Car Guys vs. Bean Counters: The Battle for the Soul of American Business

by Robert A. Lutz

“One of the most acute books about management and how com­panies work in practice that I have read in a long time. If anyone wants to know exactly how the U.S. auto industry got into trou­ble, here is your guide.”
—John Gapper, FINANCIAL TIMES

When Bob Lutz got into the auto business in the early 1960s, CEOs knew that if you captured the public’s imagination with innovative car design and top-quality crafts­manship, the money would follow. The “car guys” held sway, and GM dominated with bold, creative leadership and iconic brands like Cadillac, Buick, Pontiac, Oldsmobile, GMC, and Chevrolet.

But then GM’s leadership began to put its faith in numbers and spreadsheets. Determined to eliminate the “waste” and “personality worship” of the bygone creative leaders, management got too smart for its own good. With the bean counters firmly in charge, carmakers, and much of American industry, lost their single-minded focus on product excellence and their competitive advantage. Decline soon followed.

In 2001, General Motors hired Lutz out of retirement with a mandate to save the company by making great cars again. As vice chairman, he launched a war against the penny-pinching number crunchers who ran the company by the bottom line and reinstated a focus on creativity, design, and cars and trucks that would satisfy GM’s customers.

Lutz’s commonsense lessons, combined with a generous helping of fascinating anecdotes, will inspire readers in any industry.

Genres: Business, Nonfiction, History, Economics, Cars, Biography, Transport

265 pages, Kindle Edition

First published June 1, 2011

Reviews

[MattA · Rating 2 out of 5]

Started out with an easily readable style, and interesting insights and comments.

I put it down when he started whining about the "liberal media". He made an arguable point that economic reporting could be better in the U.S. if economics reporters actually had degrees in economics. Then not more than one page later he declares global warming to be untrue.

So, a journalist without an economics degree is unqualified to write about economic issues, but a guy with a degree in production management and an MBA is qualified to comment on global climate change?

Hypocrite or egomaniac. Either way, not worth my time.

[Jay French · Rating 3 out of 5]

You can imagine the kind of guy who survived the politics of the largest manufacturing organizations in the world, getting called back from retirement to work on increasingly bigger jobs, not quite reaching the top but close enough to provide commentary. This kind of guy will have opinions on everything. Lutz certainly does. You get a lot of inside baseball on the GM of the late 90s and early 2000s. Lutz is best when talking about the cars and the design process. He is not at his best talking politics and management, journalism, or science. But he’s still got opinions. Lutz seems to be the kind of guy you have to keep your eye on. He keeps saying how he is a funny guy, but it certainly doesn’t show in his writing. Because of this inconsistency, I took what he wrote with a proverbial grain of salt. I found this very interesting for the descriptions of the foibles of the design process at GM in the 90s, and the work on the Volt. His descriptions of the people involved in leading car design and manufacturing are well done. I feel it will not stand the test of time as well as, say, John Delorean’s book – the issues seem to be tied to the times more than anything (the government takeover, the rise of Toyota, etc.). As a business book, the story of how GM lost its way in design is a great cautionary tale for all big market-leading companies, and that’s worth reading.

[Al · Rating 4 out of 5]

While I didn't agree with all of his political insights, Bob Lutz' new book on his years as vice chairman at General Motors is a great read, primarily for those who care about American cars and are stumped when car companies make ludicrous mistakes. Lutz provides a true insider's view as to how General Motors made many self-inflicted wounds which were compounded by economic pressures out of its control that led to its unavoidable bankruptcy. Bean counters and MBA owning brand managers are ripped apart by Lutz in anecdote after anecdote. Likewise, the import biased media comes in for devastating criticism. Lutz doesn't spare himself criticism when it comes to being wrong, but that's not very often. Though part of his thesis is that you can't have success in the auto industry applying the same number crunching analysis used in other industries, he ends his book with some lessons learned at GM that can be applied to other American businesses as well. As a Chevrolet truck owner during the time period covered, I found the whole book insightful. Lutz is now retired from GM, but he continues to step on toes in the auto industry. Recommended.

[Luke · Rating 3 out of 5]

Had to read for school. Learned some interesting things about the car industry and corporate leadership but there’s also just a lot of complaining going on the whole time.

[Ken · Rating 2 out of 5]

The book offers many interesting insights about automobile design and marketing strategy within the car industry, but the author's neo-conservative political agenda was far too intrusive. His belief that global warming is a left-wing media hoax, and that Fox News is somehow notable for its courageous stand against the obvious is flat-out ridiculous. Although I suppose it is not surprising that a leading CEO of the automotive industry would maintain that car emissions and global warming are not linked, just as cigarette manufacturers were convinced that smoking did not cause cancer and it all boils down to a matter of 'personal choice'. I'm sure that England's Prince Charles could probably cook up a dandy defense of 'The Divine Right of Kings' as well. I do agree with Mr. Lutz's overall take on the American car industry in that he feels that, "The operation was a success, but the patient died". I accept and understand his observation that too much 'over-thinking' goes on in the industry, and I agree that it's probably because something is dreadfully wrong with the business management curriculum at the university level. But, I think that his opinion that this was caused by a 'left-wing' bias in American higher education is ridiculously absurd. I suppose the author is trying to come across as 'a no-nonsense kinda guy', but his neocon views soured me to his more valid positions.

[Amanda Spacaj-Gorham · Rating 5 out of 5]

Lutz's direct, sometimes harshly condemning, sometimes humble always open style and voice really come through in this utterly readable cross between an autobiography and business critique.

He knows the car business like no other. He's no climatologist. Don't be surprised that he's giving his opinions on the car business and business professionals, because the title implies that will be the content of the book. (I read a few reviews when I was picking between this and some other very attractive books that criticized him for being opinionated and basically thinking that he knew all about the car business...duh, he claims it in the title.) I seriously doubt the reviewer from Bloomberg read the whole book, based on his review. His review read like he wrote it before sort-of reading the book.

Bob Lutz is the only man I can think of who has been at the helm of all of the Big Three. Let that sink in...He was part of the creation of the Dodge Viper, Ford Explorer, and endless GM products as well a the BMW 3-Series, (He was also Executive Vice President of sales at BMW for three years) so I don't knock him for talking like a "know it all" on anything car-business related.

[Barry · Rating 1 out of 5]

Somewhere there is book that discusses the soul of American business, the important guiding principles of economic success and how American companies have lost their way. It will provide insights for how to get us back on track with a deep and nuanced understanding of the business culture and relevant illustrative anecdotes. Wherever that book is, it is not between the covers of this one. Perhaps the book would have been better served by the title Bob Lutz vs. The Intellectuals: How I saved GM. The amount of time spent on what was, ostensibly, 'the point' could have fit into a single chapter and adequately summarised in single page. Disappointed would be an understatement.

[Alicia · Rating 2 out of 5]

I made it through this book - barely. While the author respects design, the writing is terrible and he's a raving lunatic. His position on many topics is so biased, it undermines the validity of nearly everything else. I learned a lot about GM... maybe. Most of what I learned probably wasn't true.

[Don · Rating 4 out of 5]

infallibility & self-worship, hubris and arrogance, 5-5's, 50% of sales to 60s, too much change too many changed parts quality tanked 82-85, cafe std, affordability drives use, yen exchange rate, labor pool, 90s healthcare & strikes, contracts gambled that healthcare like other things with technology may decrease, not market labor rates, contingent settlements drove healthcare costs up, wrong people in charge, journalism only vs knowledge of economics and topic of article, global warming religion, 20% fiat suzuki isusu diesel fuji subaru, toyota played gm, numi prism and chrysler mitsubishi were biased vs same toyota and mitsubishi, vibe and matrix bias of consumer reports, union always more never less, product design too democratic with too much input opposite of apple ipad iphone, often wrong seldom in doubt, errors of commission less than errors of omission, product focus vs analytical masturbation, supplier innovations like apple, less is more in management and products, iaccoca example with media, gas 1/4 others, 80mpg fuel cell equals diesel hybrid, chapter 11 solution to drop hummer saturn 08 mortgage crisis, strike fund too big thus nego, close plants drop labor pool, irreverent meetings and humor to allay fear.

[Jeremy · Rating 1 out of 5]

This is just an awful book. I was up for an insider's view of the auto industry, and some play-by-play between the car companies, labor/management struggles et al. But Lutz is so cocksure so dismissive of so many things and people, he is thoroughly unreliable as a narrator.

[Cristina · Rating 4 out of 5]

Interesting read if you wan to know/understand more about the Automotive industry, capitalism, how some CEOs think. It's only one man's opinion, though... :) I read it because I wanted to understand how this man thinks..

[Omar Halabieh · Rating 5 out of 5]

This book is an account of Bob Lutz's stint at General Motors from 2001 t0 2010. When he joined GM, he did so with the following intent and strategy: "Phase I. Exert my influence to improve products already in the pipeline and use my communication skills and reputation with the media to have them seen in the best possible light. Phase Two. Lead the creation of the future portfolio: cars and trucks of unsurpassed design excellence and characteristics. Cars and trucks so good, so desirable, that customers would pay full price and wait for delivery if necessary. Phase Three. Permanently change the culture of the company, especially around design, planning, and engineering, in such a way that mediocrity (or the dreaded adjective "lackluster," so frequently applied to new GM cars) would be permanently banished."

A common theme in the book - and as eluded to in the title - is the role of the over-analytical wave of thinking (primarily driven by MBA's) which was a contributing factor to the demise of GM. Bob also covers the other factors, that led to the eventual Chapter-11 filing, including rising fuel prices, staggering health insurance costs etc.

A very insightful book on the dynamics of the automobile industry both in the US and globally, as well as on leadership, management and execution. The lessons learned can be easily extended to various other industries - which to varying degrees have or are experiencing similar challenges in their respective domains. A recommended read!

Below are key excerpts from the book that I found particularly insightful:

1- "It's time to stop the dominance of the number crunchers, living in their perfect, predictable, financially projected world (who fail, time and again), and give the reins to the "product guys" (of either gender), those with vision and passion for the customers and their product or service...With the advice and support of their bean counters, absolutely, but with the final word going to those who live and breathe the customer experience. Passion and drive for excellence will win over the computer-like, dispassionate, analysis-driven philosophy every time."

2- "When a major competitot has a systemic cost advantage of that magnitude, he can use it in various ways: - increase marketing spending, -underprice his competitor, -add more features, quality, and luxury to his product, -increase profitability, enabling a faster product renewal cycle. The Japanese did it all!"

3- "Health care costs grew and grew, accelerated, as always,by America's unique "contingent fee" legal system, whereby the penniless victim can see justice done by hiring a lawyer who is willing to help "for free" in exchange for a percentage of a possible settlement. Noble intent, but that's not how it turned out...These wasteful procedures and their attendant costs are all due to our (unique to America) "contingent fee" legal system, which results in our health care being the most expensive in the world while at the same time not necessarily the best."

4- "By no means am I suggesting that the media's reverse chauvinism (loving "foreign" more than "domestic") was the leading cause of GM's decline, but together with worker wages and benefits at unaffordable levels, crippling health care costs, and government regulation that caused seismic upheaval in manufacturing and engineering, it created an environment with no margin for error, where only the most astute leadership could prevail. As we have seen, and as the following will abundantly demonstrate, GM's leaders were not up to this admittedly monumental task."

5- "The company cared about...minimizing cost and maximizing revenue - but assumed that the customer desire for the product was a given...I maintain that without a passionate focus on great products from the top of the company on down, the "low cost" part will be assured but the "high revenue" part won't happen, just as it didn't at GM for so many years."

6- "Meanwhile, Ford and Chrysler, the poorer cousins, focused on the Japanese model: don't create new plats unless necessary, automate only where absolutely needed for quality or worker fatigue, seek the optimum blend of humans and machines. It worked, just as decades later it's working for GM as well as it ever worked for Toyota."

7- "Without question, the brand management approach works in the world of soap, toothpaste, and cleaning supplies. The error lies in transposing it to cards, which every one of the former consumer products CEOs tried to do. Here's where it goes awry: a brand manager in the car business can't do a small test batch. Changing the design or engineering of a car consumes hundred of millions of dollars and three years. And the federal government doesn't care whether it's a test batch or not; every car model, regardless of production volume, must be fully certified from an emissions and safety standpoint. Unlike a Crest toothpaste tube, these cars, assuming a negative test outcome, will hang around as worthless orphans for years."

8- "Strongly held beliefs:

1) The best corporate culture is the one that produces, over time, the best results for shareholders.

2) Product portfolio creation is partly disciplined planning, but partly spontaneous, inspired, all-new thinking.

3) There are no significant, unfilled "Consumer Needs" in the U.S. car and truck market (except in the commercial arena).

4) The VLEs must be the tough gatekeepers on program cost, content, and investment levels.

5) Much of today's content is useless in terms of triggering purchase decisions.

6) Design's role needs to be greater.

7) Complexity-reduction is a noble goal, but it is not an overriding corporate goal.

8) We all need to question things that inhibit our drive for exceptional "turn-on" products.

9) It's better to have Manufacturing lose ground in the Harbour Report, building high net-margin vehicles with many more hours, than bieng best in the world building low-hour vehicles that we take a loss on.

10) Remember the Bob Lutz motto: "Often wrong, but seldom in doubt."

9- "Product Planning was another area mirrored in a morass of data, attempting to find a quantitative, reliable, repeatable way to come up with hit products. As with everything else at GM, the approach had sterling intellectual credentials, but in a world driven by a whim, fashion, and fluctuating fuel prices, it just didn't work."

10- "The company struggled with the concept of global budgets cutting through regional lines...Running a company by region is fine for many industries but no longer optimal for car companies. You have to go global, with the regions reduced to marketing and PR entities, as is the case with the Japanese, Koreans, and Germans in the United States."

11- "...Of Course, my recipe had called for a gradual rise over time, not an overnight doubling. The gasoline sticker shock (due to the only partially explicable sudden rise in the price of a barrel of crude) had an even more profound effect on our fortunes than the financial crisis, because GM's buyer group was hit the hardest. With Chevrolet and GMC, we were the nation's leading producers of full-size pickup trucks..., and the market was imploding. Pickups are the preferred vehicles of tradesmen such as carpenters, plumbers, and electricians, and their work had evaporated along with new housing starts."

12- "Making GM more open, more human, more accessible, and thus more likeable is the last, great unfinished task."

13- "...Why did Sir Richard Branson (and others), with no higher education at all, succeed so brilliantly in both the airline and music businesses? The simple answer is: they have a blissful lack of awareness of the analytical science of business. Uninfected by the MBA virus, they simply strive to offer a better product, one that delights the customer. They control costs, of course. And they tolerate a necessary level of bureaucracy. It's essential. But the focus is on the product or service...thus, the customer. American business needs to throw the intellectuals out and get back to business!"

14- "Astonishingly, in this critical product creation area, where the future of the car company hands in the balance, the much-scorned autocratic style of management works well, and numerous success stories confirm it.The big proviso, of course, is that the autocrat must be so steeped in the car business, and have so much taste, skill, intuition, and sense for the customer, as to be nearly infallible."

15- "The job of the CEO is, in large part, making sure the company is seen in favorable light. False beliefs and unjust accusations need to be tackled, not left to fester in the files of the media, to be pulled out when another negative story is due. I do not see the media, or media exposure, as a negative. A frank, open, and candid approach, with lots of easy access to the CEO, is a winning strategy."

16- "In a sense, the decline, failure, and rebirth of General Motors is simply a metaphor for what is happening to the whole United States. The days of absolute industrial and economic dominance that we took for granted and assumed would go on forever are over. They have been over for some time; we just didn't notice it...As a country, we need to go through this painful collective Chapter 11-like experience. For a time, we need to put the "American Dream" of ever-more, ever-bigger, ever-richer on hold as we grapple with the reality that we are, on balance, far less competitive than we need to be."

[Hillsa · Rating 4 out of 5]

This was a quick read, lots of sarcasm for sure, but it made sense. As an MBA and a former CPA, I could relate to a lot of his complaints about so-called bean counters. There IS a such thing as analysis paralysis. Just because you can measure all kinds of data, doesn't mean all that data is useful. Many people get pulled into the trap of shutting down intuition and common sense because the numbers don't support those ideas. I've worked in plenty of companies where the focus is on short-term performance targets and there is an irrational expectation of continuous growth, regardless of how much buyers are already consuming. He does make some very good points, some of the delivery is rough, but the truth hurts. I am DEFINITELY one of those kids whose parents both had American cars, and we only had one in the driveway at any one time because the other one would be in the shop. Aside from a 1970 Plymouth Duster handed down from my great aunt, that I shared with my brother while still in college, I have NEVER owned an American car and I likely never will. I learned from experience that American cars were unreliable and of poor quality. My father got a Datsun B210 as his sales car in the early 80s, transitioned to a Maxima and never owned an American car again. Over the years, he and my mother owned only Japanese cars and never regretted it.

Thinking about when this book was written and comparing it to what's happening in the world now, there are some disconnects. Some things Lutz had a strong opinion on, turns out that he was wrong. But hey, who among us is perfect? We all can look back at things we blew off or predicted 12 years ago and see that things didn't turn out the way we thought they would.

[T S · Rating 3 out of 5]

This book goes through Bob Lutz history with GM and how he saved or helped re-salavage GM. Through this history he addresses an important topic: the problem with American business. Most of the book focuses on GM and his experience with GM which is meant to illustrate what he sees as the problems with American business.

However, the part where he actually focuses on American businesses is very short and only talked about in the conclusion. Despite the shortcomings of the book, I think this is the most important part that everyone should read and has important lessons about business.

The book is not that well written, but gets the point across clearly. He does attack global warming and rants off about some off-topic things some times but for the most part the book stays on topic and if you plow through you can get some value through his story of GE. He does focus a lot on himself and how he saved GM and it is fairly self-centered. I don't know, maybe he was the hero of the day for GM but he certainly makes it seem like that.

Going into this, I was hoping to get a lot more on GM's bankruptcy and the decisions surrounding that and more discussion on that. I was disappointed though, he didn't talk much about that at all. The book was (almost) entirely focused on the more earlier periods of GM's history and more about his role in GM.

[Bern J · Rating 3 out of 5]

I always admired Bob Lutz. After all he ran BMW Motorad for awhile. How cool of a job is that? And he walked the walk as well; riding the bikes as well as building and selling them.
But in this book he's not talking about his time at BMW, he's talking about his time in top management positions at GM, Ford & Chrysler. Lutz is a charismatic , quotable car guy, without a doubt. This book diminishes him in my eyes. He comes off as a bit of a whiner, blaming the bean counters as well as the government for the decline of the American automobile industry while letting the auto execs off easy.
Brock Yates,a long time editor of Car & Driver magazine, wrote a prescient article in that magazine almost 50 years ago ( April 1968) entitled " The Grosse Pointe Myopians". Yates pointed out that their self imposed isolation in Detroit and inbreeding (Lutz afterall was an exec at all of the Detroit Big 3 automakers) prevented them from seeing what transformation was occurring in the country with the shipments of VWs, Toyotas and Hondas arriving

[Rohith · Rating 4 out of 5]

Bob Lutz is a visionary who brought us the most practical environmental-friendly car: Chevrolet Volt.

This book is a systematical dissection of what went wrong with American Businesses especially Car Manufacturing industry. It is not just that. The root cause analysis is done in such a way that any reader with half a mind will realize what the solutions are and as of this writing will be really happy to realize that many of those solutions are already in the process of execution.

Strange thing about Bob's journey in building the Volt is that he designed it out of pride not because he believes in this new age religion called Environmentalism.

The title refers to this concept that many Traditional Americans have been complaining about. American Businesses started to give much more importance to spreadsheet optimizers in deciding the products instead of letting the Designers and Engineers decide that.

This book is definitely not for the folks who are sympathetic to socialism. Others will thoroughly enjoy this biography of General Motors.

[Vinayak Hegde · Rating 2 out of 5]

This is a decent read if you look past the anthropocgenic climate change denials, Trump-like media bashing, rival carmaker badmouthing and some Xenophobia. The book contains some good insights in what ailed GM and how it was turned around with changes in product development.

If there was one message to take away from the book it was reward and incentivize the creators and not the analysts (though they do have a good role to play). The book details the tension between the designer/engineers and the bean counters. Even in a business that is so old and finetuned, there is ample room for creativity.

The book does have some good lessons especially when juxtaposed with the current climate in the automotive industry that is getting disrupted with the triple whammy of Autonomous cars, Sharing/rental and electrification. Tommorrow's car companies will look nothing like today's or of those of yesteryears.

[David · Rating 5 out of 5]

As with the previous book I read recently by Bob Lutz, I was pleasantly surprised how he presents what could easily be a dry subject and makes it interesting along with some of his humor. I found it particularly interesting because I worked in the automotive industry for almost thirty years. I knew many of the names he mentioned, I knew several of them personally, and even worded with some of them. The author perfectly describes the age old struggle between the technical and finance types. But I think the way this was written it should be interesting to almost anyone.

[Kevin Eikenberry · Rating 5 out of 5]

Bob Lutz is a car guy. In his 47 year career he held senior leadership positions at GM, BMW, and Chrysler, then at nearly age 70, rejoined GM as Vice Chairman where he served for nearly ten years.

This book, written in 2011, and released in paperback this spring (with a new Preface), was recommended to me by one of my mentors. I took note and went to Amazon. I’m glad I did.

Read more...

[Steve · Rating 2 out of 5]

A book filled with great anecdotes that only someone such as Lutz could provide, but it was ruined for me with all of his political remarks. Lutz never misses a chance to blame a large part of Big Auto's problems on "leftists", "pinkos", "professors", and "liberals." It only takes a single fact-check to realize he's adding his political opinions for his own enjoyment rather than as factual support for the troubles the industry faced. (That is, it was a bi-partisan Congress that forced Detroit to improve fuel economy, and not any kind of "leftist conspiracy.")

[Michael Boeke · Rating 3 out of 5]

Despite the low-key sexist title and short foray into climate change denial, the core idea of this book - focusing on products and customers - is undeniably worthwhile. Lutz’s thesis is backed-up with lots of interesting anecdotes and examples that drive the point home. Ultimately, there is nothing groundbreaking here. However, it’s a worthwhile read for people interested in the auto industry and for those who are trying to keep their large companies from degenerating into irrelevance.

[Paul, · Rating 3 out of 5]

I read this book in the library during finals instead of studying. I found it interesting to get an insider's take on the bailouts and on the problems that American car manufacturers have been facing since the 1980s.

Lutz is also the first to reasonably respond to the idea that process trumps product by showing examples of how process (if not tied tightly to the goal) can run amok and destroy the product.

[Andrew · Rating 5 out of 5]

This book provides fantastic insight into the automotive industry and really challenges a lot of pre-conceived notions the American public has about Japanese and American automakers. Bob Lutz is obviously biased and keen to provide a revisionist’s history of GM during his era, but there’s a lot of truth to everything he shares. Really engrossing read and analysis of the pitfalls of bureaucratic engineering and media spin.

[William Smith · Rating 1 out of 5]

Very little insight into remaking a struggling car company and a lot of hatred for Japan, the UAW, the media, government regulation, the environment, Al Gore...

Lutz puts a lot of opinion into his book, but most of his opinion about helping GM recover could’ve been summed up on 10 pages. The rest is disdain for anything not conservative or blame placed on external factors.

[Chris Peterson · Rating 2 out of 5]

Came for the discussion of business degree philosophy vs passion. There is some. It was interesting.

But not enough to make up for two chapters in a row that ended with unhinged rants that veered wildly off topic at length.

[Philip LaRoach · Rating 4 out of 5]

Having worked at Delphi & GM at different point in my career I saw some of the events of this book unfold first hand. I think his perspective is interesting and I do believe gut over analysis usually wins.

[Madison · Rating 4 out of 5]

Interesting perspective on the auto industry. However it sometimes came off as whiney. American public hates GM. Press hates GM, foreign car companies have such an advantage over GM, etc. I wish it was less one-sided

[Anthony · Rating 1 out of 5]

I stopped reading when he started denying climate change. To be expected from someone at the top of the car industry, I suppose.

[Jeff · Rating 5 out of 5]

This is a great read to understand the importance of design thinking, told in a easy to consume flow.

[Jen · Rating 3 out of 5]

Informative, to an extent. He also carried heavy biases that he cannot help to show. He also seems narcissistic which makes it a less enjoyable read.