Clearly Lutz had his job cut out for him. He worked from the inside out. Product neglect at GM showed most noticeably in wretched interiors. Anyone who slid into the driver’s seat floated in a sea of cheap plastic assembled with all the care and precision of a four-year-old putting together an Erector set.

“Frankly, before Bob Lutz came onboard, interiors were not the priority,” admits Ed Welburn, GM’s vice-president of global design. “Often the interiors were developed in the 11th hour, and if the costs were not in alignment on the car, you would take it out of the interior. Then Bob came in with fresh eyes, talking about how bad our interiors were. We quickly reversed things.”

The exteriors were only marginally better, and Lutz made sure that changed just as fast. The curvy Pontiac Solstice two-seater earned Lutz his first big design gold star at GM. The Chevy HHR borrows liberally from the Chrysler PT Cruiser’s retro-minivan aesthetic but still turns heads (and sells well). Fans of the Cadillac CTS love its angular stance, while Saturn has transcended its plastic-bodied roots to showcase styles from GM’s European design centers.

Yet no car exemplifies the renewal of the product line better than the new Chevy Malibu, which debuted in late 2007 and vaulted GM into serious competition with Honda, Nissan, and Toyota in the all-important midsize family sedan segment. Car & Driver magazine named the four-door one of its 10 best cars of 2008.

At the same time as he overhauled the product line, Lutz set about remaking GM culture, aided by his outsider status and the recognition that the company’s future was so grim there was no reason not to follow his lead. When anyone came to Lutz saying something couldn’t be done, Lutz responded with “Says who?” Soon SEZ WHO? stickers began appearing all around the company headquarters.

Still, he can’t single-handedly raise the Titanic. The union’s refusal to make needed concessions at the bargaining table until a year ago led to GM depleting its cash resources to pay benefits and wages that far outstripped labor agreements made by foreign manufacturers, destroying profit margins. General Motors’ average U.S. labor costs are $69 per hour; Toyota’s, $48. (Unions are about the only thing Lutz won’t talk about. “It’s very sensitive,” he says.) Just as bad, GM shortchanged development of small, fuel-efficient cars for so long that it has a lot of catching up to do. While Toyota invested research money into the Prius hybrid, GM deep-sixed its EV1 electric car program and launched Hummer. It effectively ceded its role as the industry leader, pulling to the curb while Toyota sped ahead. Then came last fall’s economic collapse and December’s bailout.

If Lutz is grateful, he doesn’t show it. The congressional hearings were “a humiliating spectacle,” he says. “I hated to see three distinguished executives who are blameless put through that ordeal. I’m amazed that the financial institutions got hundreds of billions more than we did and were not put under this kind of scrutiny.” Like his fellow execs, he believes that healthcare costs and “an ever increasing tide of regulations” have burdened U.S. auto companies at the expense of foreign competition. The current troubles represent “a crisis in overall demand,” says Lutz. “Japanese sales are down just as much as ours. It’s not just raining down on dumb old Detroit.”

—-

—-

Lutz’s office at the GM tech center is like a rich kid’s bedroom in the 1950s, shelves neatly arranged with beautiful models of Ferraris, Ducatis, and Corsairs. He has a full-scale replica of a Lamborghini engine sitting in the center. On the walls, where posters of a boy’s heroes would hang, are pictures of Lutz. On his desk sits a quote etched in Lucite attributed to Italo Calvino: “Play is the mainstay of culture.”