The Detroit Three (embattled) are just the circumstance victims, Bob Lutz Vice Chairman at GM told on CNN to Larry King Friday night. He affirmed General Motors made significant upgrades in its products plus price structure on the final 5 years, plus the financial crisis` threatening now on derailing the positive momentum of the firm.
“What everybody has to understand is this is not a question of everybody in Detroit suddenly becoming stupid,” said Lutz. “This industry in Detroit basically does a terrific job.”
He had some kind words even for his competitors, Ford particularly. He affirmed CEO Alan Mulally “basically saved the Boeing commercial airline business,” and that he can do exactly the same for Ford.
Lutz said, in terms of General Motors specifically: “We match the Japanese on productivity. We match them on quality. We have highly fuel efficient vehicles … we have the most efficient trucks.” He repeated also assertion of GM that it has now the most autos delivering on market over 30 mpg.
“There is no other car company that has spend as much on environmentally friendly technology,” he continued.
“We’ve got lots of highly competivie vehicles. That’s not the problem,” Lutz said to the King.
He is saying that the real problem now is out of General Motors’ control. “What has happened is the revenue has collapsed,” he affirmed. “And there is no automotive company in the world that can deal with the situation where 50 percent of your incoming revenue goes away.”
He explained the auto business is “one where you have extremely high fixed costs and when the revenue flow stops, boy you run out of cash in a big hurry.”
He noted that “even the Chinese OEMs are appealing to Beijing for aid.” What is more, “German companies are [also] looking at a 50 percent drop in revenue.”
“Everybody is going to be in trouble,” he affirmed.
“The American car companies are absolutely able to compete with anybody in the world. We just have to get past this tight spot,” he continued.
“This is a case where national governments are going to have to step up — and especially our government — to save the jobs in the auto industry in this moment of crisis.”
“I’m very optimistic. In February I will be 77 years old,” said Lutz. “I really don’t need to work. I enjoy working. I feel a sense of mission. And if I felt this was hopeless, believe me I would be walking. I’d be sitting in some vacation home some place.”
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