Famous MBA Bashes MBAs and the Degree

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by John A. Byrne on

Former GM Vice Chairman Bob Lutz doesn't much care for MBAs

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,” published June 9th, 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.’”

DON’T MISS: CONAN: ‘TRANSFER MBAS TO WHITE COLLAR PRISON’ or WHY JOSH KAUFMAN THINKS BUSINESS SCHOOL IS A WASTE

Air Time - Comments
  • Chris Ryan Smith

    I can’t tell you how many MBA’s I’ve met who are only concerned with their functional role (bean counting, analysis, marketing). Why go get an MBA to keep pumping out excel spreadsheets on the daily? To Lutz’s point, a leadership career exists at the intersection of function AND industry. The MBA needs to do a better job at directing MBA’s to become industry leaders, not just functional doers.

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  • Bruce Vann

    Brani, I’m happily going to Darden. I CAN’T WAIT!!!

  • Mel Gibson

    Engineering is hard, and people are lazy.

  • Brani

    Bruce:

    That certainly is a motivation.

    Good luck. Did you decide where you would go?

  • Oh, to go back to the 60’s………What A Rush! In the 1960’s MBA degrees were the rage! You only needed an MBA degree and you got your foot in any corporate door because your Boss didn’t have one and as a result, you could command respect and more money. Every large or medium sized company in North America at one time was at FULL production and increasing World exports were unchallenged. Now, you have competition coming from every country including Bangladesh, once the poorest Country in the World.

    Do we need less MBA’s today and more engineers? I think that we need more ‘innovators’ that can come from many disciplines including engineers.
    And, don’t forget MBA’s today are specializing in subjects like Entrepreneurship, International Commerce, and other areas of interest that are closer to today’s needs in the marketplace. Finally, there are many MBA’s that have begun careers in the economic growth areas eg. China, India and yes, Bangladesh which will eventually balance the supply and demand for MBA’s.

  • xp

    If the world needs more engineers, pay them more. If MBA’s deserve bashing, pay them less.

    The truth is that the demand for MBA’s produce MBA’s. If we really needed more engineers, the market will adjust and people will follow the money.

  • Bruce Vann

    Brani, that’s a pretty good reason engineers should get MBA’s. 🙂

  • Brani

    the problem with engineering is that it’s very cyclic, and pay flattens out after 10-15 years… in other field you get more $$$ with more experience, but with engineering you are a liability after a certain point…

    -Brani

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