Wednesday Snippets – Australia Day Edition

It’s a national public holiday downunder.

Time for the annual “eat lamb on Australia Day” ad…… and this year, all of Europe is invited to shed it’s UnAustralianism and join us.

httpvh://www.youtube.com/watch?v=1C89osd7Eic

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The Saab Independence commemoration in Dallas has been run and DONE!

There’s a great photo gallery here. Wonderful to see people getting together to celebrate.

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I’ve written before on Bob Lutz’s tirades against beancounters at GM and the need to build the best product a company possibly can.

GM’s most recent products have benefitted from this approach. As much as I dislike Cadillacs, the new CTS range has received rave reviews and much of it is down to this commitment to quality of design and execution.

Autoblog have a great post from John McElroy today, talking about a secret weapon that Lutz employed in developing these cars – a group of motoring journalists.

It’s a very worthwhile read. Maybe Saab should get some British journos on the phone….

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This is a great photo, dug up from some US national archives by Hemmings.

Check out the Hemmings post for the background and some thoughts on it. Great work by Mark McCourt.

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Next Monday is D-day for my Monte Carlo upgrades.

I took the car in yesterday for a quick look because there was an unexplained noise in the front end. Turned out to be just a front end brace that needed tightening and the difference it’s made with that brace properly torqued is just fantastic.

The work should be finished on Tuesday and I can’t wait!

Lutzisms that Saab could do well to listen to

There was a time when Bob Lutz was talked about in these pages with metaphorical devils horns and pointy tails. I still hold him accountable for the cancellation of products in the last decade that could have benefitted Saab in a very real way.

But all of that doesn’t mean the man doesn’t have smarts, or vast amounts of industry experience. Lutz is still a man worth listening to when he talks about the car business.

Lutz appeared on AutoLine After Hours a few days ago. You can watch the 90-minute episode if you like, but I’ve summarised a few points below, as well as providing some possible adaptations for Saab’s business.

Lutz retired from GM last year and I know he and VM are on good terms (Lutz was the man VM first contacted about buying Saab). Maybe a consultancy would be a good use of some of Bob’s spare time?

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Build the best product you possibly can for the customer.

Lutz compares American beer to premium beers from Germany, Japan and Mexico (in his opinion, the American beers don’t stack up because the businesses are run at a price rather than being operated to make the best product). He also compares international air travel between American carriers and airlines like Singapore Airlines, Qantas, JAL, Swiss and Lufthansa. Again, the US carriers are left severely wanting.

I don’t drink beer, so I’ll have to take his word on that.

I’ve flown international with United, as well as Lufthansa, Singapore, Qantas, JAL, Finnair, Malaysian and a couple of others and I’d completely agree with his air travel contention. I would never fly United out of choice on a Sydney-US route. My most recent US trip was with V-Australia and it was superb in every way (with the possible quibble over the hardness of seats).

Service and the quality of a consumer product are the keys to a consumer-based industry. There’s no way around it. Whilst they do have a fantastic product, it’s widely acknowledged that Saab need to lift to varying degrees in varying aspects in order to compete with the companies they want to compete with.

Saab have to define themselves and then build the best product, and offer the best customer experience possible, in accordance with that definition.

Be a design-driven company

Lutz was talking about the design revolution that’s happened within various arms of GM over the last decade. Conflicts were present within GM because too much power was in the hands of the beancounters and vehicle-line-executives. The designers had little or no authority over the final product they were charged with designing.

This changed when design was given more authority and everyone started to work for the benefit of the product instead of covering their own a$$es.

Personally speaking, I see design as absolutely essential for Saab’s business, for two reasons. Firstly, it’s the car business and good design is a key to engaging the customer at all contact points with the company. Second – and I think this is something that might emerge more as time goes on – Saab’s key identifier, something that differentiates them from almost every other carmaker on the planet, is their Scandinavian origin. This is something that they can genuinely emphasise, esp with everything housed in Sweden once again. Design is such a big part of Scandinavian identity that for me, it’s a no-brainer that it should be a point of genuine emphasis for Saab.

Adding value rather faster than you add cost.

Self explanatory. If you add more features for the customer and can justify your higher asking price by virtue of a better customer experience, then you’re adding value. The key is to find value that costs (say) $800 per vehicle at the manufacturing level and delivers $5,000 worth of extra value at the retail end.

Imagine if Saab could cut $5,000 from their average incentives (over $7,000 per car sold in the US during December 2010).

If a car is successful then you haven’t over-achieved, you’ve done what you were supposed to do.

Lutz cites some people within GM who are a little worried that they might have over-achieved with the Cruze. There’s considerable talk here about the higher production cost of the Cruze compared with the model it replaced. This means they’ve packed more features into the car, which is great for the customer, but consequently they have less wiggle room on transaction price. The car’s been successful for them so far and they’re achieving higher transaction prices as a result (there’s a lesson there for Saab).

The implication here is that people involved are worried that they might have set the bar a little high for future endeavours. Lutz argues that if you’ve succeeded, then what you’ve done is achieve your objective. People should expect success and work for it accordingly.

Be wary of driver distractions

In relation to gadgetry being loaded into cars, which Lutz refers to as “a fashionable trend”.

Lutz’s contention is that if car companies don’t self-regulate in terms of the amount of connectivity they offer, they risk that regulation coming from the government. There is useful gadgetry, and then there is stuff that takes away from the important task of driving, even to the point of becoming distracting and possibly dangerous.

Useful gadgetry is stuff like Bluetooth, navigation, enhanced audio. Connectivity to chat facilities, Facebook, etc, would come under the “distracting” category and this stuff is already being planned for by some companies. Greater tie-ins with mobile operating systems are happening right now (and don’t forget Saab’s co-operation with Sony Ericsson here). The challenge is to include the right things, rather than including everything.

The flagship

Lutz is asked about building a big expensive flagship vehicle to establish Cadillac’s credentials in the luxury marketplace. He sees merit in the possibility of doing a $160,000 car for Cadillac, but acknowledges that such a car would probably cost (i.e. lose) Cadillac around $100million (ballpark), which they’d then have to write off to marketing.

I just thought I’d include this to put the idea of a flagship vehicle into perspective. It’s the sort of thing you can do once you’re up, running and successful (or at least when you have the resources to burn).

Lutz pays some attention to the loss of $100mil in his part of the conversation, but not as much attention as you might think $100mil would merit. (All three panelists agree would be a good statement to make, by the way). But that cost isn’t seen as prohibitive relative to the benefit it might bring.

Saab don’t have $100mil to play with and one would have to ask “What would be the statement they’re trying to make at this point?” anyway.

Saab could indeed benefit from a flagship, but a super-special edition of a current vehicle would suffice as long as it really is distinguishable.

Is Victor Muller the new Bob Lutz?

The name Bob Lutz isn’t one that’ll draw a lot of cheers around here. Lutz is considered to be the man behind the decision to axe so many potential new Saabs last decade, after all.

But ask anyone in the press about Lutz and they’ll tell you they loved him. He was preferred interviewee #1 for the motoring press because he was outspoken and always gave the interviewer a real story they could write about.

I’ve had it mentioned to me in the last few days that Victor Muller is the new Bob Lutz. This was from a member of the US automotive press, one who had interviewed him recently at the 9-5 launch in the USA.

The comparison is due to the fact that Muller, like Lutz, can talk up a storm and every time he fronts up to a microphone, he gives the journalist something they can take away and write a real story about.

Occasionally, Lutz would get himself into some real trouble, like when he called global warming a crock of $h!t. No matter what your position is on that particular issue, I think all would agree that Lutz’s public airing of his own beliefs wasn’t a wise decision because of the possibility he’d alienate so many of GM’s customers.

In that recent interview with Fox, VM had to stop himself from talking about a premium carmaker that Saab are looking to share technology with. I don’t think that was theatre. I think he really did need to take a breath and control his comments because he was getting more and more in depth about what they were looking to do and who they were looking to do it with.

As much as I didn’t like Bob Lutz because of the way he treated Saab, I did like the way he was outspoken and there’s no doubt that when he spoke, people listened.

I’m all for VM having the same amount of ‘pull’ with the press and I’m quite confident he can keep the controversial stories in the bottom drawer and focus on the real stories concerning Saab.

Bye Bye: Bob Lutz retires (again)

Bob Lutz has finally pulled the pin.

DETROIT – General Motors Vice Chairman Robert A. Lutz will retire effective May 1, 2010, capping a 47-year career in the global auto industry that included senior leadership positions at four of the world’s leading automakers.
Lutz, 78, rejoined GM September 1, 2001, as the head of product development, and has led the company’s resurgence in developing great cars and trucks. He also worked at BMW, Chrysler and Ford.
“The influence Bob Lutz has had on GM’s commitment to design, build and sell the world’s best vehicles will last for years to come,” GM CEO and Chairman Ed Whitacre said. “I, along with many other men and women in GM and throughout the industry, have greatly benefited from his passion, wisdom and guidance.”
Lutz said he decided to retire now in part because hot-selling vehicles like the Buick LaCrosse, Cadillac SRX, GMC Terrain, Chevrolet Equinox and Chevrolet Camaro, along with the growing strength of GM’s four brands, prove that a product-focused mindset inside the company is in place for the long term.
“I can confidently say that the job I came here to do more than nine years ago is now complete – the team I have been fortunate to lead has far exceeded my expectations,” Lutz said.

There’s more at GM Media, but that’s enough.
Goodbye, Bob. You were a media guy’s dream but a Saab guy’s nightmare, to begin with, at least.
I’ve got it on pretty good authority from a couple of sources that Lutz was the main man behind several of Saab’s non-releases of product early in the last decade.
I guess the one saving’s grace is that Saab got another chance, which ended up producing a product line that saw them as an attractive asset for Spyker and others during 2009.
Enjoy your retirement.
ADDENDUM
I just added this in comments, but feel it should be added here, too, in the interests of balance….
Bob did do a lot of good things for GM and his time there was worth what they paid him. The over all lift in GM quality under his watch is real.
His quotes, whilst funny a lot of the time, were also on the mark a lot of the time. In fact, if I were a GM guy, I’d probably love him and feel sad today. But I’m not a GM guy.
Bob’s place in Saab’s history will be glossed over everywhere else. But not here.

Bob Lutz speaks on Saab sale, and the 9-5

Bob Lutz, a man who I believe has a reasonable amount of responsibility to bear when it comes to Saab’s current condition, has spoken in Detroit about the looming Saab sale/closure and about the story concerning the movement of the new 9-5 to China.

Börjesson has done a translation for us in comments. The original article appears at Aftonbladet:

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GM boss: Saab 9-5 could be buried

DETROIT. General Motors would rather close down Saab Automobile than sell it to someone the company doesn’t believe in.

– Otherwise, we still risk standing there with all the costs, says the soon-to-be 78-year-old Bob Lutz, who still clings on to a GM top position.

Over the years, Bob Lutz has distinguished himself as the most outspoken GM boss. He has always expressed his opinion, often with punchy formulations. When TT meet him at an analysts’ conference at the Detroit Motor Show, he goes on in his usual style.

Saab’s future, he does not think much of:

– If you want to make a small fortune on Saab, you must start with a big fortune.

It would take much for GM to change course, Bob Lutz thinks.

– We have pressed the wind down button, and now we intend to liquidate the company.

– Rather an end with terror than terror without end.

Powerful advisor

Lutz recently left the post as GM’s head of marketing, which he took on in the summer, when he really had intended to retire after many years as head of global product development. Now he has retained the title of vice chairman and is a powerful advisor to the board.

Bob Lutz is not directly involved in negotiations about Saab, and stresses that he can’t say if the new bids are good or bad.

– But we can’t keep looking at proposal after proposal, we must start decommissioning, he says.

– If there is a really good deal on the way, then of course we’ll take it. It’s all about us needing to get more back than it costs to close down, he states.

But it’s not just about money on the table. GM must also believe in a new owner’s long-term ability.

– A closure, we know what it costs. That we can allocate money for, and then it is finished. But if we sell and it doesn’t work out, we risk having to take all the costs anyway, Bob Lutz says.

No Chinese Buick

He argues that retailers among others could sue GM for damages in case of a bad deal.

The new Saab 9-5, which is ready for production in the factory in Trollhättan, may never reach the market. At any rate, it’s not going to China, according to Bob Lutz.

– No, that’s completely wrong. It won’t become a Buick. Not in the U.S., not in China, and nowhere else either.

– The sad thing may come to pass that it never sees the light of day, even though it is a fantastic car.

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A few thoughts on various bits of this.

– We have pressed the wind down button, and now we intend to liquidate the company.

This is the statement that scares me the most. Others have opined that the appointment of Alix Partners was just contingency planning. Planning is one thing. This is an action. And whilst a whole heap of lower-down spokespeople are saying “yes, we’re still evaluating bids”, Bob is up here saying this.

This one’s a little confusing:

– If there is a really good deal on the way, then of course we’ll take it. It’s all about us needing to get more back than it costs to close down, he states.

As is noted in comments, Bob’s talking about two different sets of circumstances here. A sale involves a financial inflow, and a closure involves a net financial outflow (offset by using Saab’s models elsewhere to produce income).

I think the following quote possibly puts it in more perspective….

– A closure, we know what it costs. That we can allocate money for, and then it is finished. But if we sell and it doesn’t work out, we risk having to take all the costs anyway, Bob Lutz says.

He’s saying there that by selling the company to someone they see as a poor owner, they’ll only defer the costs of closure to a later date because they’re worried they might end up on the hook for the new owner’s failures.

I really think that’s a tenuous line to draw. Surely GM’s negotiators are better than that and can work out a position that gives a new owner reasonable warranties over the machinery and tooling they get, as well as protect’s GM longer term interests.

And this one:

– No, that’s completely wrong. It won’t become a Buick. Not in the U.S., not in China, and nowhere else either. The sad thing may come to pass that it never sees the light of day, even though it is a fantastic car.

Well, I just flat-out don’t believe it.

Those who like to promote arguing a case for closure in purely business terms can’t believe it either, because it just makes no sense whatsoever.

Why would you develop what is reputed to be a very advanced car – better than what your Opel unit in Germany is building now and better than what you’re building in China – and then just scrap it?

You wouldn’t. Everyone know it, including Lutz.

Finally, this one is telling:

He argues that retailers among others could sue GM for damages in case of a bad deal.

If this turns out to be a closure, which is something that I genuinely fear right now (sorry, no way of sugar coating it) then it’ll be statements like this and th circumstances leading to them that GM uses to construct a ‘good faith’ argument.

He’s worried about dealers suing GM if it’s a bad deal. Dealers are going to be knocking on his door in far quicker time if there’s no deal.

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Yeah, I’m genuinely worried that there won’t be a sale. GM senior executives are talking this down for a reason.

I still think that a sale could be possible, but it’s going to have to be a very good offer with very good conditions attached.

How much are the buyers willing to bear? I don’t believe they’re looking for a bargain basement car company. I’ve seen them put to much effort, show too much tenacity, to be swayed into thinking that.

Am I flippin’ out? Saab should send a Turbo X to race Bob Lutz

UPDATE below
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OK, this is a little reckless and stupid. It’s a mission to nowhere, but I can’t help but think it’s a good idea.
Bob Lutz – the guy who pretty much single-handedly killed Saab’s product range at the start of this decade – got on his high horse about the Cadillac CTS-V and dared anyone to come race him. He’d be at the wheel of the Caddy and his carefully selected opponents would run what they brung.
500x_locat_4.jpg Jalopnik are one of those carefully selected opponents and they were scheduled to show up in a Jaguar XFR, but the people at Jaguar have orchestrated a public relations disaster by pulling the big cat out of the event.
Jalopnik are now looking for a new car to take out Maximum Bob and I reckon SaabUSA should call in one of the unsold Turbo X’s and hand it over. If Jalopnik can’t get a factory car from someone then they’ll probably just run the Mitsubishi Evo that they’ll drive to the event in.
The CTS-V has a stonking big LSV supercharged V8 putting out 566hp and the Saab Turbo X puts out 280hp from it’s V6. I reckon Bob’s ego would allow for Saab to throw in a Hirsch tune for the Turbo-X, which would lift its performance a little bit higher (albeit without the needed hardware) to 300hp and 430Nm.
Now those cars would still be a long way apart on paper, but if the track and more importantly, the weather, suited the Saab then it could be closer than you think. If the track had enough corners to suit the XWD system and was at least mildly moist then I think Saab would get maximum props just for turning up when others feared to walk through the door to face Maximum Putz.
This is basically a big show of bravado on Bob’s part. The Saab wouldn’t win and wouldn’t be expected to win but even if the X managed to stay on the track and be mildly competitive then it’d be backslaps all round.
For those who think it’d be an absolute slaughter, I’d like to remind you of the track session SaabUSA held a few years ago, pitting the Turbo X against an Audi S4, a BMW 335xi, a WRX STi and BMW M3.
The Saab was 4 seconds behind the M3 and the STi in the dry, but was bested only by the STi and only by one-tenth of a second when the track was dampened.
What have they got to lose?
The event is only 2 days away now, so it’s probably not even a remote possibility. But I would really love to see Saab step up to that plate and just be part of it. They’ve got a habit of being able to do things people think they shouldn’t be able to do.
Shoving one of his own discarded cars up Bob Lutz’s clacker fits the bill if you ask me.
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UPDATE
Here’s a format I’d like to see…..
Saab could bring a Hirsched Turbo X to the party but the party is now held over two stages to see which car is more versatile.
5 laps on the track, as they’re doing now.
PLUS
5 laps on a dirt rally circuit.
Aggregate time wins.

UPDATE II
Seth Hosko explains my thoughts better than I do in this video on his branding blog.
Good stuff.

Saturday Morning Snippets

I didn’t get to speak with Eric Geers last night.
Earlier in the day, when it may have been easier for him, I was at an art exhibition opening night, where my wife managed to sell two paintings!! Later in the day, when it was easier for me, Eric was busy doing to the public holiday thing.
We will try again.
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GM lesson in PR #3 is how not to ingratiate yourself to someone you’d like to talk to.
David Letterman joked around with Tesla guy, Elon Musk, the other night and slipped in a gag about the Chevy Volt. That’s got GM up in arms and Bob Lutz was wheeled out of his retirement villa to sign his name to a blog entry seeking some Volt-time with Letterman.
If you want to get some time on Letterman’s show, however, I’d suggest that you don’t start your article with a reference to the fact that you don’t think anyone watches the show:

I don’t know if you happened to catch David Letterman Wednesday night. Frankly, I didn’t, nor did many of my colleagues at GM.

You know, I think Dave’s show is crap and so does everyone I work with, but we’d like to be on it…..
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The northern seasons have changed and spring has sprung.
That means the most elegant Saab on earth has been brought out of the garage for a drive and a few new photos.
If Saab ever wanted to do a retro-themed vehicle, a modern version of this would sure attract some interest. Just magnificent.
Cabotine1.jpg
Cabotine2.jpg
I’m sure Golfhunter is going to enjoy this summer.
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One for the Aussies……
Martin W tells me that the distributors page on the Hirsch website now lists City Saab in Melbourne as a Hirsch distributor.
Good news! More on that later.
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I had a car very similar to this tested by an independant mechanic in Sydney yesterday:
1990 Mazda MX5
It turned out to be an absolute waste of my money and time. A total dud. Grrrrrrr.

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