Lutz The Putz

October 20, 2005 at 8:32 pm | Posted in Fun Outdoors, Rants, Technology | 2 Comments

This quote by General Motors Vice Chairman Robert Lutz neatly explains why GM is going down the crapper.

If you have hybrids you’re OK, and if you don’t you’re not … I’d say Toyota scored a major coup with hybrids even though they didn’t have a business case.”

When he said about not having a business case, he meant that it did not make sense to take a high-mileage economy car and hybridize it. First, that is wrong – a Corolla gets about 30-35 mpg while a Prius gets 50. If you do the math correctly, that is a minimum 42% improvement in mileage, while GM plans to get at least a 60% improvement in their hybridized vehicles (most likely an SUV). To me, a 42% improvement is not insignificant. The second point is the one he totally missed — when people consider hybrids, they don’t compare it to a similar non-hybrid, but they’re comparing it to their current vehicle. So, instead of a 42% improvement, SUV-to-Prius converts are looking at a 200% or more improvement in mileage.

Lutz doesn’t realize that Toyota bet that higher gas prices would result in lower SUV sales in favor of smaller cars. Once that happens, they will choose the car with the best mileage, and not necessarily a $20k econobox (after all, they could afford a $30k+ SUV in the first place).

Hey Bob – a competitor taking advantage of your company’s overexposure to SUVs sounds like a good business case. What a clueless overpaid twit. Companies unwilling to take long-term risks will lose to those who do.

(Inspired by this message from the Yahoo! toyota-prius discussion list

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  1. Another gem from Bill Ford, whose company is following GM’s descent:

    A renewed sense of urgency has been instilled at every level of this company to adjust to an abrupt shift in the marketplace with growing demand for vehicles with improved fuel economy … while this shift is something we anticipated, the future arrived faster than we expected because of this year’s sharp spike in fuel prices

  2. Lutz is even more the putz for giving this gem of an excuse for not cutting executive pay. Unlike ordinary workers, who are mere commodities, executive are more like star athletes! Cutting executive pay might cause a TALENT drain!

    Oh, just imagine the TALENT it must take to lose a billion dollars!

    Here’s a quarter back who fumbles every snap and throws five interceptions a game, being paid 50 times more than his Japanese counterpart who passes for 500 yards and 10 touchdowns.

    Computer programming, marketing, painting cars, uphostery … these things don’t take TALENT. Getting drunk before you hit the golf course, that’s talent!


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