DEBORAH AMOS, host:
To find out more about one American carmaker at the show, we turn to Bob Lutz. He is vice chairman at GM, and he joins us from the auto show in Detroit. Mr. Lutz, thanks for taking time to be with us.
Mr. BOB LUTZ (Vice Chairman, General Motors): Thanks for having me.
AMOS: When you first came to GM, what was the culture like, and since bankruptcy, how is it changed?
Mr. LUTZ: Well, when I came to GM, I believe the culture was very strongly internally focused. We had a lot of internal targets on manufacturing and purchasing and things like hours per vehicle in manufacturing and reuse of parts from one model to another. And these were all very legitimate targets and they tended to improve the operation, but they were inwardly focused and not customer focused. And somewhere over the decades, I think, the company had lost the focus that made GM great in the '50s and '60s, which was to focus primarily on products.
And one of the things that I think was able to bring to the company and was given the total freedom to do so was to bring back the focus on the cars and trucks themselves as objects of desire by the public. And that required somewhat of a cultural revolution, but it was successfully accomplished.
And going through the crucible of Chapter 11, it really did permit us to fundamentally fix the company. We were able to get rid of a lot of our legacy costs. We were able to improve the balance sheet. We got rid of a lot of debt. We were able to get a highly competitive wage rate to where we can now say there's probably nobody in the United States in the automobile business whose all-in wage costs is lower than ours.
So a lot of good things happened. And I think what we've tried to do since Chapter 11 is redouble our focus on the product.
AMOS: I want to ask you about China. China's now the biggest auto market in the world.
Mr. LUTZ: Yeah, by quite a measure, yeah.
AMOS: So does that mean that Chinese tastes will eventually drive your designs?
Mr. LUTZ: Well, yes, to a certain extent. Because we do want to make sure that we're successful in the world's largest and fastest-growing automobile market and a market which will ultimately be as big, easily as big as the European market and the U.S. market combined.
So we all have to get used to the fact that the future of the global automobile business having the center of gravity is no longer going to be Europe or the United States; it's going to be China. And I think that to a certain extent China is helping drive our designs today in that the Buick Lacrosse, which is off to a very, very strong start both in the U.S. and in China, was kind of jointly designed to meet the needs of the consumer groups in both markets.
AMOS: I want to ask about your current CEO, Ed Whitaker. He's talked about an IPO, a public stock offering, by the end of the year. Why would an investor want to buy GM stock in nine months? The company's still struggling. Two CEOs have been fired in the last eight months. Is it time for an IPO?
AMOS: Well, we'll see. I mean, what we have to demonstrate is the ability to make money or at least show the promise of making money. And we have to demonstrate a positive cash flow and we have to demonstrate that our four brands are capable of fully meeting our market share objectives.
But I'll tell you, so far I think there's a great deal of investor confidence. And if and when we do the IPO, which, by the way, will not be before we have an impeccable story to tell, but when we have a great story to tell and we're ready with the IPO, I don't think there's going to be a shortage of investors.
AMOS: Thank you very much.
Mr. LUTZ: Thank you.
AMOS: Bob Lutz is vice chairman of General Motors.
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