Kill or cure for the Swedish patient

Robert Lutz is instituting big changes at General Motors Europe. He has plans for Saab and wonders whether we Europeans should drive Cadillacs. He talks to Richard Feast

Robert A Lutz should wear one of those T-shirts that say "Been there, done that". No one working in the car industry has more top-level experience in more companies. A Swiss-born American, Lutz had a long and dazzling career at General Motors, BMW and Ford before retiring as vice-chairman of Chrysler six years ago. Somehow, no one was surprised when a Florida twilight home held limited appeal.

Robert A Lutz should wear one of those T-shirts that say "Been there, done that". No one working in the car industry has more top-level experience in more companies. A Swiss-born American, Lutz had a long and dazzling career at General Motors, BMW and Ford before retiring as vice-chairman of Chrysler six years ago. Somehow, no one was surprised when a Florida twilight home held limited appeal.

He was persuaded out of retirement in 2001 to take charge of new model programmes at GM, the world's biggest vehicle maker. It is perhaps an indictment of earlier GM corporate culture that it needed a retired outsider to tell it what sort of cars to make.

Lutz is busy rattling cages at GM. "What's the worst that can happen? Rick [Wagoner, GM chairman] could retire me" says the 72-year-old Lutz.

For the moment, he is also acting president of GM-Europe in Zurich until the new man, Fritz Henderson, starts. Even as a temporary seat-warmer, though, Lutz could not leave well alone. He says, "I told myself, you're only here for three months. Why get myself in an uproar? Why do something controversial? I'll just do the 'steady as she goes' and stabilise the patient until the real surgeon arrives. But it just drives me crazy when I see things that aren't working the way they should. I can't restrain myself."

Starting in late February, Lutz instigated a complete overhaul of GM businesses in Europe. The strategy - apparently drawn up with Henderson's approval - will be revealed by July, Lutz promises. Something needs to be done. Despite previous revival plans - known as Olympia and Viggen - GM loses money in Europe. Market share is well below that of a decade earlier.

The review will determine the types of cars GM will sell in the region: Vauxhalls, Opels, Saabs, Daewoos, Chevrolets and Cadillacs. It will involve changes to organisations and managements. Employees are nervous.

However, Lutz says the shake-up will have failed if buyers notice. Its purpose, he insists, is to improve quality and broaden consumer choice - as well as make GM more efficient. Reading between the lines, then, that should mean the future of Vauxhall is safe.

But Vauxhall's dowdy image needs jazzing up. That is why it decided to sell a Vauxhall version of the Monaro V8 coupe made by Holden, its sister company in Australia. The fact that, alongside other Vauxhalls, the Monaro looks and behaves like a fighting bull among a field of Friesians does not matter, according to Lutz. It helps to change perceptions. For the same reason, Vauxhall wants a version of the new Pontiac Solstice roadster as a Mazda MX5 competitor. What prevents this is European pedestrian protection legislation that requires a bigger gap than the Solstice has between the bonnet and engine. If GM can get the restyling right, it will sell a distinctive version known as the Vauxhall Lightning.

Cadillac, the corporation's American luxury marque, will have a much bigger future in Europe as well. It is part of a grand scheme for Cadillac to live up to its slogan from the 1930s - "the standard of the world".

Cadillac sales in Europe are based on American-made models, but there is a secret plan to make an all-new and smaller model at Saab's Trollhattan factory in Sweden. The car, aimed primarily at European buyers, would have the latest, hi-tech Cadillac look. But it would be the size of the Saab 9-3, have diesel engine options and be sold in right- and left-hand drive. Lutz would not comment, though he acknowledges that "Cadillac needs locally produced cars that are smaller".

Saab itself seems destined for a major shake-up. The Swedish firm is believed to have made small profits only twice during the past 14 years under GM control. It consistently fails to meet sales targets. "We, in essence, made the same mistake that BMW made when it bought Rover," Lutz acknowledges in relation to Saab. GM allowed Saab too much autonomy for too long, though the corporation is not about to follow the BMW move of selling Saab.

Instead, Lutz implies that Saab will become a GM brand, rather than a stand-alone car maker with its own design, engineering, purchasing and manufacturing departments. If Saabs become integral elements of all future Opel/Vauxhall new-car programmes, it will ultimately mean a broader range.

But while there will be larger, smaller and different sorts of Saabs, there are no plans to sell the new Subaru-based Saab 9-2X nor the Chevrolet-based 9-7X (pictured) in Europe. In addition to the absence of a diesel engine option on the 9-2X - essential for any chance of success in Europe these days - the manufacturer in Japan wanted sales restricted to North America, says Lutz.

The final leg of GM's European strategy involves Daewoo. Some assets of the failed South Korean car maker were bought by GM. The legacy of the failure is a handicap in showrooms.

"We're doing business during alterations with Daewoo," says Lutz. "There's a lot of residual-image effect to overcome, because the original Daewoo company went bankrupt and now we're selling Daewoos again. It's a hard struggle to get over the image and reputation."

So why not call them Chevrolets, as Daewoos are known in central Europe and much of the rest of the world? Lutz pauses: "I just don't know. Seriously. We might. We might."