>> this is. >> detroit is back. and we're not talking about the tigers. >> joining us now, the former vice chairman of general motors and author of the new book, "car guys versus bean counters," bob lutz , great to see you. >> great to be here, thank you. >> also the former vice chairman of general motors . >> there is that. >> so it's a fascinating book. you spent almost five decades in the auto business. i take it you're one of the car guys in this scenario. >> well, i like to think so, yeah. i've always been -- to me, being in the car business has always meant doing great vehicles. i enjoyed the business aspect, too. but without great cars, you're no place. >> now, who are the bean counters? you use that term kind ofder ricively. >> my theory, we made the business more complex than it needed to be, and we overtrained on the highly intellectual, left-brain, analytical side of the business and got to the point where hired extremely intelligent graduates from the best business schools . >> right. >> who could -- who were whizes with spreadsheets and line item metrics, but didn't really care about the product. the product to them was a transient form of money. >> right. >> you put money in one end, you create a product at the other end. it's hopefully more money. and if you don't -- i was one of the guys that always cared passionately about that middle segment, the product. because if people aren't captivated by the vehicle, it's not going to sell, or it will have to sell at a discount. >> that's the word. mike, it's captivating. listen, how many times have we seen detroit is down, but when detroit comes up is when you stop on the side of the road -- you stop driving and see a car go by, and you go, wow. >> right. >> or, for instance, you get into an american car that you haven't been in a while and close the door and it sounds good. >> right. >> and it drives good. and you see that with so many american cars now. >> well, clearly, off this book and off your deep belief, we went through a period of 20, 25 years when general motors filed for bankruptcy, american car companies went down. most people, i think, want to buy american, except they want the cup holders and the comfortable seats and the bean counters were looking at the spreadsheets instead of that stuff. >> yeah. i mean, the product that was -- picked apart. and materials were reduced in value. paint was taken off plastics. 12-ounce carpeting became 8-ounce carpeting and the whole thing was how much can we take out in order to improve margins before people start to complain. and i'm happy to say i looked at all three companies now. there is an intense focus on product excellence. you were mentioning interiors. the new chrysler grand cherokee or the jeep grand cherokee has a great interior. it's spectacular. the overland edition has an interior -- i defy anyone to show a german car with a better interior. and all three have the focus and the detroit three market share is once again expanding. and the asian share and the german share is declining. >> and they're good cars. and it's like you say -- i mean, the thing is, my dad, he -- when he grew up, he bought american cars . >> yeah. >> when his son started to buy foreign cars -- and i used to always joke -- if there was an american flag embroidered in the back, my dad got angry. we started buying cars, '79, '80, '81, when the handles were falling off. and i said, dad, when they make good cars, i'll buy 'em. 2000 , 2001 , when i could finally afford to buy whatever i wanted to buy, i started buying gm cars. because, you know, i bought a tahoe. four years -- guess what? when it was done, i went straight back to the dealer, i was like, i want another tahoe, another four years. nothing fancy. they drove well! america is making good cars. >> i make an interesting point in the book. the truck guys at all three companies never lost the focus on the customer. they knew exactly who their customers were. and they knew exactly who the competition was. and if you talked to a truck guy at chrysler , their next suv and full-size pickup, they're out to do more payload, more torque, more horsepower, more towing capacity than ford or gm, and it's the same thing with the gm guys. they look at ford and chrysler , and with each new vehicle they want to out-do the competition and fuel economy and all other attributes. so the interesting -- senior management never seemed to focus as much on trucks. >> right. >> there was less mettling. and of course, that's why the japanese truck manufacturers have never even put a dent in american full-size suv and pickup truck sales. they just can't be successful, because the american brands , all three of them, are so good. and willie, you know, you remember the old ad, have you driven a ford lately? >> yeah. >> i did. i landed in pensacola, and we -- we had to rent an extra car. and they gave us a ford. man, it's so much different than it was -- >> yeah. >> five years ago. >> the new ford explorer is great. >> yeah, it's a nice vehicle. >> beautiful car. >> i think, bob, all americans are happy to see the big three car companies doing well. >> i hope. so of. >> but it has to be said they wouldn't be doing well without the united states government . >> absolutely. >> what happened to the car industry to get it to the point where without the help of the government they wouldn't exist anymore? >> well, we -- the industry was in the process of fixing its problems. and as you know, in '07, under the leadership of rick wagoner , we did negotiate a deal with uaw that was going to get rid of this $7 billion a year health care burden. trouble was that didn't become effective until '10. so there was this three-year lag between signing the deal and getting rid of that burden. if we hadn't had the subprime meltdown in '08, coupled with that sudden doubling of gasoline prices, i think all three companies would have been okay. we would have made it, because we were all in the process of cleaning up you -- cleaning up the mess of the past and the legacy, because all of us were focused -- at least speaking for gm, we were absolutely -- all of the great cars that are coming out now were all -- including the chevrolet volt , were all in the planning and execution phase, way before chapter 11 . so -- but what happened with the subprime meltdown and all of the money being sucked out of the economy, the u.s. car market went from a going rate of about $17.5 million a year to $9.8 million. i mean, the market dropped by 50%. >> wow. >> and we went into the thing with about $15 billion of cash. we were bleeding $4 billion a quarter. so after, you know, 3 1/2 quarters, we were out of gas. ford, for reasons that had nothing to do with the crisis, had a cash pile of about $33 billion. and they were bleeding about $4 billion a quarter. so they -- chrysler 's was over before they hit the ground. and now they're getting credit for incredible foresight. even allen mulally will tell you, foresight had nothing to do with it, it was sheer luck. and toyota went in with $100 billion in cash, they bled $4 billion a quarter. >> right. >> so they never even felt it. they were probably slightly worried. but you're right. people now -- there was an op-ed piece in the " wall street journal " the other day by some learned professor of law who said, "this -- it didn't have to happen. the government didn't have to step in. it could have been a normal chapter 11 proceeding, like every other one." people forget. there was no money for debtor in possession financing. >> yeah. >> we obviously didn't want to be words of the government. so everybody clearly -- and the people who were leading us through chapter 11 also tried every avenue that was possible. >> right. >> to avoid a government intervention . but there was no money. the banks didn't have any money. the only entity in the united states in '09 that any money was the federal government . and they didn't either. >> yeah, exactly. >> bob lutz . >> it looks like detroit is going to have some money. that is great. >> thank you. the book is "car guys versus bean counters" you can read an excerpt on our website, joe.msnbc.com. >>> standing by in the green
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