Company man: Q&A with Bob Lutz
Company man: Q&A with Bob Lutz
Bob Lutz tends not to speak in abbreviations. More often than not, it’s “gasoline,” not gas, “General Motors,” not GM. Perhaps it’s indicative of a man who came of age a couple of generations before cable TV, the Internet and Twitter frayed everyone’s attention spans into spiderweb strands. Perhaps it’s symbolic of his perpetual willingness to go the extra mile for his country and his businesses.
Either way, the loquacious Lutz has earned the extra few syllables per sentence. The automotive legend turned 80 on February 12, but he still looks and sounds vital. Even better, and in contrast to the typical assumption about octogenarians (think Fidel Castro with Pope Benedict XVI) Lutz is still entirely relevant.
After 47 years of executive leadership at companies such as General Motors, BMW, Ford, and Chrysler (on top of 11 years as a Marine attack aviator), Lutz resigned as Vice Chairman of GM and settled into semi-retirement as an industry Übermensch.
His current docket suggests that he’s definitely not out to pasture just yet. Since “retiring,” Lutz has published the bestselling book, Car Guys vs. Bean Counters: The Battle for the Soul of American Business, joined Transonic Combustion’s board of directors, and begun contributing to CNBC and Forbes, as well as consulting for his old fellows at GM.
Among other appointments, Lutz joined the board of directors of VIA Motors in September 2011. On the occasion of VIA’s March announcement of an E-REV electric truck beta test with California’s PG&E that Lutz joined Charged for a candid chat about the value proposition of electric pickup trucks for service fleets, the fate of the Chevy Volt, political misinformation, and of course, his featured turn in last year’s documentary, Revenge of the Electric Car. Lutz showed up looking iconic on a sunny Bay Area day. Well-tanned, in a bomber jacket, sunglasses and his signature white head of hair, Lutz appeared poised to star in another American business success story.
Is there already demand for the E-REVs or are you having to convince people of their value?
Bob Lutz: There’s plenty of demand, but the productionizing of the vehicle is not finished. That’s going to take another six to eight months. What people don’t realize is that just because you produce one or two that you can demonstrate, does not mean that you’ve got the reliability under all weather conditions, all temperatures, all altitudes, all kinds of customer abuse.
For instance, about a year ago, a British guy who was converting Escalades and Range Rovers to lithium-ion batteries said he’d pick me up at London airport and drive me to a conference. It was a 200-mile Range Rover loaded with Li-ion batteries. I said “Are you producing?” He says, “oh yes, we’re producing and selling. It’s totally reliable, what is there that could possibly go wrong?” So on the way from Heathrow Airport to London we get into this torrential rain. We’re driving through puddles that are about four inches deep, and all of a sudden this electric Range Rover comes to a grinding halt right in the middle of the freeway. We needed other trucks to hump us over. It was really, really bad. We were supposed to go to this conference, and we were standing outside in soaking wet suits. And he says, “oh, we never tested it in deep water before.”
So the beta test with PG&E is a part of the preparation?
BL: That’s one of the things VIA is doing that is very good: putting a certain number of beta units into fleets to gather actual day-to-day operating experience. How much maintenance do they need? Are they doing their 40 miles electrically, and if not what are they getting? The experience gained on the beta units will help on the production units.
And once the fleets are using them, I see a market for private sport utilities, because with future fuel economy regulations, it’s going to be hard to produce and sell something like an Escalade anymore. With the mileage requirements mandated for 2020, they’re either going to have to be rationed or be made way smaller. If you imagine a 100mpg Escalade, the big sport utilities that are now decried as irresponsible squanderers of global resources and contributing to global warming suddenly become environmental statements - guilt-free enjoyment of full-size sport utilities, which a lot of people will pay for. Let’s face it, the full-size sport utility is a favorite vehicle of Americans. The only downside is they use so much fuel. If you can make that go away, whether an Escalade costs $65,000 or $85,000, the guy who buys or leases those doesn’t care.
How well adopted within the fleet market do you think the E-REVs will be by the aforementioned 2020 date?
BL: Pretty darn well, assuming they perform well, and that gasoline doesn’t suddenly get cheap again, which would be a long shot. The only way they could do that is with massive federal subsidies, and the country can’t afford that. The current fuel prices aren’t Obama’s fault any more than it was Bush’s fault when it shot up to $4.25 in ‘08. Presidents can’t influence fuel prices.
What’s your take on the status of the Volt and its future prospects?
BL: I can’t speak for General Motors, but it has been successful in its most important task, which is to change the technological image of General Motors, from a laggard in environmental technology to a world leader. I think the Volt has garnered more awards than any other vehicle in history. There was North American Car of the Year, Green Car of the Year, all the magazines gave it Car of the Year. The European Car of the Year jury, which is like 60 journalists, named it Car of the Year. And the awards are still pouring in.
The level of owner satisfaction is extremely high. Quality and reliability is extremely high. But the downside is that the political extreme right has been distorting the facts of the Volt. The Volt passed the government crash tests with a five-star safety rating, and didn’t roll over. But the testing protocol requires that even if the vehicle doesn’t roll, it has to go through the rotisserie maneuver, which is five minutes on one side, five minutes on its back, five minutes on the other side, and then back on its wheels again. At some point during the rotisserie, some fluid leaked out, and three weeks later caused a short in the battery and the vehicle caught fire. I mean, how safe it that? Three weeks should give people adequate time to exit the vehicle.
And what did all these right-wing commentators make of that? “Chevy Volts catch fire.” All of them were talking about “yeah, they all catch fire. GM’s gonna recall ‘em. There’s just another Obama-inspired program - a misguided socialist automotive policy. And not only did they spend a lot of your hard-earned tax dollars creating this vehicle, but now they put a $7500 tax credit on it.” Well, there are a couple of things wrong with all those statements. First of all, the Volt was my idea in 2006. We showed the first prototype at the Detroit Auto Show in 2007. Obama wasn’t elected until late 2008, so Obama could not be the progenitor of the Chevy Volt. And what they also conveniently forget is that the $7500 tax credit for electric vehicles was enacted under the Bush administration.
As for Volts catching fire, the crashed one caught fire after three weeks, and then the NHTSA, in order to determine the root cause of the fire, deliberately mistreated two more battery packs until they caught fire to try to find the root cause of the initial fire. That of course in the media was: “GM grapples with additional Volt fires.” And these people are supposed to be for American jobs? They did such reputational damage to the Volt that the demand dipped to a very low level. So GM did the right thing, which was to idle production for 5 weeks and lay off workers. So here are these right-wing pundits who are always talking about jobs, jobs, jobs. Actually through their irresponsible reporting on the Chevrolet Volt they managed to put American workers out of their jobs for five weeks! It annoys me to no end.
With all that damage, what is the future of the Volt?
BL: It’ll be fine. It’s recovering from that. First of all, the American public has a short memory. After all the Toyota problems people said “Toyota will never come back.” Well, Toyota’s back. If you ask the average American “Did Audi ever have unintended acceleration?” people say, “What’s that? Don’t remember it.” These things do fade away.
By the way, no electric vehicle has ever caught fire in normal service, but 275,000 gasoline-powered vehicles burn to a crisp in the United States every year - one every 120 seconds. [Editor’s note: the Bureau of Transportation Statistics’ figure is 250,000 gasoline vehicles per year.] Well, where’s the outrage when gasoline-powered vehicles catch fire? That’s considered normal. Every movie where there’s a crash sequence: bum-BOOM!
As a conservative myself politically, it annoys me no end to see deliberate lying and misinformation coming out where they will trash an outstanding American product and do damage to American employment just to get at Obama. That’s just plain unethical.
But the car will be all right. The reason we made it a Chevrolet instead of a Cadillac is because Chevrolet is GM’s go-to brand. And the Volt is going to be the first American car in a long time that was designed for global markets, meets safety standards the world over. We built all that in at the beginning. It meets European crash and lighting requirements, European bumper standards. It meets Chinese bumper standards. All of that was incorporated from the beginning to where the Volt is exportable without modification throughout the world. And that’s just beginning now. There’ll be good demand in Europe, and very good demand in China, because the Chinese have a lot of money and they love new technology. The Volt will be fine.
What’s the most compelling argument for EVs regardless of political viewpoints?
BL: Energy conservation and - in the case of the VIA truck - cost reduction. Electric drive is just inherently more efficient than internal combustion. With the advances in batteries, I think it’s the wave of the future. We’re in a transition period that’s going to last 10 or 15 years. Ultimately, motor vehicle traffic is going to be all electric, maybe with inductive rails in the highways, where once you’re on the highway you’re no longer running on your battery, you’re running on an inductive charge that comes from embedded cables in the highway. Once the whole system transitions over, we can use petroleum for making plastic.
Early adopters are driving EV sales now, but are there enough of them to propel EVs into the mainstream?
BL: Well, Moore’s Law doesn’t apply to automobiles. Moore’s Law applies to electronics because you can keep miniaturizing the components and take cost and mass out. All of the electronics guys who say that the automobile industry are idiots because they’ve never heard of Moore’s Law, I say, if the rule was that every computer is not allowed to get smaller - they have to be like the computers in the ‘60s where they take up whole rooms - you guys wouldn’t have Moore’s Law either, because you’d have to have that much material!
That’s one of the reasons that cost is going to come down gradually. The big breakthrough is going to come when lithium-ion batteries have about 10 times the energy density that they do today. That would permit a Volt-size battery pack to give you 400 miles. At that point you forget the gas engine and a lot of cost comes out. So ultimately, they’ll be no more expensive than conventional vehicles.
How do you think the movie Revenge of the Electric Car came out?
BL: Well, I think it came out well. As always, I’m ambivalent about the political message. His first movie [Chris Paine’s Who Killed the Electric Car?] implied that GM sold out to the oil companies. And I think - after we got to know each other - he felt bad enough about that movie that he said “I’m gonna do another one.”
I wasn’t thrilled with Dan Neil saying that I was known as a global warming skeptic but that I had obviously had an epiphany. Well, I haven’t had an epiphany. I’m still a global warming skeptic. It was sort of an attempt to say “he used to be a bad guy, but now he’s come over to the good side.” No. I wanted to do the Volt because my competitive instinct is such that if sports cars are in vogue, then we’ll lay down the specs and design one to kill all the competitors. But at this point what was in vogue in the nation’s media was, “hey, that horsepower stuff was yesterday. The really smart companies can figure out the vehicles of a less energy-consumptive future.” And Toyota was winning that race because of the Prius.
The Prius rubbed off so much on other Toyotas that I’ve encountered people who drove a Toyota Sequoia, and they’d say, “It’s a Toyota, so it uses less fuel.” I’d say “Really? What’s your highway mileage?” “Oh, I get about 14.” Well a [Chevrolet] Tahoe gets 22. So that Prius green image just radiated out on the whole Toyota brand, and it was getting to be really damaging in sales. People would say, “the Japanese can figure this stuff out. Detroit is braindead.” Something had to be done. It really fired up the competitive juices, and I said “all right, if that’s where the contest is, we’ll win that one, too.”
Let’s go for a spin
Just as we've comfortably settled into a new E-REV alpha unit pick up truck, Mr. Lutz regales us with the story of the first time he ever drove. “It was a '39 Ford coupe, when I was eight years old,” Lutz said. “I asked my uncle what a clutch was, and he said, ‘Ah, you have to experience it.’ We were in our driveway and he said, ‘Put your foot on that thing over there, slowly lift off, and add throttle.’ Anyway, I popped the clutch then hit the throttle, we went peeling out of the driveway, did a 180, and came back and hit our own stone wall.”
Luckily for us, the former GM Vice Chairman has gotten the hang of this driving thing in the 70+ years since his dubious debut. Even if he hadn’t, there’d be no such clutch problems in the plug-in electric hybrid E-REV truck. And the integrated dashboard iPad should be able to handle searching for directions or the nearest tow service should something unexpected happen.
David West, Chief Marketing Officer of VIA, has informed us that this alpha unit of the Extended-Range Electric VTRUX has a hand-built gear box, so "it's still a bit whiny" compared to the beta units that VIA will debut for PG&E tomorrow. Also, the one we’re riding in only packs about 250 hp, compared to the 402 hp of a production unit.
Any inkling of doubt proves for naught, however, as Lutz powers up the E-REV to the total silence that he says reminds him of his baby, the Chevrolet Volt. “Everyone says its a luxury car,” Lutz said of the Volt, “because it rides easy, and it makes no noise.”
After a smooth few miles up the bay-side coast of the San Francisco peninsula, we make it back to parking lot, roll to a stop to the sound of what EV supporters hope will be the new Heartbeat of America: no sound at all.