the Geneva Motor Show that he is not immediately retiring or leaving GM.

Last month, Lutz told The Detroit News that GM's top 25 senior executives, whose pay packages are being reviewed by the Treasury Department, were "way, way, way" underpaid.

His comments came as Treasury officials review 2010 pay for GM executives, whose salaries must be approved by the agency's pay czar, Ken Feinberg. That's because GM is among companies that received billions in federal money under the $700 billion Troubled Asset Relief Program.

Lutz initially announced his retirement from GM in February 2009, complaining about government oversight attached to billions in federal aid that kept GM afloat. He later chose to stay with the company, heading the marketing and communications department.

And in December, Chairman and CEO Edward Whitacre Jr. named Lutz a special adviser



From The Detroit News: http://www.detnews.com/article/20100303/AUTO01/3030415/1361/Report--Bob-Lutz-to-retire-from-GM#ixzz0h8iDrY50

Inaccurate paraphrasing of a quote often taken out of context.

He actually said that the salaries were too low to attract new talent, which is true.

[r0tor]

Not the only thing, but it's a necessary thing.

Mulally is a perfect example. Dude got a check for $8MM before he ever set foot on Ford property, and has made ~$40MM in the three years since despite the fact Ford to this day is still losing vast sums of money.

And he's worth every cent, probably more.

true... the only way GM will ever get that level of leadership while having executive price caps is if they manage to snag one of those gems that get drafted in the 4th round.

[NomisR]

true... the only way GM will ever get that level of leadership while having executive price caps is if they manage to snag one of those gems that get drafted in the 4th round.

o/  me me me!!!

I can do the job!  Hire me!  Hire me!!

[Raza]

Like I said, I'll run GM for $150K a year plus bonus.  

EDIT:  With a stipulation that I'll only take a bonus if GM makes a profit.

[Submariner]

LOL - yeah, they would have been underpaid, assuming the company made some miraculous turnaround.

I'm all for outrageous upper-management salaries, but only when the company has outrageously good profit forecasts, etc. 

It's almost as laughable as when the UAW was screaming about their sweet pay plans being cut after DECADES of mediocre build quality, documented worker incompetence, billions lost on excessive breaks, etc.

[FoMoJo]

Not the only thing, but it's a necessary thing.

Mulally is a perfect example. Dude got a check for $8MM before he ever set foot on Ford property, and has made ~$40MM in the three years since despite the fact Ford to this day is still losing vast sums of money.

And he's worth every cent, probably more.

EDIT: I stand corrected, in theory Ford actually made a profit in 2009, but this was entirely due to special charges and vehicle financing. Ford still loses money on the business of making cars.

I don't disagree with compensation based on performance.  Most of Mulally's income is performance based.  However, to simply pay executives more does not mean they will do a better job; or that you will get the best management.  The state of the economy leading up to the collapse is proof of that.

As well, divining every nickle for the sake of the shareholder is never the best philosphy.  You may build the best product, you may use the most innovative methods, you may cut expenses to the bone but if you ignore the fact that industry is the vehicle that propels the economy, then you won't have many customers that can afford your product.  The recent economical collapse, again, is proof of that.

[FoMoJo]

LOL - yeah, they would have been underpaid, assuming the company made some miraculous turnaround.

I'm all for outrageous upper-management salaries, but only when the company has outrageously good profit forecasts, etc. 

It's almost as laughable as when the UAW was screaming about their sweet pay plans being cut after DECADES of mediocre build quality, documented worker incompetence, billions lost on excessive breaks, etc.

That's down to bad management.  

[GoCougs]

I don't disagree with compensation based on performance.  Most of Mulally's income is performance based.  However, to simply pay executives more does not mean they will do a better job; or that you will get the best management.  The state of the economy leading up to the collapse is proof of that.

As well, divining every nickle for the sake of the shareholder is never the best philosphy.  You may build the best product, you may use the most innovative methods, you may cut expenses to the bone but if you ignore the fact that industry is the vehicle that propels the economy, then you won't have many customers that can afford your product.  The recent economical collapse, again, is proof of that.

Compensation is rarely based on performance. The only proper (and most common) basis for compensation is market value.

"You get what you pay for" holds true in employee compensation as much the rest of life. It's not a 100% guarantee, but it's the best (and only moral) course.

Mulally got an $8MM check before he ever set foot on Ford property as an employee. He was worth every penny, even if he proceeded to destroy the company.

The recent economic collapse is the result of government penchant for the creation of adverse monopolies via "greater good" business regulation. Who got paid what is/was irrelevant.

[Byteme]

I guess the real proof of this discussion might be to look at the compensation packages of GM management and compare that to the company's performance for the period 1975-2008.  I doubt there is a positive correlation between what the top tier of executives were earning and GM's performance.

All too often you don't get what you pay for; you get far less.

[GoCougs]

I guess the real proof of this discussion might be to look at the compensation packages of GM management and compare that to the company's performance for the period 1975-2008.  I doubt there is a positive correlation between what the top tier of executives were earning and GM's performance.

All too often you don't get what you pay for; you get far less.

Think maybe proof lies not in one corporation but in the 100,000+ corporations, each with highly-to-obscenely paid executives, that serve as the backbone of the largest, strongest and most durable economy the world has ever seen?

(Yes.)

[FoMoJo]

Compensation is rarely based on performance. The only proper (and most common) basis for compensation is market value.

"You get what you pay for" holds true in employee compensation as much the rest of life. It's not a 100% guarantee, but it's the best (and only moral) course.

Mulally got an $8MM check before he ever set foot on Ford property as an employee. He was worth every penny, even if he proceeded to destroy the company.

The recent economic collapse is the result of government penchant for the creation of adverse monopolies via "greater good" business regulation. Who got paid what is/was irrelevant.

Market value is very erratic.  You cannot make long-term decisions based on current market value.  This is at the core of bad decisions made by many in management.  They seemed not able to think in the long term when negotiating labour contracts for example.  Instead of considering the long-term impact of building a legacy of debt due to labour demands for compensation, pension and health care costs, they took the short-term solution of giving in and reducing the content and quality of the product.  It was one of the many factors that led to the decline of the economy in that domestic product could no long compete on an equal basis with imports thereby earning the reputation of poor quality.  As well, it led to many manufacturers seeking off-shore labour thereby reducing the employment positions available for the prime consumer base of the product.  It's what happens when greed is the motivation.

As for government intervention, it was not by choice.  However, when business fouls up so badly there is little choice but for government to intervene lest the collapsing economical sectors leave but a roving nation of vagabonds.  That government, the public, intervenes, provides the mechanism to stave off collapse until enough is done to stablize the structure; but at a much depleted size.  Again, it is a short-term solution - akin to priming the pump - but better than certain death. 

That Ford was able to survive as it did was due to the fact that it was a couple of years ahead of the others as far as implementing its survival strategy.  It was put in a very vulnerable position by the high-flying 'Jack-Ass' Nasser; the epitomy of reckless, short-term - though well compensated - executive mismanagement.  The decisions to purchase scrap yards and badly managed relics of the past drained the company coffers so there was no money left for product development; as well as meeting the contractual obligations of the labour legacy.  Measures - the first was to fire Nasser - were taken to downsize by closing plants and selling off non-core assets.  As well, the entire company was mortgaged to raise money, about $20 billion, for product development.  This was started before Mulally was hired.  It was then that the 'executives' of the other domestics went begging to Washington saying that if they didn't get a few billion dollars, they couldn't meet their payment obligations for the next month.  Their short-term-mismanagement-method had been reduced to how-to-survive-next-month. 

Yet, so many blame the unions and government.

[FoMoJo]

Think maybe proof lies not in one corporation but in the 100,000+ corporations, each with highly-to-obscenely paid executives, that serve as the backbone of the largest, strongest and most durable economy the world has ever seen?

(Yes.)

I think it's fair to say that much of the wealth had been built during a time of conservative decisions made by conservatively compensated executives.  Obscene decisions made by obscenely compensated executives followed which resulted in the (near) collapse of the entire economy.

[NomisR]

Market value is very erratic.  You cannot make long-term decisions based on current market value.  This is at the core of bad decisions made by many in management.  They seemed not able to think in the long term when negotiating labour contracts for example.  Instead of considering the long-term impact of building a legacy of debt due to labour demands for compensation, pension and health care costs, they took the short-term solution of giving in and reducing the content and quality of the product.  It was one of the many factors that led to the decline of the economy in that domestic product could no long compete on an equal basis with imports thereby earning the reputation of poor quality.  As well, it led to many manufacturers seeking off-shore labour thereby reducing the employment positions available for the prime consumer base of the product.  It's what happens when greed is the motivation.

As for government intervention, it was not by choice.  However, when business fouls up so badly there is little choice but for government to intervene lest the collapsing economical sectors leave but a roving nation of vagabonds.  That government, the public, intervenes, provides the mechanism to stave off collapse until enough is done to stablize the structure; but at a much depleted size.  Again, it is a short-term solution - akin to priming the pump - but better than certain death. 

That Ford was able to survive as it did was due to the fact that it was a couple of years ahead of the others as far as implementing its survival strategy.  It was put in a very vulnerable position by the high-flying 'Jack-Ass' Nasser; the epitomy of reckless, short-term - though well compensated - executive mismanagement.  The decisions to purchase scrap yards and badly managed relics of the past drained the company coffers so there was no money left for product development; as well as meeting the contractual obligations of the labour legacy.  Measures - the first was to fire Nasser - were taken to downsize by closing plants and selling off non-core assets.  As well, the entire company was mortgaged to raise money, about $20 billion, for product development.  This was started before Mulally was hired.  It was then that the 'executives' of the other domestics went begging to Washington saying that if they didn't get a few billion dollars, they couldn't meet their payment obligations for the next month.  Their short-term-mismanagement-method had been reduced to how-to-survive-next-month. 

Yet, so many blame the unions and government.

Based on the way businesses are run today, it's really difficult to plan anything long term as it usually revolves around quarterly profit, budgeting and everything related.  Short term gains trumps long term goals as majority of the management's jobs depends on the short term gains.  And the short term gains is what wall street and investor look at. 

Of course it's a lot easier for private/smaller firms to focus on this as is bigger/publicly traded firms. 

[FoMoJo]

Based on the way businesses are run today, it's really difficult to plan anything long term as it usually revolves around quarterly profit, budgeting and everything related.  Short term gains trumps long term goals as majority of the management's jobs depends on the short term gains.  And the short term gains is what wall street and investor look at. 

Of course it's a lot easier for private/smaller firms to focus on this as is bigger/publicly traded firms. 

Exactly. 

Everybody is greedy for the fast buck.  If they don't get it, or they lose it, they blame the government.  I blame the "ME" generation .

[NomisR]

Exactly. 

Everybody is greedy for the fast buck.  If they don't get it, or they lose it, they blame the government.  I blame the "ME" generation .

Well, it's everyone else except the one in the mirror.

[GoCougs]

Market value is very erratic.  You cannot make long-term decisions based on current market value.  This is at the core of bad decisions made by many in management.  They seemed not able to think in the long term when negotiating labour contracts for example.  Instead of considering the long-term impact of building a legacy of debt due to labour demands for compensation, pension and health care costs, they took the short-term solution of giving in and reducing the content and quality of the product.  It was one of the many factors that led to the decline of the economy in that domestic product could no long compete on an equal basis with imports thereby earning the reputation of poor quality.  As well, it led to many manufacturers seeking off-shore labour thereby reducing the employment positions available for the prime consumer base of the product.  It's what happens when greed is the motivation.

Market value isn't erratic, and one must make long term decisions based on current data.

Detroit could not have gone to war with the UAW. Society and government in general was simply far too pro-union at the time. Detroit would have lost, and the companies destroyed (nationalized).

A company cannot survive by selling its product only or primarily to itself (i.e., employees). It's impossible long term. And despite the massive decline of Detroit the last two decades US employment reached historic lows and was otherwise quite low.

As for government intervention, it was not by choice.  However, when business fouls up so badly there is little choice but for government to intervene lest the collapsing economical sectors leave but a roving nation of vagabonds.  That government, the public, intervenes, provides the mechanism to stave off collapse until enough is done to stablize the structure; but at a much depleted size.  Again, it is a short-term solution - akin to priming the pump - but better than certain death.  

Sure there was a choice; and you're assuming all is now good. It is not. GM and Chrysler are doomed to fail as have all nationalized auto companies before them (read: England). Simply what was done was staving off the death by blowing tens of billions of immorally confiscated tax money.

That Ford was able to survive as it did was due to the fact that it was a couple of years ahead of the others as far as implementing its survival strategy.  It was put in a very vulnerable position by the high-flying 'Jack-Ass' Nasser; the epitomy of reckless, short-term - though well compensated - executive mismanagement.  The decisions to purchase scrap yards and badly managed relics of the past drained the company coffers so there was no money left for product development; as well as meeting the contractual obligations of the labour legacy.  Measures - the first was to fire Nasser - were taken to downsize by closing plants and selling off non-core assets.  As well, the entire company was mortgaged to raise money, about $20 billion, for product development.  This was started before Mulally was hired.  It was then that the 'executives' of the other domestics went begging to Washington saying that if they didn't get a few billion dollars, they couldn't meet their payment obligations for the next month.  Their short-term-mismanagement-method had been reduced to how-to-survive-next-month.  

Ford ain't out of the woods yet by a long shot. Remember it borrowed some $30B from non-government sources, and only made a "profit" in 2009 from special charges and from financing. Remove those two aspects and Ford still loses money on the business of making cars.

Yet, so many blame the unions and government.

Government is to blame for creation of unions, and unions are to blame for destroying Detroit.

[MX793]

The man without whom the SSR would not have been possible--a legend in his own mind...

Lutz joined (rejoined, he worked for EuroGM in the late 60s) GM in '02, the SSR came out in '03.  It takes a hell of a lot more than a year to bring a vehicle to production (in other words, the SSR was underway well before Lutz and he had little to nothing to do with its development).

On the flip side, he actually did have a hand in revival of Cadillac.  He also supposedly had a hand in the development of the BMW 3-series back when he was an exec with BMW in the 70s.  And the original Ford Explorer when he was at Ford.  And the Dodge Viper when he was at Chrysler.

[FoMoJo]

Market value isn't erratic, and one must make long term decisions based on current data.

Yes and no.

Detroit could not have gone to war with the UAW. Society and government in general was simply far too pro-union at the time. Detroit would have lost, and the companies destroyed (nationalized).

Nonsense.

A company cannot survive by selling its product only or primarily to itself (i.e., employees). It's impossible long term. And despite the massive decline of Detroit the last two decades US employment reached historic lows and was otherwise quite low.

Employees do not buy only products made by their employers.  However, they may purchase from others (other goods) who, in turn, purchase from their employers.  We're not talking strictly about cars here.

Sure there was a choice; and you're assuming all is now good. It is not. GM and Chrysler are doomed to fail as have all nationalized auto companies before them (read: England). Simply what was done was staving off the death by blowing tens of billions of immorally confiscated tax money.

...and you're assuming that it's doomed to fail.  If too many others share your attitude then it must, certainly, fail.  Of course, without the bailout, it would have already failed.

Ford ain't out of the woods yet by a long shot. Remember it borrowed some $30B from non-government sources, and only made a "profit" in 2009 from special charges and from financing. Remove those two aspects and Ford still loses money on the business of making cars.

That's what I said...and it was $18 billion; though it has a total debt load of some $34 billion but with a cash and marketable securities values of $25 billion.

Government is to blame for creation of unions, and unions are to blame for destroying Detroit.

Business mismanagement is to blame for the creation of unions.

[NomisR]

Business mismanagement is to blame for the creation of unions.

I disagree, people are paid what the market shall bare.  If there are enough people that are willing to do one job at a lower wage using similar skills, why would you spend double that for the same?  Market wage prevails.  If those people do not wish to work at such a low wage, they are free to take their marketable skills elsewhere, nobody is forcing them to take the low wage jobs.