Old Bob Lutz Article

Originally posted around August of 2001.

DETROIT (Reuters) - General Motors Corp. on Thursday said it has hired Bob Lutz, the former Chrysler executive who helped turn around the ailing automaker in the 1990s with his keen eye for distinctive cars and trucks.

The 69-year-old Lutz will become a vice chairman in charge of product development, reporting to Chief Executive Rick Wagoner. He will replace Tom Davis, who retires in the first quarter of next year.

The blunt-talking former Marine is considered within the industry a classic ``car guy,'' who helped shape Chrysler's reputation for making innovative vehicles, such as the Dodge Viper sports car and the hot-selling PT Cruiser.

``At almost age 70, would I do this if the company were in a bad state and there wasn't positive momentum? The answer is no, I would not,'' Lutz told reporters at a press conference at GM's headquarters in Detroit.

GM's shares surged on the news, but later pared gains. In late afternoon trade, GM shares were up 28 cents at $62.95 on the New York Stock Exchange. Since the beginning of the year, GM's shares have outperformed Ford Motor Co. (NYSE:F - news) shares by nearly 20 percent.

The Swiss-born Lutz is the second former top executive of a rival automaker to join GM since Wagoner became CEO in June last year. Last December, GM hired John Devine as chief financial officer, a position he formerly held at Ford.

``Lutz's hiring signals the possibility of a renaissance at GM and heightens our sensitivity to the possibility of more constructive change,'' said Wall Street analyst John Casesa of Merrill Lynch. ``This is a major change in strategy for GM, which has historically relied heavily on inside promotions.''

The hiring of Lutz is the latest step GM has taken to improve its vehicles, whose styling has been derided in recent years as the automaker's U.S. market share has continued to slip.

GM has also hired a number of top designers, including Bryan Nesbitt, who designed the PT Cruiser, and Anne Asensio from France's Renault SA. (RENA.PA).

The most recent embarrassment for GM was the Pontiac Aztek sport utility vehicle, which has failed to sell to expectations and has been criticized for its styling. The Aztek also fueled complaints that GM's top ranks were dominated by executives with financial and sales backgrounds and lacked people with a strong sense of product development.

At a speech earlier this year, Lutz ridiculed many of the concept vehicles displayed at the Detroit auto show, saying they looked like ``angry kitchen appliances.'' ``Ugly cars, no matter what the market, don't sell,'' he said.

Among those concept cars was GM's Buick Bengal roadster, which Lutz praised on Thursday. Lutz said he will examine proposed future GM products, but the earliest that his influence would be seen on a concept car would be a year to 15 months, he said.

Due to the long lead time necessary for designing new models, it will be at least two years before his touch is seen on an actual production car that goes on sale, said Ron Zarrella, head of GM's North American operations.

Lutz started his career at GM, rising to lead sales and marketing for unit Opel in Germany. ``I'm coming back to General Motors,'' Lutz said on Thursday, showing off the GM tie clip and Opel watch he earned during his years at GM.

He bolted for BMW AG (BMWG.F)(BMWG.DE) in 1972 when they offered him more money. He also worked at Ford and was named to the board of directors.

Lutz arrived at Chrysler in 1986, when the company was close to collapsing for the second time in a decade and when many of its cars and trucks were considered outdated and boring.

By the time he retired in July 1998, reaching the rank of vice chairman near the end of his career, Chrysler was hailed for its product design and innovations, one reason that Daimler-Benz bought the company to form DaimlerChrysler AG. (NYSECX - news) (DCXGn.DE).

Since leaving Chrysler, Lutz has headed battery maker Exide Technologies Inc. (NYSE:EX - news) and will continue as its chairman. He also has been seeking funding to start up high-end sport car manufacturer Cunningham Motors. GM said Lutz's agreement does not include any contractual arrangement with Cunningham.

Some question how effective Lutz will be within GM's massive bureaucracy.

``It's definitely a good step,'' said Nick Twork, an analyst with AutoPacific. ``I don't think that one person can fix a car manufacturer. It's not going to be a cure-all from a product standpoint.''

Lutz's employment agreement with GM, effective Sept. 1, runs for three years. He will oversee the development of GM's global product portfolio.

Reporting to Lutz in his new role will be the head of design, the head of engineering and 14 North American vehicle line executives. Larry Burns, vice president of GM research and development and planning, will report to both Lutz and Wagoner.