Actually, Lutz has a very strong track record, and deserves more respect than he's likely to be shown here.
The thinking of "Apple has been successful in most stuff since 1998, therefore everything they do will be a huge success" is dangerous and wrong.
He has a good track record for what? Making mediocre cars at best? He's EXTREMELY narrow minded and stubborn which shows in the cars GM sells which can't compete with the Japanese on the low-mid end, and not even in the same universe as the Germans in the mid-high end. GM, and Chrysler, shouldn't even be here. They should have died off in the recession but instead we kept two underachieving car companies afloat by lending them money. But finally a new age of American innovation in the automotive world is taking shape in Apple and Tesla.
Well, if anyone's an expert at losing money in the auto business, it's GM.
Actually, just among the better known ones, the following companies make a profit: Mercedes, BMW, Porsche/Audi/VW (but perhaps not for much longer), Jaguar, Toyota, Honda, Nissan, Ford, GM....
I have absolutely no clue what this guy's going on about. Perhaps he's still stuck in his days in the industry in the US when it stank to high heavens, losing money hand over fist.
Lutz understands the car industry and car customer . . . of his era. I don't think he has a clue what the rising generation of customers is looking for. It's not torque and horsepower, it's not a throaty exhaust note, not a thrilling ride(at least his notion of what that is), none of the things he focused on when he was still running things. His statement that nobody wants to buy an electric car just reveals his failure to comprehend.
In fact, when an auto industry dinosaur says the things Lutz says about an electric car project, that's a sign that the project is on the right track.
Elon Musk has said that if all Telsa were doing was making Model S and selling it, they would be making a profit, it's only because they are investing so much in capacity expansion and R&D for the Model 3 that they are making a loss overall. So it is possible to make money selling electric cars.
Maybe if GM aren't making any money, it's more to do with the particular models they have designed, rather than anything inherently unprofitable about electric cars.
Or maybe it's the fact Tesla charges $70,000+ for their cars?
Very strong track record indeed. One of the largest and worst U.S. bailouts in history, not to mention the whole ignition switch scandal. Steer clear of Bob Lutz.
And watches. It's funny when history repeats itself.
What product since '98 has Apple had that has failed? That they haven't made money on? Services is another story that their working toward but even then overall they make money on services too. AAPL is a product company. They have the luxury of time and money to work toward a better product. They don't have to be first. And, quite frankly (speaking as a multiple Chevy owner), Apple's recent track record is much better than GM's.
Congrats on not knowing history! Lutz was one of the executives responsible for bringing Chrysler back after Iacocca ran it into the ground again. During his time there he advocated for large technology advances and strong R&D investment. It wasn't his fault Daimler took it over and ran it into the ground again.
Also, the G4 Cube was a huge flop which sent the stock and earnings tumbling after launch.
Apple shareholders should be upset? GM shareholders have more reason to fear, given the history of the Detroit car industry and that all of the big 3 are a mere shell of their former magnitude. Why? They never were able to read the market and were always years behind in development. Their stock value is pennies on the dollar. When Apple asks for a bailout, Lutz can gloat. Until then, he may want shut up and reflect on where his company is today, and why.
These comments come from someone that reps an old school thought process that has run GM into the ground... In recent years there has been a zero quality standard from GM.. The same ole products with nothing that has ever made me want to buy one.. Their amazing product lines along with their denials into recklessness rand that has been company into the ground... So much so that for a guy that's worried about his shareholders saw it fit to pawn off GM stockholders into bankruptcy.. The only way they ever saved GM for bankruptcy court was when Obamma stepped in and offered the bond holders .15 cents on the dollar... If there was any other president overseeing that deal, GM would be speaking Chinese... Time for the old hard of thinking to go to their graves.. It's also time for the world to change the way it thinks, yet again...
And " yeah, it's got a Hemi" and my stocks been rocking for the past 15 years...
Yeah , I and others here posted the same exact same thing when we heard about the Apple car. Hopefully that isn't the case, but really, from tiny little high margin gadgets you can transport in tiny little boxes, to a huge product requiring enormous amounts or raw material, warehouse space, transportation costs, dealers, repair shops, liabilities, on and on.
I always thought the genius of Apple was the tiny little high margin element of the iPhones. Kinda the same as MS back in the day with tiny little high margin box of air and software. Kinda like the oil business monopolies, a straw that sucks oil out of the dirt sells with huge margins. This pain written all over it.. Ask Elon Musk.
The greatest arrogance stupidity in his comments -- and in those of some commenters here -- is the assumption that Apple will be stupid enough to walk into a "gigantic money pit.
"When it comes to actually making cars, there is no reason to assume that Apple, with no experience, will suddenly do a better job than General Motors, Ford, Volkswagen, Toyota, or Hyundai," Lutz said. "So I think this is going to be a giant money pit.
As Volkswagen drops 25% on news of their diesel cheating scandal.
The greatest arrogance stupidity in his comments -- and in those of some commenters here -- is the assumption that Apple will be stupid enough to walk into a "gigantic money pit.
Get real.
You could (and I would) argue Apple Music is a money pit. Streaming is not a profitable business.
This guy may or may not know what he is talking about here. But let's look at his track record with GM...my computer does not have enough memory to type all of the bad decisions this guy has made over the last couple of decades...
People keep making comparisons to iPhone in 2007. Steve Jobs stood up on the stage and showed us an iPhone. When Cooks drives an Apple car on stage, then I'll get excited.
Or maybe it's the fact Tesla charges $70,000+ for their cars?
Congrats on not knowing history! Lutz was one of the executives responsible for bringing Chrysler back after Iacocca ran it into the ground again. During his time there he advocated for large technology advances and strong R&D investment. It wasn't his fault Daimler took it over and ran it into the ground again.
Also, the G4 Cube was a huge flop which sent the stock and earnings tumbling after launch.
Lutz liked halo cars, and he was good at it, but not much else.
Unfortunately for him, GM didn't survive on halo cars, and neither did Chrysler. The Big Three made most of their money on trucks( and for Chrysler, Jeeps), but oddly, only when gas prices were low and with dealer financing programs. They couldn't figure out how to build hybrids, electric vehicles, or low cost entry level cars and make money on them.
Ford was the wisest of the bunch, pre collapse, as they hired and ex Boeing guy, and just happened to get a financing bundle in place. Chrysler went to Fiat, and GM is back being GM.
And watches. It's funny when history repeats itself.
What product since '98 has Apple had that has failed? That they haven't made money on? Services is another story that their working toward but even then overall they make money on services too. AAPL is a product company. They have the luxury of time and money to work toward a better product. They don't have to be first. And, quite frankly (speaking as a multiple Chevy owner), Apple's recent track record is much better than GM's.
Yeah, our favorite computer company has a strong track record building...computers (wrist-worn, desktops, mobile). Maybe they should go into nuclear power next. /s
So lemme get this straight. The former head of GM, a company that was in such a huge hole financially the US government had to bail them out, a company that made the laughably bad Volt, a company that is so bad at making any vehicle smaller than my first apartment that they have to silently partner with Korean manufacturers like Daewoo, a company that was literally eviscerated by Japanese manufacturers, a company that thinks the Corvette Z06 is actually an exotic supercar in the league of Ferrari or even Porsche, a company that can't even make a competitive diesel engine for their trucks, a company with so much brand redundancy that at least half of those brands no longer exist (Pontiac, Oldsmobile, etc), a company that pretty much killed Saab and Hummer.....I could go on for days here.
This company is predicting Apple's failure? REALLY?!?
I noticed hand-wringing. I always find it funny how they trash industries that they're in like 'Nah, the business we do? You don't want to get into that, there's no money it.'. If Apple's shareholders should be worried about it then so should the shareholders of every other car company in the world including GM because they're all getting into it. Does he somehow think it's going to be a passing fad and everybody reverts back to fossil fuels exclusively? Apple has input in their own batteries too unlike he said, even if they outsource manufacturing. They don't just buy them off-the-shelf:
Remember when Blackberry was so surprised with the full-screen iPhone because they knew you couldn't do it without a massive battery. It's not just about understanding how to build it but taking the risks to change the way consumers use products and get past assuming that the status quo is always the right way to keep building the products.
Apple has a long experience in inventory management and operational efficiency and they can ship millions of products worldwide in a weekend. Cars are a lot more mechanically complex than electronics but it just needs getting the manufacturing process right to be a strong competitor.
GM needs over 200,000 employees to put out around 10 million cars in a year. That's 27k cars per day. Tesla needs 12,000 employees to put out 55k in a year. That's 150 cars per day.
GM makes $156b per year with about 10m cars so $15,600 ASP. Tesla makes $3.1b per year with 32k units so $96,875 ASP although it might be $74,500 ASP if the revenue for the 10,000 backlog was charged in 2014.
Apple can easily fit in between them. 1 million units with 20,000 employees, 2,700 cars per day. The manufacturing will be automated so it just needs the engineering and design team to come up with the most operationally efficient designs. To be able to sell so many units, they need to hit an ASP around $30k. This would mean being able to build a car for no more than $25k. It's a challenge but what else is the team at Apple supposed to be working on? If they can add value to the industry and it adds to their profit then there's no harm in it.
Comments
He has a good track record for what? Making mediocre cars at best? He's EXTREMELY narrow minded and stubborn which shows in the cars GM sells which can't compete with the Japanese on the low-mid end, and not even in the same universe as the Germans in the mid-high end. GM, and Chrysler, shouldn't even be here. They should have died off in the recession but instead we kept two underachieving car companies afloat by lending them money. But finally a new age of American innovation in the automotive world is taking shape in Apple and Tesla.
Well, if anyone's an expert at losing money in the auto business, it's GM.
Actually, just among the better known ones, the following companies make a profit: Mercedes, BMW, Porsche/Audi/VW (but perhaps not for much longer), Jaguar, Toyota, Honda, Nissan, Ford, GM....
I have absolutely no clue what this guy's going on about. Perhaps he's still stuck in his days in the industry in the US when it stank to high heavens, losing money hand over fist.
Lutz understands the car industry and car customer . . . of his era. I don't think he has a clue what the rising generation of customers is looking for. It's not torque and horsepower, it's not a throaty exhaust note, not a thrilling ride(at least his notion of what that is), none of the things he focused on when he was still running things. His statement that nobody wants to buy an electric car just reveals his failure to comprehend.
In fact, when an auto industry dinosaur says the things Lutz says about an electric car project, that's a sign that the project is on the right track.
Or maybe it's the fact Tesla charges $70,000+ for their cars?
Congrats on not knowing history! Lutz was one of the executives responsible for bringing Chrysler back after Iacocca ran it into the ground again. During his time there he advocated for large technology advances and strong R&D investment. It wasn't his fault Daimler took it over and ran it into the ground again.
Also, the G4 Cube was a huge flop which sent the stock and earnings tumbling after launch.
C'mon, Lutz, you're smarter than this.
Apple has always said that they would not enter a market unless they are certain that the can "contribute" significantly to that market.
It appears that they have decided to enter the Automobile market.
Time will tell.
And " yeah, it's got a Hemi" and my stocks been rocking for the past 15 years...
Yeah , I and others here posted the same exact same thing when we heard about the Apple car. Hopefully that isn't the case, but really, from tiny little high margin gadgets you can transport in tiny little boxes, to a huge product requiring enormous amounts or raw material, warehouse space, transportation costs, dealers, repair shops, liabilities, on and on.
I always thought the genius of Apple was the tiny little high margin element of the iPhones. Kinda the same as MS back in the day with tiny little high margin box of air and software. Kinda like the oil business monopolies, a straw that sucks oil out of the dirt sells with huge margins. This pain written all over it.. Ask Elon Musk.
This pain written all over it.. Ask Elon Musk.
Maybe it doesn't have to be that way.
The greatest arrogance stupidity in his comments -- and in those of some commenters here -- is the assumption that Apple will be stupid enough to walk into a "gigantic money pit.
Get real.
As Volkswagen drops 25% on news of their diesel cheating scandal.
You could (and I would) argue Apple Music is a money pit. Streaming is not a profitable business.
People keep making comparisons to iPhone in 2007. Steve Jobs stood up on the stage and showed us an iPhone. When Cooks drives an Apple car on stage, then I'll get excited.
Or maybe it's the fact Tesla charges $70,000+ for their cars?
Congrats on not knowing history! Lutz was one of the executives responsible for bringing Chrysler back after Iacocca ran it into the ground again. During his time there he advocated for large technology advances and strong R&D investment. It wasn't his fault Daimler took it over and ran it into the ground again.
Also, the G4 Cube was a huge flop which sent the stock and earnings tumbling after launch.
Lutz liked halo cars, and he was good at it, but not much else.
Unfortunately for him, GM didn't survive on halo cars, and neither did Chrysler. The Big Three made most of their money on trucks( and for Chrysler, Jeeps), but oddly, only when gas prices were low and with dealer financing programs. They couldn't figure out how to build hybrids, electric vehicles, or low cost entry level cars and make money on them.
Ford was the wisest of the bunch, pre collapse, as they hired and ex Boeing guy, and just happened to get a financing bundle in place. Chrysler went to Fiat, and GM is back being GM.
Yeah, our favorite computer company has a strong track record building...computers (wrist-worn, desktops, mobile). Maybe they should go into nuclear power next. /s
So lemme get this straight. The former head of GM, a company that was in such a huge hole financially the US government had to bail them out, a company that made the laughably bad Volt, a company that is so bad at making any vehicle smaller than my first apartment that they have to silently partner with Korean manufacturers like Daewoo, a company that was literally eviscerated by Japanese manufacturers, a company that thinks the Corvette Z06 is actually an exotic supercar in the league of Ferrari or even Porsche, a company that can't even make a competitive diesel engine for their trucks, a company with so much brand redundancy that at least half of those brands no longer exist (Pontiac, Oldsmobile, etc), a company that pretty much killed Saab and Hummer.....I could go on for days here.
This company is predicting Apple's failure? REALLY?!?
http://www.wired.com/2015/03/apples-new-battery-tech/
Remember when Blackberry was so surprised with the full-screen iPhone because they knew you couldn't do it without a massive battery. It's not just about understanding how to build it but taking the risks to change the way consumers use products and get past assuming that the status quo is always the right way to keep building the products.
Apple has a long experience in inventory management and operational efficiency and they can ship millions of products worldwide in a weekend. Cars are a lot more mechanically complex than electronics but it just needs getting the manufacturing process right to be a strong competitor.
GM needs over 200,000 employees to put out around 10 million cars in a year. That's 27k cars per day.
Tesla needs 12,000 employees to put out 55k in a year. That's 150 cars per day.
GM makes $156b per year with about 10m cars so $15,600 ASP.
Tesla makes $3.1b per year with 32k units so $96,875 ASP although it might be $74,500 ASP if the revenue for the 10,000 backlog was charged in 2014.
Apple can easily fit in between them. 1 million units with 20,000 employees, 2,700 cars per day. The manufacturing will be automated so it just needs the engineering and design team to come up with the most operationally efficient designs. To be able to sell so many units, they need to hit an ASP around $30k. This would mean being able to build a car for no more than $25k. It's a challenge but what else is the team at Apple supposed to be working on? If they can add value to the industry and it adds to their profit then there's no harm in it.