Auto industry veteran blames ‘management incompetence’ – not unions – for Detroit’s demise

Former GM Vice Chair Blames ‘Management Incompetence’ – Not UAW – for Detroit’s Demise

By Peter Gorenstein | Daily Ticker July 7, 2011

Today’s Daily Ticker guest Bob Lutz has nearly 50 years of experience in the auto industry. Most of that career was spent with Ford and General Motors, from which he retired in 2010 as the Vice Chairman. Known as an outspoken straight-shooting executive, Lutz is also an unabashed car lover.

Now in retirement, Lutz is still as vocal as ever about cars and the auto industry. In his new book, Car Guys versus Bean Counters: The Battle for the Soul of American Business, Lutz documents what he believes was the greatest factor in the demise of the U.S. auto industry.

No, it’s not the unions (although that contributed). No, it’s not uncompetitive wages compared to Asian manufacturers.

His answer: “Management incompetence”

Over the course of his career, “management became way too scientific, B-school oriented; way too cost focused; and it was almost considered childish to be to be enthusiastic about automobiles,” Lutz explains to Aaron Task in the accompanying clip.

Lutz says auto executives worried too much about hitting the numbers and not enough about creating a product consumers wanted to buy. “That is a fundamentally flawed approach,” he blames on American business schools. The “over-fascination” and “over-focus on the numerical side of the business” is endemic in U.S. business and has resulted in public cynicism,” Lutz says. “The American public is sick of Wall Street, the American public is sick of American business, is sick of job outsourcing, is sick of the loss of our industrial base.” (See: Bring It Home! “No Excuse” Not to Manufacture in U.S., Bob Lutz Says)

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