General Motors: back in high gear

The onetime industry king and erstwhile fuddy-duddy takes back the road, with retro-chic designs.

On a recent afternoon in the middle of a downtown food court here, people were doing what they often do in this city. They were looking at cars. Corvettes, to be exact – a string of Corvettes covering the 50 years the vehicle has been in production, including a new model that looks something like an electric razor and the 1970s hourglass-shaped Stingray.

But the ones getting the real attention were mint-condition 1950s models – short, slick convertibles with the look and feel of roadsters.

"Just look at those lines," one visitor marveled.

The "lines" are what many say have been missing from American cars – especially GM cars. After the new safety and fuel-economy standards of the 1970s, General Motors began producing what many believed to be the blandest cars on the market. For years, the company watched its bottom line suffer.

But after decades of problems, GM seems to be getting its act together, reestablishing itself as a market leader. Its market share stabilized in 2001. Its cars have become more reliable. And, perhaps most important, it has gotten back into the business of designing fun, eye-catching cars that reviewers are applauding.

In a time when manufacturing, the icon of postwar American power, languishes in the shadow of the lucrative modern service economy, experts say GM's revitalization is proof that it is still possible to "make" things here.

"This is not a quick-fix turnaround; these are very serious, detailed changes," says H. Kent Bowen, a professor at Harvard Business School. Plants and assembly lines have been altered, Dr. Bowen says, but just as important is a kind of retooling of the business psyche at the big three – Ford, Daimler-Chrysler, and GM – and at GM in particular.

"Ten years ago, the thinking was, 'We're going to make what we want and imagine that the public wants.' That's gone. They are much more customer- focused now. And it shows."

Car guys

The moves – such as building agile assembly lines to meet changes in demand, and finding ways to use standard parts on cutting-edge designs – are, in the end, all about making consumers happy. And the changes happened because of an infusion of "car guys," says Keith Crain, publisher of Automotive News.

In 2000, the company named Rick Wagoner as CEO. Mr. Wagoner hired Chief Financial Officer John Devine, who realized there was a problem, Crain says. "He said, 'Where are the car people?' They had finance guys; they had marketing guys, but they had no car guys. And then, last summer, they hired Bob Lutz."

Robert A. Lutz Jr. is not just a car guy; he's an über car guy.

He has worked for all of the big three, plus BMW. His last stop before coming back to GM as head of product development was at Chrysler, where he was the driving force behind the PT Cruiser, a 1930s-style truck-station wagon hybrid. The design was fresh, risky, and a huge hit.

Lutz's designs are a bit like the man himself: hard-driving and supremely self-confident. After 12 years at Chrysler, much of it on the corporation board, he penned the not-so-subtly titled tome "Guts: The Seven Laws of Business that Made Chrysler the World's Hottest Car Company." And since his arrival at GM, he has pushed his attitude onto the design staff he oversees.

He's ordered the company to trim and unify the design departments of its different name plates – Chevrolet, Pontiac, Oldsmobile, Buick, and Cadillac. And at this year's auto shows, it was GM's cars – such as the Chevrolet SSR, a 21st-century take on the Chevy El Camino – that were earning some of the biggest raves from reviewers.

This is a big change for a company that for years was considered the fuddy-duddy of the car world, says Crain. "What happened was [former GM CEO] Roger Smith decided that people didn't care what their cars looked like, and that is simply wrong. Consumers love cars. You need to build cars that create such passion [that] people will want to buy them regardless of what they own already."

A new idea? Not really. It bears the unmistakable mark of old-time Detroit thinking, when dazzling tail fins and long front ends were the rule. The odd thing is that GM, a Detroit fixture, took so long to rediscover it.

Back to the old days

The biggest of the big three, General Motors has long played an emblematic role in this city.

It is the only one of the automakers still to have its headquarters downtown – the others are in the suburbs. And high atop the 73-story central tower of the city's landmark Renaissance Center sit two letters: GM.

Throughout GM's history, utilitarianism took a backseat to design. Beyond its cars, which often placed form ahead of function, the company's old headquarters was an Art Deco landmark with an ornate interior designed by the renowned Albert Kahn. (When the company moved from its old landmark offices to the "Ren Cen" a few years ago, the city raced to make the ornate building the home of its municipal offices – only to be beaten out by the state.)

Now the company seems intent on recapturing that idea – with a focus on quality as well.

At GM's design center in nearby Warren, Don Siefkes, virtual reality studio manager, pulls up a 3-D picture of the new Chevrolet SSR on the 18-by-8 foot screen. "People really love the look of the SSR," Mr. Siefkes says, "and we were able to keep its assembly-line design very close to the concept."

The SSR looks thoroughly modern, but is clearly trying to evoke the 1950s – from its front end with minimal chrome and a v-shaped grill, to fenders that project from the body. It's only one of several retro-chic cars the company is planning to churn out, some of which bear a striking resemblance to the 1950s Corvettes at the food court.

A few rooms over at GM, the designers' new power is clear in the large corporate brand character studio. Built on designers' specifications for what a dream office would look like, the room has lights dimmed to nightclub level, and techno music pounding through speakers. Movie-sized screens line the front of the room with drawings, while men and women in casual attire work at a long, curving row of desks.

Still a long road

Of course, GM's changes won't cure all the problems of the company, or of the American auto industry as a whole. Even with better-built, better-designed cars, Detroit is taking its lumps. Rebates and zero-percent financing mean the profit-per-vehicle is dropping even if sales are rising.

"All of this is great news for the auto industry and for consumers because the competition is so fierce, but that is bad news for Detroit," says Crain.

But the key is in design. "We're seeing some neat looking cars and hybrids that blow people's minds."

"I'll tell you right now," he continues. "There are no rebates or deals on Thunderbirds or Monte Carlos. If you want one, you're basically going to pay sticker."

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