Peter Fairley

A View from Peter Fairley

Another Modest Sign of Modernization at GM

GM’s retiring product chief symbolized the auto industry’s environmental defiance.

  • February 16, 2009

Many in the green-car movement are cheering the announcement that Bob Lutz, GM’s vice chairman, will retire at the end of 2009. Environmental Defense Fund automotive guru John DeCicco celebrated the news on last weekend, calling Lutz part of a “cohort of corporate leaders who rose to the top eerily disconnected from the parallel rise of environmental values in American culture.”

GM’s outgoing product chief, Bob Lutz. Source: GM.

However, a speech given last week by Hyundai North America’s CEO–described as a “wake-up call” by the Detroit News–reinforces the impression that changing the industry’s environmental perspective will require a much broader shift in personnel.

Lutz earned the ire of the environmentally inclined for two reasons. As product-development chief, he contributed to GM’s reliance on ever larger and less fuel-efficient trucks. And he made headlines with his contempt for the theory of climate change. Dallas-based D magazine quoted a private conversation with journalists just one year ago in which Lutz called global warming a “total crock of ****.”

Lutz added, according to D, that “my opinion doesn’t matter.” But how could that be, with GM gearing up to woo environmentally minded consumers with advanced vehicles such as the plug-in hybrid Chevy Volt? Such comments reverberate louder still within the industry itself, signaling to junior engineers that an environment-be-damned ethic endures in Detroit’s boardrooms.

Hyundai’s acting CEO, John Krafcik, provided a measure of the pervasiveness of Lutzian environmental skepticism in his keynote speech last week at the 2009 Chicago Auto Show. Krafcik called for the auto industry to embrace improved fuel economy in spite of misgivings about the reality of global warming:

There’s really no point in arguing about the veracity of climate change when you stop to consider the finite supply of oil, and the turmoil that our present consumption habit is fueling in the Middle East. It’s abundantly clear that improved fuel economy makes sense for our industry and for our country.

Krafcik said that it was “in this regard” that Hyundai pledged to achieve a fleet average of 35 miles per gallon by 2015–five years faster than the pace of improvements likely to be mandated by the federal Corporate Average Fuel Economy (CAFE) standard.

The speech may not be a rousing call to save the planet, but at least Hyundai’s leaders are seeking to inspire action. Along with Honda’s and Chrysler’s proactive preparations to meet the tougher California standards (now under consideration by Obama’s EPA), Hyundai’s goal suggests that a more progressive cohort of automotive leaders is possible.

Tom Stephens, GM’s power-train chief and chair of its Energy and Environment Strategy Board, takes over for Lutz in April as vice chairman for global product development.

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