Reprinted from PoetsandQuants.com
Legendary auto executive Robert A. Lutz doesn't seem to like MBAs very much--even though he happens to have an MBA from the University of California at Berkeley. After getting his MBA in 1962 with a concentration in marketing, Lutz left for Detroit and what would be more than 50 years at Chrysler, Ford, BMW, and General Motors.
In a new book, Car Guys vs. Bean Counters, he seems to take unusual pleasure in bashing people who have MBA degrees.
"I'm not a member of that club that views MBAs as largely unproductive," the former vice chairman of General Motors writes in the book. "I'm the president of that club." Lutz says he regards the MBA in the same way sailors do their tattoos. "I got it before I knew any better!."
The book is largely the story of GM from 2001, when then Chief Executive Rick Wagoner, hired Lutz out of semi-retirement to revitalize the slumping company's lackluster portfolio of cars and trucks. Lutz, for years a highly outspoken executive in Detroit, writes that GM was populated with man hard-working intelligent people who were trapped in a dysfunctional culture that was more interested in numbers and analysis than great product.
Part of the problem, he argues, were MBAs who had no love or passion for cars.
"At Chrysler, we tried to wean ourselves a bit from the MBA habit," he writes. "It used to be the case, for example, that a Chrysler engineer, in order to get ahead, would have to get his very own almighty MBA. We changed that. We began to encourage our engineers to get additional technical training--either an M.S., a Ph.D., or even a second B.S. in a branch of engineering different from their first bachelor's. We figured the United States had enough MBAs already.
"Actually, there's nothing wrong with an MBA, or for that matter, a law degree," Lutz says. "And I must admit that I myself have an MBA (though I sort of regard it the same way sailors do their tattoos--I got it before I knew any better!). If the United States is going to maintain the marvelous competitive position we've won in the world, however, we're going to have to keep ourselves focused on production and encourage more of our young to opt for careers that make production possible. The MBA degree will cover itself in glory the day its letters stand for 'Must Build things Again.'
Lutz ultimately believes that the U.S. needs more engineering talent. There are just too few engineers and too many MBAs, he says. "We need more nerds! And we need to stop thinking of our nerds as nerds. We need to think of them instead as an endangered population--like gazelles, maybe--More of our universities need to offer programs in manufacturing and industrial management," he maintains. "We need to put engineers on a pedestal. And your young people need to be taught that there's something noble about engaging in value-creating activity. Twenty or thirty years from now, when their grandchildren ask them, 'what did you do in the great economic war?' they shouldn't have to answer, 'I was a bond trader.'"
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