Lutz says may stay more than three years at GM and defends removal of ABS as Std Equip.

TRAVERSE CITY, Mich., Aug. 7 Justin Hyde writing for Reuters reported that with one year of a three-year contract under his belt, General Motors Corp. Vice Chairman Bob Lutz on Wednesday said he may stay on at the world's largest automaker a little longer. ADVERTISEMENT

"The three years still stands, but there's a high chance, if I'm willing, for that to be an indefinite period," said Lutz, the 70-year-old former Chrysler executive hired by GM Chief Executive Rick Wagoner to revamp the automaker's vehicle lineup and design system.

After spending most of his first year rearranging GM's schedule for new vehicles and delaying some models for redesigns, Lutz said he would focus more of his attention in the future on GM's vehicles outside North America and that there were "tremendous opportunities" to use GM's foreign resources more effectively.

"I do believe the organization is focused in the right direction in North America, and it doesn't require as much of my intense attention as it did in the first six to eight months," Lutz told reporters at the auto industry's Management Briefing Seminars in northern Michigan."

In a wide-ranging talk, Lutz also said foreign automakers could be hurt if the dollar remains weak against foreign currencies. He said GM was considering exporting the Cadillac CTS sedan to Europe until currency fluctuations reduced GM's potential profit by $7,000 per vehicle.

"There's no doubt that the results of some of our European and Japanese competitors still reflect a period of very favorable exchange rates for them," Lutz said. "If the dollar were to sink below certain major currencies, I dare say the imports would face some payback."

Lutz said that while GM's quality and manufacturing efficiency were improving, there were still several areas for improvement, such as warranty costs.

Lutz said GM had closely examined Chrysler's offer of an extended seven-year or 70,000-mile powertrain warranty, but could not figure out how the extra cost was justified in additional sales.

Chrysler executives say the warranty was affordable to the company because of its improved quality and that it helped ease customer concerns. But Lutz said such a warranty could actually make customers think less favorably about an automaker's quality. In a recent GM clinic, buyers marked down their perception of Toyota's quality after GM told them about a hypothetical extended warranty.

"We don't see where it helps them," Lutz said. "People today expect the vehicle to last seven years and they expect not to have any powertrain problems for seven years."

In a separate session at the seminar, Lutz defended GM's decision to make anti-lock brakes optional on many models rather than standard for the 2003 model year.

He said GM had earlier decided to make anti-lock brakes standard on nearly all models, even when many of its competitors did not. He also said the decision was made only because GM had found no statistical evidence showing anti-lock brakes improve vehicle safety.

Lutz said he also wanted to reduce GM's use of daytime running lamps, which are standard on all its vehicles. But the company said the lights improve safety, especially for pedestrians.