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If Bob Lutz were emperor of the United States

In a semi-jocular speech to the SAE, the former GM vice chairman said he would raise the gas tax and lower fuel economy standards.

By Douglas Newcomb Apr 22, 2013 9:52AM

The SAE World Congress, which took place in Detroit last week, is typically a staid gathering of automotive engineers. So if you’re an event organizer, how do you help it make headlines? Get Bob Lutz, the controversial former General Motors vice chairman and loose cannon, to deliver a keynote. He didn’t disappoint.


SAE asked Lutz, who also served in executive posts at Ford and Chrysler, to frame his speech around what he would do if he was declared king of the auto industry for a week. Living up to his nickname of “Maximum Bob,” Lutz instead insisted he would need to reign over the entire United States to be effective, and would require the title of emperor and the ultimate power that such a position bestows.


In the speech, the conservative-leaning Lutz straddled the line between an old-school auto exec and green futurist, declaring that he would call for an “honest debate” on climate change (which he once called “a total crock”), a simultaneous rise in U.S. gas taxes and a rethinking of federal fuel efficiency standards and even high-speed railroads.


On climate change, Lutz said he “would insist on giving equal time to the growing scientific body that is not convinced that climate change is man-made. That's what this emperor would decree."


Commenting on "complicated CAFE and CO2 legislation," Lutz said that the federal government was misguided to raise fuel economy standards. He said that the federally mandated CAFE standards, which call for raising average fuel efficiency to 54.5 miles per gallon for cars and trucks by 2025, are “attacking the problem from the wrong end of the pump.” Lutz proved his point using this amusing analogy: “Reducing fuel consumption by forcing automakers to sell smaller vehicles is like fighting obesity by forcing clothing manufacturers to sell only small sizes.”


Lutz also said that new federal fuel efficiency requirements will cause consumers to pay much more for new cars than what the government is claiming. He projected the cost to the average consumer will be an additional $5,000 for a new car, compared with government estimates of $1,726.


“This emperor would ask that the laws of common sense be applied,” he said. “And in this case, the laws of common sense simply dictate -- always has -- that if you want someone to use less of a given commodity, you raise the price of that commodity.”


His solution would be to raise the federal gas tax, which hasn't changed since 1993, in an effort to lower fuel consumption. Lutz said that most drivers “wouldn’t even notice” a 25-cent-per-gallon tax at the pump, and that the hike in the national gas tax over the next decade would get the U.S. in line with the rest of the world and help shift the country into smaller vehicles.


Lutz also argued that raising the gas tax is the best way to pay for improving what he called “the unholy mess of this nation's highway infrastructure” that’s an “absolute embarrassment to the United States.” Lutz acknowledged that it’s unlikely to happen in the current political climate. And according to a recent Gallup poll, most people don't want it.


Because he was speaking at an engineering conference -- and because he's Bob Lutz -- the 81-year-old semi-retired car exec called for automakers to invest in powertrains and materials to keep the cars of the future from turning into "suppository-shaped, aerodynamic appliances." This can be accomplished, he said, using carbon fiber, lightweight steel and the "widespread hybridization of vehicles."


While Lutz said electric vehicles are part of the driving future, he predicted that they will continue to sell at low volumes because of their high cost, lengthy charge times and limited range. He doesn’t foresee that  large-scale adoption of EVs will happen until they can achieve a 400-mile range, charge in an hour and cost the same as a gasoline vehicle.


Lutz had a similar dismal outlook on diesels, even though U.S. automakers will soon be rolling out diesel versions of the 2014 Chevrolet Cruze Diesel and the 2014 Jeep Grand Cherokee. He said that "people are buying [diesel-powered vehicles] and paying a premium price because they want interesting technology."


Lutz could never be accused of being a tree-hugger, but he discussed developing an "intelligent balance" between mass transit and the automobile using local and intercity high speed trains. He said if the U.S. had high-speed "bullet" trains connecting the coasts as in Japan or France, it wouldn’t affect the auto industry. “I think 80 percent would come out of the hide of the airline industry,” he said. Lutz added that “anybody who has fought rush hour traffic in a major American city” can be convinced “that mass transit makes a lot of sense."


It was a colorful speech from one of the auto industry’s most colorful characters. And it’s entertaining to hear Lutz expound on what he would do as emperor. But he acknowledged that “the sad reality is that that's not going to happen, because I'm not going to be emperor."


And that’s probably a good thing.


[Source: The Detroit News]

Apr 22, 2013 11:44AM
What a Lutz. Higher gas tax so economy can slow down even more and hurt the lower income the most. Why doesn't' GM get to work and be more innovative. It's like a kid who doesn't want to study or do homework asking the teacher to lower the test standard. Was it a surprise he drove the company to bankruptcy? At least GM is trying now that Emperor Lutz is gone with diesel and hybrid cars.
By the way, many governments are trying to make mass transit workable. Lutz isn't the first to come up with this brilliant idea. By the way american car companies, GM included, were the ones that killed in the mass transit system in places like Los Angeles decades ago by buying up the mass transit companies and shutting them down so that people will buy cars.
Apr 22, 2013 10:30AM
Lutz's comments make sense but if this guy is so bright, why did the entire American auto industry near collapse a few years ago while he was working in these high positions? How can such huge companies that are selling millions of cars each year get so close to bankruptcy? Sounds like a management problem to me.
Apr 23, 2013 5:22AM
“Reducing fuel consumption by forcing automakers to sell smaller vehicles is like fighting obesity by forcing clothing manufacturers to sell only small sizes.”

But it works! If my clothes start feeling tight and uncomfortable, it is a sign I need to cut down on my calorie intake.

By the way, Bob Lutz is a person who ruined every company he was in. He has consistent results behind him. He is a stereotypical example of a greedy, rich executive who is completely disconnected from reality.
Apr 23, 2013 5:26AM
"He projected the cost to the average consumer will be an additional $5,000 for a new car, compared with government estimates of $1,726."

What this "executive" is saying is that the vehicle manufacturers will attempt to pass the expense on to the consumer, rather than allowing the expense to cut into their profit margins and amortize it over a longer period.

That will only work if the consumers agree to foot the bill; otherwise, the vehicles will sit on the lots.

I see no reason why I should foot that bill. I think it is perfectly OK for their profit margins to take a hit. They make plenty of profit, now it is time to give some of it back.
Apr 23, 2013 7:25AM

I totally agree with the "intelligent balance" statement. Unfortunately our government is neither.

54.6 mpg is just not reasonable, unless we all drive go karts.


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