THE BOB LUTZ INTERVIEW

0:00 Unknown: Hello car folks, Jeff Sterns, here, I had an opportunity to interview Bob Lutz recently. He definitely needs no introduction as a car guys car guy. However, the interview does give some insights into the vehicle business, as well as into Bob's personal life. Enjoy. Jeff Sterns connected through cars, if they're big wigs, we'll have him on the show. And yes, we'll talk about cars and everything else. Here he is now, Jeff Sterns, Bob a, first of all, let me just get my jitters out of the way.

0:43 Oh, come on. We're not that scary. Listen, I put on LinkedIn that I'm going to have an opportunity to meet Bob Lutz. If you have any questions that you'd like me to ask, please post them. And a number of people came to me and said like, Is this a joke? Do you mean it? He's my biggest hero. I was watching a video last night about Mick Jagger doing what he's doing in a concert just in the last few days and people talking about him. And that's how I think about you. But I'm going to ask you if you remember me. Um, to be honest, no, you are an honorary Judge 99 2000 2001 at Pebble Beach. Concours d'Elegance. Yeah, that's correct. I was a Bentley dealer. I was there with Bentley, hospitality.

1:36 And I said to my dad, and we weren't carrying around, you know, our phones, our cameras and our phones. I said, Dad, would you please take a picture was 20th person in line with 20 More behind me to try to get some of those from you? I don't remember that. I was gonna say, Don't you remember that moment? Wonderful to meet you. Of course, we are introduced through our mutual friend, Warren Brown. I have something special I want to share with you. And I have a mystery guest that I want to bring on. And hopefully he'll come on here if the timings right. Oh, I don't know if you recognize this guy. Well, why? Hell yeah. I had the same gray hair in Russia. So I ought to be recognizable. Yeah, well, we both have executive hair.

2:27 All right. My portion of this is an introduction. When when I knew that Jeff was going to interview you and you graciously accepted, I reached out to our mutual friend, Vladimir Shcherbakov. What former former Premier of the USSR, though, and he'll be happy to tell you about that. And I asked him if he would give some kind words to you. And he was he was over the moon in doing that. I think because of the relationship you established with him in Moscow and Kaliningrad both as car guys and as leaders, and I think that there was a connection there. He was so honored to do it.

3:17 That he did it in Russian as kind of like a formal, a formal approach, right? He he wanted to say the right thing. So he had his interpreter, which you will hear voiceover interpreting that for him. You can see how he goes on about Bob Lutz and, and I think that you'll get a big kick out of it. Especially if you're smoking a cigar and remembering all the vodka and cigars that we did when we were okay, so before we get to it, I have a Bob Lutz war story that I have to tell. Okay. He he was invited to a cocktail party when we were in Kaliningrad for the launch of the Hummer.

4:03 And there was about 50 guests there some GM folk that had come over with Bob and and the off the tour folks and he probably had a whole bunch of government dignitaries come because Bob was there. And you know, about halfway through halfway through the cocktail party, I can see that Bob's not you know, he's he was gracious he he did his time. So I said, Okay, I need to I need to give this an energy boost. So I walked over to him and said, Hey, Bob, how would you like to see the guy that engineered and helped design the MiG? And his eyes got as big as saucers. Alexander Sorokin, if you remember his name was the guy that did that and you spent you spent the rest of the evening with him. So I think that it ended up being a good cocktail party for you. Okay, now, we're some of the field force guys in In his unit, the salespeople in the dealer but they were all former MIG 29 platelets from the from the Soviet Air Force. So I had great conversations with fellow military pilots. I could see that by the end of the evening before we got to the vodka and cigars, Sherman coughs house that you were having a great time. And Warren I heard everyone was right on time the next day after that party in the

5:34 lobby. Well, I can tell you this another another quick Lutz thing as you're loading it. We drank vodka and smoke cigars till very late in the morning. But being the host I had to be up first. So I got up and Bob's already up dressed button down collar tie. And he says to me, this is 630 in the morning after drinking vodka and smoking cigars all night. He says to me first Causton and the other guys I says Potter's still sleeping He says we'll get them we got to get this show on the road this beautiful with that roll it says hello everybody my name is bloody Marcia Paco I'm 75 years old 38 years I've been in the auto manufacturing industry of the Soviet Union and Russia caribou bureaus and district Limbrick so that so that when you stop I used to be first deputy prime Minister of the USSR So sir, also adjustment business and after the collapse of the USSR I went to private business even lower to deal with when you hear your voice when you wishes to deal with with leachables law

7:05 calm is Werbung lotsa with industry Exactly. At that period, I was fortunate enough to get personally acquainted with Bob Lutz, the true legend of the global auto industry by Shropshire drew core and grown. Our common friend, Warren Brown asked me to say a few words of introduction, Orchard Earth was and I'm very glad to have this opportunity. Just because I would like to say that Bob Lutz is a legendary engineer.

7:45 Legendary manager, organised legendary organizer of production and business. Coaching Hiroshi group decides he's a very good friend in Australia, music and real man on Eugene's americanas. He's the only American Khufu. Am I G 29. fighter jet legally. The code master Yes, she was teachers care America. He's a real classic American. Smart, professional. Organized, courageous soccer open just leaves Loba honest in words and actions. I believe this piece will return to normal human relations or certainly useless Americans significance especially if more people like Bob Lutz on the American side is the royal good house and long life to you Bob.

8:49 Do you have an open invitation to visit after Todd was was list and not rookie you will have an opportunity to fly other types of yet Russian modern fighters fighting jets. I promise you like a solo long. Bob, I talked to him afterwards. He was he was tickled pink to do this. Um, I think that he he does six minutes worth so I'll send Amy total six minutes.

9:32 I don't have his email address but I'm sure you do. So please be sure to thank him and tell him I appreciate it very much. And you know, I keep very pleasant memories of knowing him and wish him a long and happy life. I will I will guarantee I will I will pass that along both in email and by calling him So with that introduction which is a little long winded. I wish you both a great interview. Bob. It was nice to see you with that cigar. I'm jealous. I didn't have mine. Okay, great interview. Thanks. Thanks for letting me join.

10:12 Thanks very much. Good to see you looking well, too. How did that make you feel? I was watching your fat. How did it make you feel for Warren to do that behind your back? And glad to say what he said? Well, obviously, I'm greatly honored. And it's, it's nice that you complete a 42 year career in the automobile business and in the military. And basically, you'll look back. And regardless of what company I worked for, I left with I can say no enemies, I left with basically nothing but friends. So I feel extraordinarily blessed that I met so many nice, interesting, valuable people in my career. And of course, Vlad and Warren are two that stand out particularly well, I tell ya, I just when I was getting emotional over it, because it was so heartfelt, and what a compliment. And you know, I know we want to remain humble, and we want to talk about honor. But man Oh, man, I mean, just the, to me, I was just feeling emotion.

11:29 We, you know, we leave our careers, or as we're 10 years out of whatever our last career, one of my old bosses, who was a lieutenant colonel, who was general manager in our dealership, said, you know, in the car business, you It's like pulling your finger out of a glass of water, the whole you leave, you know, waters, what do you usually end up leaving? When, when you're gone? As far as people remembering you are mattering? And you really honest to god, I mean, you really do matter when I put that comment up on LinkedIn that I was gonna meet with you. So many people commented, and I've got it aggregated on certain things to ask you, but I got so many private messages and phone calls, that you may not even, you may not even realize it. And you're originally Swiss born, went through Marines. And then what GM Europe and BMW, right, right. That's the sequence. Well, I went out with my 21 year old son who's working with me in my business today, to pick something up for the office. And I told him, I was gonna meet with you, and he couldn't believe it, then he's a total car guy. And he said, How does a guy go from military to getting into, you know, he was so intrigued how you escalated. And I know that we only have so much time. But for a young guy like him, do you? I mean, what can you attribute it to? Was it?

12:54 Well, I attribute it to a couple of things. First of all, I was privileged to be born with good genes, you know, with an intelligent, healthy father. And an intelligent dynamic mother was also very attractive, and they were both slim, and they both live to a ripe old age. So I'm blessed with good genes. So as they say, you should pick your parents with care. Because it's the number one factor in your makeup, then I was a sufferer of what today would be called ADD. In that in school, I only paid attention to subjects that I liked, and completely zoned out in subjects that I was less good at, like math, and history, which didn't interest didn't interest me at all. So there was a really a question in my father's mind, whether I'd ever be successful in life, and partly, his suggestion, but also my orientation. I joined the Marine Corps, and what I would credit, and I do in my books, whatever success I've had in private life, I do credit the Marine Corps, because I think the Marine Corps teaches you discipline, commitment, caring for your troops, focus on the

14:29 mission. And it is, and it's, I think, the world's best leadership school. Now, I was always a car guy, I didn't leave the Marine Corps and decided, What business am I gonna get into? I always knew even when I was a kid, and I was given these aptitude tests. They say, Well, what do you want to be when you grow up and say, well, three things I'd like to be when I grow up. One would be a military fighter pilot. The second would be a He's driver. And the third would, is that I'd like to be an automobile executive. And then they say, well, those sound like great goals. But, you know, you're gonna have to pick up your grades if you want to attain any of that.

15:16 And in fact, I attained all three, I think I was a decent Marine, a jet attack fighter fighter and attack aviator, although never tested in combat. But I think with my training, I would have been okay, I was a moderately successful race driver, and quite fast for somebody that doesn't do it all the time. I just did occasionally when I had access to a car, or something like that. And then the third one, which where I really progressed beyond my own expectations was being an executive in the car business. And I thrived on that. And I found that a military discipline, the focus on leadership, taking care of the troops, delegating authority and responsibility. But driving the team forward, in other words, deciding on the what, and delegating much of the how, and then following up, make sure that people don't slack off.

16:30 Worked in the Marine Corps, and it worked in private life. Well, when when my son and I were walking around, he was just so curious, like me, and to go that far. And then of course, you're really a product guy. And it isn't like you went to art college, right? Do you remember John Dinkle. So John Dinkle was a editor of road and track and Car and Driver. When I put on the LinkedIn that I was going to meet you, he said, Well, ask Bob Lutz if he's still a serial killer. And he's always Mr. Pun, when he posted this, and he actually hung on to it. And I'm sure you remember this. Yeah, we that was a press giveaway for the Dodge Durango introduction. And boy, did we did we ever hear from did we ever hear from the producer?

17:26 Oh, yeah, they were sort of trademark infringement and everything. We said, Come on, relax. We did a couple of 100 boxes. We gave them away. It's nothing serious. But the Chrysler legal department was summoned, and had to go into hand to hand combat with the General Mills, people who felt with something sacred had been violated. You've diminished the brand. Now, another friend of mine, who was a Ford exec, who's now with an automotive space analytics company said that he read an automotive news. He said, Oh my God, if you get asked Bob about this, he says that a viper and he's going by memory, he could not find it at a viper introduction. You'd mentioned about the press the winner gets a ride with in a viper. And the loser gets a ride with you in a helicopter. And apparently you had just wrecked one.

18:27 Do you remember that? Yeah. So I want to talk about your impressions because your course your the product is our impressions about some things I want to look into the future. You're definitely a recognized I got notes are a recognized expert in all areas of product development. But according to Warren, and he said he learned more about interior spending an interior at an auto show with you for half hour, 45 minutes than he knew in his career today with you talking about it. But what do you think, right now, about like, are the two best gotta have vehicles? What are what you know, what cars or trucks excite you today, if any? Well, if any, is a good, a good attendance to your question because especially in a compact sport utilities, we're seeing a great deal of sameness among brands. And if you're not close enough to read the batch, it's tough to tell one from the other. It's also become manifestly impossible to buy a bad car. I mean, everybody has high levels of safety, great noise, vibration, and harshness, decent styling the some of the famous Japanese brands, perhaps, at this point on styling a little weaker than Americans and some of the Europeans are a little weak right now. But

19:57 basically everybody produces no Nice vehicles with good interiors, everybody produces, everybody offers Ralph the same safety features. And it's no accident because all of these features like lane departure warning and intelligent mirrors and etcetera, etcetera are all brought to you by two or three global suppliers. And everybody gets the same stuff. So there's a there's a good reason why cars have achieved a degree of sameness. But if you asked me for some products that really stand out, after doing a lot of checking, I just bought a Cadillac lyric sport. And he talked about interiors, the interior is spectacular. And it's got a 325 mile range, which still does not make it suitable for long road trips. And I'm not about to stand in line for four or five hours waiting my turn at a charging station, which is I think the thing that makes Evie still kind of a local proposition when we get when we get 600 mile batteries or 700 mile batteries, you know that issue is gonna go away, but at present, it's still there. But the Lyric is an absolutely

21:28 outstanding vehicle. And in the first quarter, it outsold all of the German luxury EVs let's BMW, Audi, Mercedes Benz and Volkswagen combined. So the public is the public is accepting it in a big way. That's an outstanding vehicle. Second, there's no no doubt, Bob, from a product standpoint, the Lyric is outstanding. No question. But I'm a little surprised to see you with electric with some of your comments in the past Well, electric are at the beginning of the revolution, you know, we've got 120 years of internal combustion, it's near perfect.

22:15 The fuel is if gasoline hadn't been invented, we should invent it now. Because it's it has such high energy density. But there's a lot of advantages to EVs, which are not yet fully realized, because we have to wait for battery technology, which it will, which it will, I mean, battery breakthroughs are on the horizon. And in two or three years, we'll have at fact, lucid, has a 600 mile battery today. Nobody knows about it, but it that's, that's potentially a great sedan, another one of my favorites, which is unique both in terms of what it represents and how it sells and what it does is the Chevrolet Corvette with a long history and I have three I have a 2010, ZR one, a 2015 06 and 2020 see a mid engine. And these cars are fabulous. And you know that the German companies and the Italians they keep buying them and tearing them down because they can't figure out how General Motors can make a vehicle like that and sell it at the price that we offer it and still make money. It's still other than sport utilities and pickup trucks. When I left GM,

23:47 it was still on a per unit basis, one of the most profitable vehicles in the GM portfolio and I have no doubt that it still is the third one that I really like again because of its uniqueness, comfort, safety, spaciousness, all terrain capability and so forth, is the GMC Yukon, which of course, is the same as the Chevy Tahoe and the mechanically near identical to the Tahoe, and the Cadillac Escalade, and I have a a Yukon XL, which is the long wheelbase version, which is equipped with supercruise. So when I'm on the freeway, I punch in supercruise. I take my hands off the wheel and my feet off the pedals. I lean back and relax and prepare a cigar and smoke it and the car does all the driving from Ann Arbor to Chicago, which is pretty amazing because other companies offer similar systems but they're not as well developed. And whenever there's a comparison test of automated driving systems, the GM supercruise system always comes out on top. And how about your trust factor? I mean, you're telling me you're leaning back having a cigar. So I'm assuming you have some trust. But have you experienced any close call where like you think I better paid while I'm relaxing, you better pay attention to the autonomous drive. The unique thing about the GM system is I don't know

25:20 how many around the road to today, but probably since it's been offered for the last five years, probably close to 100,000 GM supercruise vehicles on the road today. And to my knowledge. Ford had offers a similar system, I think they've had one or two instances of people reporting it didn't prevent an accident or it caused an accident or something. There is not I don't think there has ever been a single reported incident on the GM supercruise system. It is 100%. bulletproof. That's a big statement. And you're going back to Corvette, you're talking about Corvette, and this is just my memory. So if I'm off, we'll edit it out. But you talked about, I believe, Corvette tising or, you know, putting a Corvette in every line of General Motors. Am I right or wrong about? No, that's that's wrong. But the but the thought the thought is correct. It just like Ford decided Mustang was a brand that could be expanded as a sub brand. So you've got the Mustang Mach E, which although unprofitable for Ford, but it's a pretty big hit in the Eevee.

26:43 Community sells well. I think the Corvette Corvette could be made into a sub brand and position similar to Porsche. And I don't think, you know, a Panamera for door would be a particularly good idea. But certainly a Cayenne type sport utility. Wood could be made very Corvette like, and could be a brilliant seller. Interesting. And does that bother you at all? And I'm not trying to be a smart aleck. But you know, I was running a Cadillac store. When you talked about Cadillac, we'll never have an SUV. Yeah.

27:29 In the old days, when Cadillac announced that they were going to do the Escalade, I thought that was in the, you know, this is like 25 years ago, I thought it was a huge mistake, gonna damage the brand, at cetera, et cetera. And now it's the centerpiece of the brand. And I thought the same thing about to a lesser degree, when Porsche did the Cayenne, and that today is the core of that Brett well liked, say the 911 is the symbolic center, the brand like Wrangler is the symbolic center of the Jeep brand. But the Cayenne has been a huge success.

28:12 And the Lamborghini Urus is another huge success. And Ferrari is coming out with a sport utility. And that will be a huge success, because let's face it, many people want the brand. They want the performance, but they want the convenience of a sport utility. They need some kind of utility, you say you, you don't have like an emotional issue. And you mentioned Corvette SUV. You're okay. If the market wants it. I'm okay. As long as it's done, right? And isn't a variant off of some other General Motors SUV? It would have to be uniquely Corvette in its character, its appearance, and its technology, and it would have to offer absolutely earth shattering performance. Okay, got it. So going back, we're talking about the gotta have, and Warren helped me with some of these questions. So Warren was extremely interested in us having a good conversation here.

29:17 So I want you to know behind your back, there's a guy that cares a lot about you and your reputation. What about what you think is going wrong with trends today? Well, I don't think it's necessarily a trend going in the wrong direction. But I do think car companies should try harder to produce unique products that don't look like everybody else's. I think that's a mistake, because the minute your product becomes interchangeable with everybody else's product. Now you're competing on brand brand value, which which is legitimate. You learn that over time.

30:00 or you're competing on price becomes a disaster. Right? That's exactly right. So I think you said it because you said of gasoline came out today, with the energy units, it would be the way to go. And I and I know you got the lyric. But in general, are you gas hybrid or electric? I'm for whatever is a great vehicle. And I think, as I said, to me, electric vehicles have become politicized, you know, the, the climate change fanatics, and the Save the earthers, and the left wing of the Democratic Party, etc, etc, are all in on electrics. And conservatives have taken a hardcore position.

30:46 Like, it's almost become like the Second Amendment, you know, nobody's going to take my gas powered car away from me. And that's ridiculous. It's not a political issue. The mistake the government, governments around the world made, is trying to force the technology faster than the consumer was willing to adopt it at faster than the technology made the stuff really good. So we're not gonna have like, an overnight switch into electrics, which every the media three years ago thought was gonna happen, you know, everybody's next vehicle was going to be electric. Well, even Mercedes said, after a date, I think 24 Or five that we are going to have no more gas. But well, you know, GM has said the same thing, but as kind of backpedaled on it a little bit, which is, which is smart.

31:44 Because you've finally you cannot violate the market, the market is the market, and electric vehicle will gradually increase their percentages. And in another 10 years time, we may see 25% of the market electric in 30 years time, it may be 50%. But it's gonna be a gradual transition. Now. Will it happened? I believe absolutely, because in so many ways, other than the range issue. But in so many ways, electric vehicles are simply vastly superior to gasoline, they're slick, they're silent, they have a lot fewer moving parts. Things like brakes don't deteriorate, because the braking is mostly regenerative forth.

32:42 And wait right now, from a co2 standpoint, this is this is the ridiculous thing. They do not. I keep trying to explain this to the climate fanatics, they don't save any co2, because 85% of America's electric power is generated by fossil fuel. So, whether the co2 is created at the energy production plant, or in the in the, in the, in the gasoline engine, at the tailpipe it, the planet doesn't care, co2 is the is co2. Now, at some point, we'll have clean nuclear energy. And then with if we don't have to burn fossil fuel to charge our electric vehicles, then I will buy the argument that they produce less co2. And what about the diesel equipment mining the materials needed for the batteries?

33:52 The diesel equipment used for mining the metals. I mean, it depends how far up the train you go. But even if you go no further than power generation, it's then you got transmission losses, because the power has to be set out. So there's a certain amount of loss, then there's a certain amount of losses when it goes from your home power outlet into the electric vehicle. So at the end of the day, you know, I've never seen a wheeled well to wheels comparison, but the like fuel cells, fuel cells are touted to be absolutely zero emissions. All it comes out of the tailpipe is water vapor, et cetera, et cetera. But they keep forgetting that hydrogen does not exist. In a raw state. It's got to be created out of something. So separating the hydrogen from whatever it's attached to. Rick requires Guess what? Energy and taking one form and creating another chemical form requires energy. And that basically requires creation of co2.

35:14 Secondly, fuel cell vehicles need the hydrogen compressed to 10,000 psi, what where does the power come from, to compress all that hydrogen. So, General Motors, we actually did a well to wheels analysis of all of the fossil fuels and energy that are required to go into a fuel cell, and then did the miles per gallon equivalent, and it comes for fuel cells. Best case, it comes out to about 65 miles per gallon. Well, you know, that's, that's a long way from zero. And an even so I think the 65 miles per gallon was calculated by the rabid fuel cell fanatics within General Motors, who, by the way, led us down a garden path of millions of fuel cell GM vehicles on the road by 2010.

36:18 Which you know, manifestly never happened, for good reasons. And then fuel cells require all kinds of rare minerals like palladium and platinum, and so forth. I mean, fuel cells, fuel cells that really down on battery electric vehicles I'm high on. But we've got to get the battery energy density up to where we have reliable, affordable, at least 600 mile batteries. And charging stations have to be more plentiful, more reliable, and word and charging times. With an internal combustion engine, you can put 350 miles into the tank and five minutes. Even with Eevee fast charging, you can do maybe 80 miles in 20 minutes. That's with today's fast chargers. And talking to people who own reviens and Tesla's when they get up to a charging station, they're usually fourth or fifth in line. And they have to wait for everybody else to get their 80 miles. And I'm not going to sit there at some charging station for hours and hours, waiting until it's my turn. And then in my 20 minutes, I get my 80 miles, that that just makes no sense for most people, and they're quite right. I think

37:49 some people though, will get rich filming the arguments. Who's next in line when there's five and well, it's been done, it's been done. And my friends who have waited in charge in line say that the atmosphere gets pretty thoroughly. And we're watching everybody's watching the other guy's car and saying, you got your 80 Miles get out of here. Here we have reminds me of watching at a boat ramp with the husbands and wives yelling at each other, right? So freaking gotta have it or forget it. What about the Bronco from a design smash hit smash hit an extremely smart piece of product planning on the on the part of Ford and it is it's the usual Ford Motor Company method of doing the design to where it mimics something much more prestigious. You know, they did that with Lincoln, they adopted what can only be described as a Bentley front end.

38:55 And when when I worked for Ford, when we did a new sedan or something there was always something more prestigious in this design studio and the stylists were told make it look like that not exactly like that, but make it work and so forth at the Bronco is clearly I admit there's a lot of heritage of the old little Bronco, the Bronco, the original tiny little Bronco it does look a lot like that. But mainly it looks like a Range Rover Defender which you know sells for close to quite close to twice the price and a lot of times when I see a Bronco for door with the right colors and the right trims. I have to think oh I haven't seen a defender in a little while and then I look at it's a bronco. And but they they really spent wisely on that they did short wheelbase, long wheelbase hard cop saw Stop, semi soft up removable doors, non removable doors, wide track narrow track, big wheels, narrow wheels, I mean, they created a whole portfolio of vehicles to where you can customize that thing to exactly what you want and it's seriously hurting Jeep of a Jeep had that Jeep had that market all to

40:25 themselves. And along comes the Bronco and it has done serious damage. So that's a brilliant example of doing something new and different and doing a brilliant job at creating it. So as a former GM guy and GM loyalist, I admit, but it's a shame that GM didn't we were on the way to doing it with Hummer because we were going to create the so called H three, which was going to be about the size of the Bronco, many of the characteristics of the Bronco but it was going to be a Hummer.

41:08 So we were on our way, but unfortunately, Chapter eliminator Vien and we had to drop the brand. What about model Y Tesla? Tesla's? Well, I think Tesla is a great car. I sometimes disagree with Elon Musk on his business philosophy. And I, lately they've been see sawing back and forth. Will there be a model two? No, there won't be a model two are going to Robo taxis. Oh, no, wait a minute, we're going to do us a series of affordable cars. And I think what what's happened is that everybody has discovered that Tesla is not a technology company. And the stock is not a technology stock. Tesla is an automobile company. And they have to refresh their vehicles, just like everybody else. And the Model S which is, I think, a terrific car, and still one of the best looking sedans on the road. What about the why? The why I didn't like it at first, but it's it was I think, last year or in 2022, it was the world's best selling vehicle. Well, you mentioned you know, Tesla, not a technology stock, but man Oh, man. How about the market cap?

42:30 Well, you know, it's ridiculous. There's no justification doesn't make sense at all. How about Toyota crown? Well, I, I kind of like some of their newer stuff. They've finally discovered or rediscovered the fact that design matters. And the new Prius for instance, is finally finally apparently, from all reports while it might go up Motor Trend Car of the Year, which means something, so it must drive. Well, I haven't driven one, but it's good looking. It's not nerdy. No, it's finally not a dork mobiel.

43:13 Folks, if you are a prior body Prius driver, I'm sorry, Bob blood said it was a dark mobiel I'm not the only one that term comes from Elon Musk. That's why he decided to do the Roadster initially because he was intrigued with the idea of electric drive. And he saw everybody buying these Toyota Priuses or I don't know whether the plural is priests Priuses or pre AI. If you're wanting student is pre AI buddies. Look at those dork mobiles. We're gonna get we're gonna do something electric that attracts automotive fans. How about cybertruck?

43:55 Well, I think that was a colossal mistake. It was a good example of doing something that looks different. But they could have made it look that way. Without going to all of the pain of doing flat panel, stainless steel, bulletproof and all of that stuff they just could have. And the reason they have so much trouble fabricating it is because everybody in the car industry knows. And I'm sure somebody, many people told Elon and he was not in a listening mode, which is fairly typical of him and usually pays off for him but sometimes it doesn't. I'm sure everybody told him to properly build the body, automotive body and get decent stampings that can be handled and welded properly. You must introduce a little bit of crown to the surfaces they could have done some crown in those surfaces a little bit in the roof a little bit in the sides, a little bit in the hood, I had the crown could have been so slight, that it would be hard for people to notice. But then they wouldn't have all these horrible issues that they've got in building the thing. And I'm sure it's a huge money loser. It's way heavier than it has to be.

45:24 I know they still have a lot of advance orders may be ultimately, if they can get the manufacturing issues solved, which is a big F, it might be a hit. But it will never displace the products of RAM, GMC, Chevrolet and Ford. It'll be a different buyer. It'll be a Tesla fan. Who wants a truck? Not a truck buyer who wants a Tesla? Maybe Elon, you know, when he doesn't always listen. Maybe he was going back to some some old line about I don't know, I heard something about often wrong. never in doubt somebody once said, Well, yeah, well, that. I mean, if you're going to be a leader, having a degree of self confidence, and being relatively firm in your opinions, is a good thing. If you don't have a really firm belief in what you're doing is right. You can't convince others to follow you. But I think most people, myself included, there's always this tiny little voice in the back of your back of your head. What if I'm wrong? What if I'm wrong? What if I'm wrong? And that little voice gets you to listen to people? And thank God, you know, many times in my career, I've absolutely wanted something. And my guy said, Bob, look, don't do this. It's not

46:58 gonna work at or we can't build it. And I push back a lot and say, Yeah, well, you guys are just negative, etc, etc. And they'd come back and say, Bob, listen, we gotta tell you. One more, one more presentation, we'll take it down to the shops. And we'll show you the reasons why we can't do and then finally and say, Okay, I got it. And, by the way, if you run into that much hostility, it probably isn't going to work. Because the people at that point, if you do a forced job and say, I don't care what you guys say, I hereby ordain that you do it. They're gonna go into malicious obedience. And you'll never get a decent product.

47:50 Right? But you'd mentioned when you get hostility like that, but I think it's, you're really just talking about resistance. And you know, it's not necessarily hostile yet. But I'm always a big fan and student of leadership, not management, you know, leadership. And the story you just told was actually a little bit surprising to me. Because you got a big persona, he got a big personality, you got a big reputation. And what you just said, tells me that you created an environment that made it safe for people to give you some rules. That was that was another thing I learned in the Marine Corps. And it's in Marine Corps. leadership style principles in that is that you adapt your leadership style to the situation at hand. And when time permits, you listen to your subordinates. That means for a second lieutenant, he listens to the sergeants and corporals, who have probably been in the infantry a hell of a lot longer than a freshly minted second lieutenant. When you're a colonel, you listen to lieutenants, and Sergeant Majors. And if you go to a Marine Corps weapons demonstration, the presentations are not like in the movies where there's a two star general standing at the with the maps and with the pointer. In the Marine Corps. Its sergeants and Sergeants Major who gives the presentation so the Marine Corps strongly believes in listening

49:22 to the troops. The only time you adopt a more draconian and more absolutist leadership style is in an emergency situation where there is either no time for discussion, or the situation is so dire, that the troops are reluctant to take the measures that you're going to ask them to take. And then you have to say, look, we're in a tough situation. We can't argue this. We need everybody to cut their budgets by 20% I know it's awful. I know you're gonna have to get Get rid of people. I know we're gonna have to delay programs.

50:03 But that's the situation we're in. And I always tried to. I never said, What I always avoided, was once when they said, Well, why do we have to do this? I never said, because I say so. That's, that's the sign of a weak leader. A good leader is capable of explaining the necessity to the people that are being asked to accomplish the task. And I always used I always used to the extent possible. I always used humor. But one GM story when I got the GM, one of my in 2002 1001.

50:48 On my return at age 70, I was at a first meeting of all my direct reports, and it were about 20 people in the room. And I started, you know, just batter and telling them what I thought was wrong with GM products. And I saw everybody hunched over pieces of paper, scribbling furiously. So what are you? What are you What are you people doing? So well. You're a vice chairman, and you're addressing us, and you're giving us wisdom from your career. And we're taking notes. And I said, Guys, listen, you don't know me very well. But I tend to run off at the mouth. I'm what is technically known as given to verbosity. And I say a lot of things that don't make any sense. And what I do is I try to trigger responses in people. And I say a lot of controversial things, and I want to hear pushback. And you people should never be worried about pushing back. The only thing I just one rule.

52:06 Any one of you at any time, in any meeting, can say, Excuse me, sir, you're full of sh i t. I would just ask you to say and this got a big laugh, I'd say you have to preface it with the words. With all due respect, sir, you are. And everybody laughed. And you know, what, two or three weeks weeks later, we I think we were having an argument about fake wood versus real wood and cars. And can the cars can the consumer tell the difference? Because the cost difference is like 10 to one. And I was as fake wood today looks better than real wood in most applications. And that's when one guy finally said, Okay, I'm gonna test this.

53:00 This with all due respect, sir, you are And everybody looked horrified to see how I was going to respond. I said, Thank you, sir. For breaking the ice. I've been waiting patiently for somebody to do that. Now. Tell me why. And once we got, once everybody understood that nobody was going to be punished. We had meetings that sounded like verbal, free for alls, we Schouten. And, I mean, we insult each other. And I, I accepted as well as I got, but you know what, I never feared for my authority, because I knew at the end of the day, they knew I had the stripes. They knew who what, who was in charge. And they knew that if I put my foot down, I was gonna get my way. So I I never saw it as threatening my authority or threatening my position or hurting my ego. If people criticized my ideas or my my opinions. Well, in you were right. And it wasn't about getting your way it was about leading and you sometimes got lead. Well, was about getting getting to the right solution.

54:21 Right, right. Right. So what's the best vehicle you've ever owned? Well, that's a tough one. I have owned a lot of great ones. I would say you know, for everyday driving and putting it into the context of the day, which is 70s, early 70s. It was hard to beat three litre fuel injected BMW coupe.

55:06 That was that was, I mean, a beautiful car, well made reliable. With the fuel injected version, I think at 210 horsepower, which, back in those days was awesome. And the ride was good. It was the refinement was great. And that was back in the day when, even when, even after I left BMW, people would ask me, who do you think builds the best cars in the world today? My answer was invariably, BMW because when it came to engine refinement, engine, reliable reliability of the beautiful blend of performance and handling, roominess fit and finish Brand Character, and it was hard to beat BMW weight distribution.

56:04 Yeah, I mean, it was, I mean, they had in their period of rapid growth when they really built when they built the three series, The Five series and the seven series. They were a supremely outstanding automobile company. That's a good choice. And there's a lot of people that would like to have one of those from that era now. I mean, CSI coops, and even the CSL lightweight coops, which were had the naturally aspirated engine for racing homologation reasons. Even those are, you know, the value of those, I think, if you're looking at four or $500,000, yeah, they're precious. They're precious.

56:50 So, given the emphasis and everything looking like you think design is dead? No, because if you look at what Mike Simcoe has tried to do at GM, he's developing a new design language for Chevrolet. And if you look at the new Chevrolet blazer, electric, the electric blazer, yes, it's a midsize, mid to large ish size SUV, but it's totally radically different looking from everybody else's, and it looks great. The same thing is true for the Cadillac lyric, and then you go to the Cadillac sell Mystique, even more so.

57:46 And Buick is getting a new design language. So I think Mike Simcoe and the GM product development, people are keenly aware of the problem of sameness out there. And I honestly think it's a realization that a lot of the companies are coming to. And so I'm hoping we'll see more diversity, because it's, it's important, right now, he is not that will tell you, but styling is not dead. But when I look at some of the German brands, and I look at some of the Japanese brands, they may not styling may not be dead, but it appears to be in a coma.

58:42 It's the product stupid, well, and the product is really 90% of the product is how does it look in the in an era of increasing technological sameness, fuel economy, sameness, right and handling sameness, safety features, fineness, reliability, sameness. styling, makes the difference. Is that a is that a Duesenberg you've got over your shoulder or is it a Chrysler Imperial? That's a doozy and that is actually the old three Pebble Beach poster. Okay. All right. It's a certified duisenberg. It's a little fuzzy on my screen, but I was able to pick it out. Yep. Yep. Not bad. Do you see this plaster model or is it not showing up? It's not on the screen. I have a plaster show room model that was on my dad's shelf and his lot in Royal Oak, Michigan that I ended up with.

59:45 Oh, yeah. Okay. Yeah. I don't know the model. It could have been done by Kaiser Fraser Kaiser. Yeah, it's somewhat reminiscent of the Kaiser Manhattan that actually might be what it is now that you mentioned when I was a kid I thought my dad said Nash and I hadn't paid attention but this might be a Kaiser Manhattan. So you know Warren Brown talked about I don't know half hour 45 minutes and he said he got the biggest interior education of his life sitting with you in a car talking about the feel how the the windows the knob make you feel like the manufacturer spend some money.

1:00:27 But I want to ask you a two part question. What makes a good interior but I also want to throw in now that there's touchscreens, how do you think that impacts Well, a good interior is the second most important contact with the customer. The first is the exterior appearance. And then when the customer opens the door, the interior asked to keep the promise that the exterior mate and this is where GM was so weak in the 90s and when at when I joined them in that some of the exterior design wasn't that bad.

1:01:10 You know, the panels didn't fit very well and the paint was maybe a little dull, but the shapes were okay. But when you open the door, you saw acres of cheap, dark grey cloth, dark grey plastic instrument panels with ugly knobs that went clack, clack, clack when you move them, and it looks so downmarket I always said our interiors looked like they were made by Mattel only forgot the colors and and they were measuring the wrong face. They were looking at JD Power, complaints of functionality in the interior and they said there's nothing wrong with our interior. Look at our JD Power scores. Well, JD Power measures things gone wrong. It never looks at things gone, right? It doesn't look at the appeal. It doesn't. It doesn't measure whether people bought the car because of the interior or not. But a good interior has to have rich, rich looking materials, whether it's wood, or piano, black, or carbon fiber, etc, etc. And the materials have to look genuine. So try to substitute aluminum spray Kade spray campaign, instead of foiling real aluminum over him

1:02:41 doesn't work that immediately says bottom and then the textures have to look like they are soft, so that even if it's a hard plastic instrument panel upper, it's got to be grained and may be painted with a soft touch paint to where it looks soft and compliant. The worst possible thing is to look for everything to look like it's been armor alt. And then instruments have to be clear, legible look like they were they they have to if they're if they're conventional instruments, they have to look like they came off of a Swiss watch. So there are buttons you can touch with the customer. For instance, circular knobs. I like circular knobs that feel like you're adjusting the lens on an expensive camera.

1:03:46 If they go clack clack clack from position to position that is not going to function function of function wise, there's nothing wrong with that. But it sends the wrong signal to the customer. So the tactile feels got to be good. The materials have to be good. The gloss levels have to be very subdued, subdued. And then adding a little bling doesn't hurt. It's a few dollars on the interior but putting a bright ring around the cupholders says value. And if you look at a friend of mine collects 1960s American luxury cars. He's got 70 and you should see these things. Mercury grant mercury, Grand Marquis, Buick Doosan, a quarters Lincoln's etc. You'd look at the interiors of those things. Boy, did we ever lavish money and chrome and attention on those 1960s interiors. I mean and the door trim panels, the armrests, and little chrome surrounds around everything. And I mean, it was you open the door and wow, look at all this stuff.

1:05:14 And then somehow, in the 80s and 90s, we moved away from that. And we went to these cheap and cheerful, dark grey and black plastic interiors, which made no sense whatsoever. But the good news is, everybody's getting it. General Motors slipped up a couple of times after my departure, tried a couple of downmarket pickup interiors that created a lot of pushback. But the new GM interiors are great. Chrysler, or still Ennis interiors are wonderful. And in my judgment, the best premium interiors, possibly in the world right now are produced by Lincoln, both in the Navigator and in the aviator. It's a shame with the interiors on the Lincoln though with the sheet metal, you know, Ford throwing all the money and incentives to get rid of inventory. But they haven't updated sheet metal on Lincoln in a while. Yeah, well, that's you know, that's that's starting to show, although the big the, the aviator is fairly new. And the navigator is newer than that. And the navigator, I don't particularly like the outside shape. But the front end is nice. And the interiors are dynamite.

1:06:45 Interiors, I agree. Are you still flying? No. I packed it in about four years ago at age 88. Well, you know, I probably would have done it by 87. But you know, I just told myself, you know, what? My ability to fly the airplane, the military jet, or the helicopter had not diminished. But I told myself, what if I had to eject over northern Michigan with no cell phone coverage, and had to walk my way out for like 10 miles to the nearest road?

1:07:28 In the old days, arguably, I could have done it. But at age 88 I think I would have become wolf food in 10 Miles is St. Agnes. Got it. Okay. Do you think there's too much tooling or parts production in China? Well, yes, and no, I'm all for getting the best parts and components possible at the best possible prices. But I do share the concern that the US and Europe might be victims of being hollowed out by predatory Chinese pricing. And there's no question, you know, we used to associated Chinese stuff with cheap and cheerful. Well, it's not cheap and cheerful. They have brilliant engineers, they've got a great education system. The Chinese are a very intelligent, hardworking, quality focus people. So they produce that we shouldn't take. We shouldn't think that we are in any way.

1:08:47 racially or ethnically superior, because we certainly are not. But they also have a government that subsidizes industry wants to dominate the global automobile industry. And I think if if the US gets hard evidence that China the Chinese supplier industry, or automotive industry, for that matter, is playing by different rules than what we play by in the West, then I think tariffs on Chinese stuff would be justified.

1:09:29 Interesting. Now I see you've got your books on display behind so do we need to promote a little? Sure. So a lot of executives have read your book. But given a few years have passed? What advice would you give with your reading experience since? Well, one, first of all, the lessons in guts are sort of timeless because they're lessons in leadership. The lessons in car guys were some bean counters are also timeless, because I said, car guys versus bean counters, but my ophthalmologist read the book. And he said, when I read that, I thought you were talking about the ophthalmology industry. And people from various industries tell me, You know what, it's exactly the same in my business. And I'll bet it's the same in the grocery trade. And one thing, Boeing, Boeing would not be in the mess today. If enough people had red car guys versus bean counters, because what happened to Boeing is precisely what I would want what car guys versus bean counters, tried to warn every large company in America, about which is bean counters are necessary financial discipline is necessary, the revenue coming in has to be higher than the

1:11:02 cost, etc, etc. But if you're into the airplane business, and you no longer are being run by airplane, guys, with the bean counters, checking up on him and making sure they don't go out of control that's necessary. What what I, the analogy I use is the product guides are the engine. And the bean counters are the steering wheel, and the brakes. And for a successful car, you need both. But you're not going to have a race winning car if the focus isn't on the gadget.

1:11:45 So I hope I am heartened by the fact that friends tell me that I continuity, it's, by the way, Timeless Lessons in leadership, what works and what doesn't. And it kind of even before it became well known, but I kind of covered the Elon Musk syndrome. Because my premise in the book is that successful leaders of large organizations are often flawed individuals. They're ultimately they're successful, but they have a weird side to them, which makes them hard to work for. And I think you know, Elon Musk is the poster child for that, without question, the most brilliant minds of the 21st century, but also without question, the strangest and most controversial CEO of the 21st century. So which one do you want to focus on? I think Jobs had a pretty good reputation for being not so easy to work for.

1:12:52 Yeah, another another, another good example. But I am heartened by the fact that friends of mine who work for NASA, tell me that car guys versus bean counters is being read by people in NASA. And it's being read in the Pentagon. So my financial well being doesn't rely on book sales, happily. But I would, I would like, the lessons especially of car guys versus bean counters, and icons and idiots. I would like to see those lessons, or the Yeah, the the lessons in the book more broadly read, because I think it would be good for American society. What would someone be surprised to know about you, Bob?

1:13:47 Well, I think many people are surprised that I own two pet pigs. House and I love him dearly. And pigs are I find them extremely interesting animals. Because if you want slavish adoration all day long, and somebody to tell you how great you are 24/7 got a dog. Pics don't do that. Pigs regard you as Winston Churchill said, dogs worship us. Cats looked down on us, pigs consider us they're equals. And that's really true is pigs are highly intelligent, and they have their own minds. And if you win the affection of a pig, you've earned it. And it's a very interesting dynamic. The interaction with a pig is something really wonderful. I love those things. The other thing that many people might be surprised to hear is that I love to cook and I spend a great deal of time in the kitchen. A third thing that is becoming a little bit better now.

1:15:00 One is that I am a very enthusiastic practitioner of time honored modeling media, which is making highly accurate, highly detailed scratchbuild. Airplane and car models out of paper. I saw that article. Yeah. Okay, so that was in Hemmings, I think. And so the word is getting out on that one. Now the pigs, I'm intrigued by the pigs, I've I've certainly heard about pigs, relationships and pets and personnel. But are they housebroken? I mean, you take them outside and they go, they are at birth, if you go to a farm and visit the pig site.

1:15:48 If you got 20 Pigs in a in one enclosure, they select a corner that is designated as the urine and defecation area. And the rest of the place is clean. And what Mother pigs have litters. The first thing they show him is you go here. And when you get a baby pig, where you usually when they're seven weeks old, or eight weeks old, you're just showing the litter box, they may have one accident before they get it. But they're automatically and totally broken. But it's not about waiting until you let them out if they use a litter box, or paper or whatever the area's Well, you know, in the winter, when it's cold outside, they prefer to use the litter box. In the summer, we leave the door open and they go out on the property and an interesting like humans, they don't want to be seen when they're going to the bed really got there. So as the pig breeder said, if you watch that litter box the whole time, they're not going to go, you have to go do something else. And when you come back, you will find that the poop fairy has visited the litter box. That's, that's very, very, very interesting. You know, naturally, it's difficult to go when someone's watching. But I would say that I would rather pee while people are watching then tee off at a golf course.

1:17:20 Want to say and what would you like people to know about you? I would like people to know that. Even though I'm a former Marine officer, and believe in duty and commitment. I don't think I'm a hard person to work for. I think I'm understanding I think I listen. I think I'm fairly empathetic. And it bothers me what used to bother me in the like the Wall Street Journal ad have a favorite phrase. Is that that cuff talking cigar chomping ex Marine, Sergeant rock. Yeah. And I don't think I'm like that. I think I'm basically very soft and squishy. I can be hard when I have to be but I don't like doing that. That's not me. Did you evolve to that? Bob? Did you mature to that one of the leaders tools in the toolkit that you occasionally have to use, and you have to be assertive.

1:18:29 I see very nice people who are bright, have a great education. And they're not assertive. And if you're not assertive, unfortunately, you're not going to go anywhere. Bob, I want you to know that for me personally, this is a moment I'll never forget whatever celebrity or rock star or astronaut or whoever you'd like to meet. That's what it was like for me the last hour and change. I really appreciate it. You're overly kind, but it feels good. All right, well, wonderful. This has been Jeff Sterns connected through cars