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Straight Shooting

Bob Lutz, president of Chrysler, tells it like it is...all the time.
Paul A. Eisenstein
From the Print Edition:
Arnold Schwarzenegger, Summer 96

(continued from page 1)

Bob Lutz is a self-described "moderate" smoker, though one seldom sees him without a cigar in hand. Even in Chrysler's now smoke-free offices, he keeps a velvet carrying case close by and will occasionally roll a cigar, unlit, between his fingers. A tobacco traditionalist, he favors fine Havanas, a preference frustrated by the long-standing embargo on Cuba. "Just preface it by saying I spend a lot of time out of the country," he says, noting that while abroad, he's likely to seek out a Cohiba--"as good as it gets now out of Cuba." Flor de Cano is another favorite, though the brand has become impossible to find, even in his native Switzerland. The premium Cubans, he grumps, have been deteriorating, though "what we used to consider the secondary brands, like Quintero, haven't deteriorated as much, so they're often as good as the big brands." Closer to home, Lutz will frequently be found puffing on a La Gloria Cubana, handmade in Miami, that's "as close as anything I remember to a Cuban from the old days: that wonderful, rich, satisfying flavor with just a hint of honey and beeswax just before the cigar is lit."

Lutz's routine calls for a Churchill in the morning, another by noon and a robusto or a corona in the evening, "because they're aromatic, draw well and last a long time." On the weekend, Lutz prefers a lighter smoke, like a panatela.

He keeps plenty of cigars on hand in a pine-lined walk-in humidor, custom-built into the basement of his oversized Swiss chalet-styled home. Hidden on the back of a 147-acre gated estate on the wooded south side of Ann Arbor, Michigan, the chalet is home to Lutz, his third wife, Denise, and an assortment of cats and dogs that wander in and out as he relaxes on a blustery fall weekend. The chalet is cluttered with memorabilia and toys of a boy who has never fully grown up. A "really valuable item," he proclaims proudly, is his rubber model '42 Buick. But the real toys are housed outside in the 14-bay garage.

Technically, Lutz is not what's known in industry parlance as a "car guy." He is, by training and a procession of job titles, a salesman. But résumés lie. Ask Lutz about his '53 Cunningham C3 Coupe, his '92 Viper, the '34 Riley, the '41 Chrysler or any of his BMW motorcycles, and he'll rattle off all the vital statistics. He's got an engineer's understanding of aerodynamics, braking systems and suspension dynamics. If it's necessary, he'll crawl under the hood to rewire a misfiring ignition system.

The complete car executive has been in high demand for almost 40 years. Lutz began his automotive career in Europe, with General Motors. He lasted eight years, but despite a series of promotions, he became increasingly frustrated with GM because it was "getting more and more arrogant and hidebound." He barely hesitated when offered a job with BMW--at eight times the pay--where he served three years as executive vice president of sales. Eberhard von Kunheim, former chairman of BMW AG, recalls Lutz's uncanny sense for a great product. "He could go into a styling studio and sense when you needed to change a line by a half millimeter here and a millimeter there. He was always right."

In 1974, Lutz linked up with Ford Motor Co., rising to the rank of chairman of Ford of Europe in 1979 and gaining a seat on the board of directors. But in an unexpected setback, Lutz was later summoned home and put in charge of truck operations. It was, for all intents and purposes, a demotion, and in June 1986, a frustrated Lutz became the newest member of the "Gang of Ford," a procession of top executives who bolted for Chrysler during the 1970s and '80s. Two years later, Lutz was named Chrysler president, and as a series of rivals, including current United Airlines chief Gerry Greenwald, moved on, Lutz seemed certain to succeed Iacocca.

But when would Iacocca leave? To waggish insiders, the aging executive's name was really an acronym for "I Am Chairman of Chrysler Corp. Always," something the board of directors seemed ready to etch in stone when it waived Chrysler's mandatory 65-and-out retirement policy. But as Iacocca approached 67, the mood soured, and for good reason. The comeback company was in crisis again, with losses rapidly rising. Worse, the ill will between Iacocca and Lutz was turning into a feud. On the surface, the two seemed very much alike: bold, brash, opinionated, with a mutual love for a good cigar. But deep within, Iacocca was an insecure man from humble roots, resentful of Lutz's affluent upbringing, according to Doron Levin, author of the recently published Behind the Wheel at Chrysler: The Iacocca Legacy. It didn't help when Lutz deep-sixed the Fiat deal or when he described the ailing Chrysler to reporters--in typically blunt manner--as "a bride...lying on her deathbed."

The board wouldn't let Iacocca fire Lutz, but when it did accede to Eaton, Iacocca's hand-picked successor, the rumor mills quickly started churning. Surprisingly, the two Bobs proved completely compatible. In the months that followed, Lutz admitted to friends that he was happier as president than he would have been in the more visible chairman's post. He didn't have to worry about nervous analysts and investors. He could focus on products and people.

This kinder, gentler Lutz took many by surprise. But it really shouldn't have. Lutz is someone who, in his own words, likes to "challenge the established order of things," even if it's his own firm convictions. He's a hunter who has come to support gun control. And a loner who has learned to play on the team.

"Up there in the cockpit, you have to take charge. You can't wait for a meeting. You do it yourself," says a ranking executive and longtime associate at Chrysler. That's exactly the way the old Chrysler operated. As Levin noted in his book, the number three automaker had always been the "ultimate example of top-down management." But by the late 1980s, it was obvious that thatsystem didn't work anymore.

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