Peter Schutz

To­tal 911 plays trib­ute to the late, great Peter Schutz, one of the most im­por­tant fig­ures be­hind the 911's suc­cess

Total 911 - - Contents - Writ­ten by Kieron Fen­nelly

“Can you do that?” asked an as­ton­ished Bott. “Yes I can,” was Schutz’s re­ply, and for a while he re­ally could. Hav­ing re­in­stated the 911, he goaded the rac­ing depart­ment into build­ing the Le Mans-win­ning 936, en­cour­aged the pro­duc­tion of the ‘miss­ing’ 911 ver­sion, the Cabri­o­let, and above all, vastly in­creased Porsche sales and prof­its. For a time it seemed that ev­ery­thing he touched turned to gold. But of course there is far more to the story than a sim­ple run of luck.

It is of­ten said that peo­ple make their own luck, and that, to a large de­gree, de­fines the sort of man Peter Schutz was. Born in Berlin, he was the first of two sons of a Jewish pae­di­a­tri­cian, Leopold Schutz, who at the time of Peter’s birth in 1930 was teach­ing at Berlin Univer­sity. By the mid-1930s it was in­creas­ingly ap­par­ent to Dr Schutz that although his chil­dren and wife were not classed as Jews, the fam­ily would never be safe from the Nazis, and in 1938 he ac­quired exit visas. In­cred­i­bly, he then felt con­strained to give th­ese visas up to four of his Jewish un­der­grad­u­ates who were in dan­ger of im­mi­nent ar­rest. It was March 1939 be­fore he could se­cure more exit visas for his fam­ily. In a com­pelling pas­sage in his semi-au­to­bi­o­graph­i­cal book The

Driv­ing Force, pub­lished in 2005, Schutz re­counts how the fam­ily fled to Stet­tin (now Gdansk) with the Gestapo lit­er­ally on their tail, and just man­aged to catch a ferry to Oslo. From there, they sailed to Ha­vana, and en­dured a two year wait in penury

(the Cubans re­fused Leopold Schutz a work per­mit) un­til they se­cured visas to the US. Once in North Amer­ica, things were hardly bet­ter at first. De­spite his qual­i­fi­ca­tions, Dr Schutz had to fold sheets in a Chi­nese laun­dry and do other me­nial work un­til he ob­tained US cit­i­zen­ship – a five year process – and could take the ex­am­i­na­tion to prac­tice medicine again. Shortly af­ter, re­calls Schutz, they went to see

Yan­kee Doo­dle Dandy at the cinema and were all moved to tears. On their re­turn home, Dr Schutz told them: “We are now Amer­i­cans. No more

Ger­man will be spo­ken in this house,” and Peter Schutz added, “We had fi­nally ar­rived; we were proud to be Amer­i­cans.”

In 1952, with a BSC in me­chan­i­cal en­gi­neer­ing from the Univer­sity of Illi­nois, he joined Cater­pil­lar, work­ing in a se­ries of prod­uct-de­vel­op­ment roles. Ex­po­sure to Cater­pil­lar cus­tomers gave him a taste for sell­ing rather than en­gi­neer­ing, and in 1967 he went to Cum­mins Diesel as a prod­uct plan­ner,

be­fore even­tu­ally be­com­ing sales chief. Fol­low­ing the oil cri­sis of 1974, and re­spond­ing to a per­ceived need to re­duce fuel con­sump­tion, Cum­mins fit­ted a fuel pump which re­stricted diesel flow. As a con­se­quence, trucks us­ing Cum­mins en­gines went slower. This frus­trated driv­ers, who would keep the old model of pump and re­fit it as soon as they were clear of the com­pany de­pot, re­fit­ting the fac­tory-spec­i­fied item be­fore they re-en­tered the de­pot. Schutz, who had sev­eral times be­fore ad­vo­cated do­ing what the cus­tomer wanted rather than what Cum­mins wanted to make, thought this situation was silly: com­pa­nies were not get­ting bet­ter mpg, driv­ers were an­tag­o­nised and there was a ten­dency to blame the en­gine sup­plier, Cum­mins. Schutz en­cour­aged Cum­mins to build a more pow­er­ful en­gine in the first place which, be­cause it wasn’t be­ing driven at the limit, would pro­vide bet­ter mpg, and would please the driv­ers who would feel their com­plaints had been lis­tened to. Ac­cord­ing to Schutz, his so­lu­tion was a hit – Cum­mins made more profit from the big­ger en­gine, and Schutz him­self was seen by Cum­mins clients as a man­ager with their in­ter­ests at heart. He was even in­vited to ad­dress the Team­sters Union congress (the big US trans­port trade union). This was a step too far for the con­ser­va­tive Cum­mins board who for­bade him, and Schutz re­signed over the point of prin­ci­ple.

From In­di­ana and Cum­mins he would move to Cologne, Ger­many as pres­i­dent of the diesel divi­sion of con­glom­er­ate Klöck­ner Hum­boldt Deutz – a re­mark­able switch for a man who had fled Ger­many al­most 40 years ear­lier. His role at KHD would prove a very ef­fec­tive prepa­ra­tion for his later role at Porsche: he dis­cov­ered the dif­fer­ences be­tween Amer­i­can and Ger­man busi­ness cul­ture and, above all, re­learned the Ger­man he had not spo­ken since his early teenage years. When the call from the head hunter em­ployed by Ferry Porsche came, al­most on Schutz’s 50th birth­day in April 1980, he was puz­zled, but keen to know why a car com­pany should be so in­ter­ested in a heavy diesel en­gi­neer.

In fact, the Porsche board was not look­ing for an en­gi­neer or a car in­dus­try spe­cial­ist; it was en­tirely con­fi­dent in the en­gi­neer­ing of its prod­ucts. Where it had lost con­fi­dence was in its abil­ity to sell cars and make prof­its. 911s lay stock­piled in a field be­hind the plant at Zuf­fen­hausen. In Schutz they saw a man who could bring new life to the com­pany’s mar­ket­ing, es­pe­cially in the US, then worth 55 per cent of Porsche’s sales. Schutz’s en­gag­ing na­ture and out­go­ing per­son­al­ity im­me­di­ately ap­pealed to Ferry Porsche, who was se­verely bruised by the long feud with his pre­vi­ous CEO Ernst Fuhrmann. Schutz was quick to note this, and one of his first moves af­ter his ap­point­ment in Jan­uary 1981 was to eject the ac­counts depart­ment from the of­fice fac­ing his own and have it re­fur­bished for com­pany chair­man Ferry, who had moved his base to Lud­wigs­burg to avoid daily con­tact with Fuhrmann.

He also recog­nised that of Porsche’s three prod­uct lines: 924, 928 and 911, only the lat­ter, the model it in­tended to drop, made any profit. Not a sports car spe­cial­ist, in­deed he had never driven a Porsche, he had nev­er­the­less done his home­work, and knew from his re­search in the US that Amer­i­can buy­ers loved the in­di­vid­u­al­ity of the 911, but the car’s rep­u­ta­tion was let down by the camshaft chain ten­sioner, which had a habit of fail­ing out­side the guar­an­tee pe­riod. When he asked Zuf­fen­hausen en­gi­neers about this, they told him re­pairs were a prof­itable rev­enue stream for af­ter­sales, so they had no in­ten­tion of chang­ing any­thing. This was just the kind of ar­ro­gance that brought the best out of Schutz: much in the way he be­rated the rac­ing depart­ment for plan­ning to race at Le Mans with the 924 – a car they told him had no chance of win­ning – he shamed man­u­fac­tur­ing into re­design­ing the chain ten­sioner. He toured US deal­ers, where his al­most evan­gel­i­cal ap­proach won hearts and minds for Porsche. Sales in­creased, and as the dol­lar grad­u­ally ap­pre­ci­ated, so did the prof­itabil­ity of ev­ery 911 sold in

North Amer­ica.

Schutz’s can-do op­ti­mism had a gal­vanis­ing ef­fect, not least of which was to en­cour­age the 959 su­per Porsche. Af­ter years of re­straint un­der Fuhrmann, Porsche plunged into this project a lit­tle too fast: whereas an­other CEO, Bob Lutz of Ford for ex­am­ple, who had been Ferry’s first choice for the role (he turned Ferry down) would also have spot­ted the folly of drop­ping the em­blem­atic and prof­itable 911, he might also have suggested more cau­tion with the 959. Porsche was right to in­ves­ti­gate all wheel drive (and since 1995 has made a prof­itable virtue of it in its Turbo mod­els), but try­ing to make the car from the out­set with ev­ery avail­able state of the art tech­nol­ogy was surely doomed. Sup­plier de­lays and sub­se­quent

cost over-runs would be in­evitable, and to com­mit so much in­vest­ment to build­ing a model which could not be sold in Porsche’s most lu­cra­tive and im­por­tant mar­ket, the US, was also ques­tion­able.

A pri­vate pi­lot and fly­ing in­struc­tor, Schutz had a vi­sion of US Porsche own­ers driv­ing their 911s to the lo­cal air­port and tak­ing off in their Porsche-pow­ered planes. He talked the com­pany into de­vel­op­ing the 3.2 en­gine for avi­a­tion: the fuel-in­jected flat six Porsche Flug­mo­tor could, with its smooth­ness and econ­omy, of­fer a mod­ern al­ter­na­tive to the an­cient four-cylin­der Ly­coming units beloved of US pri­vate avi­a­tion. Ten mil­lion Deutschmarks were in­vested in the project, which log­i­cally should have suc­ceeded, but which foundered on an el­e­ment of ‘not in­vented here’ among the Amer­i­can plane builders. Porsche also mis­cal­cu­lated – US pri­vate pi­lots were not rich, and they would not shell out a fur­ther $50,000 to have a Porsche en­gine in a plane which al­ready cost $150,000 with a Ly­coming unit. The project was quickly wound down in 1988 af­ter Schutz’s de­par­ture.

Car and Driver com­mented that the whole ini­tia­tive seemed to cor­re­spond more with a per­sonal in­ter­est (Schutz’s) than as a re­sponse to a le­git­i­mate mar­ket de­mand.

While sales and prof­its went up – over Schutz’s ten­ure, pro­duc­tion went from 28,000 units in 1980 to 58,000 in 1986 and prof­itabil­ity was quadru­pled – be­neath the sur­face were dan­ger­ous cur­rents. The 944, rightly pro­moted by Schutz, was a bril­liant sports car, par­tic­u­larly the turbo, but it was not a

911. The 911 it­self had re­ceived lit­tle de­vel­op­ment dur­ing the decade, but much cre­ative re­source had been chan­nelled into the 959, which by 1986 was still no nearer launch and re­coup­ing some of its costs. In the bow­els of Porsche, in­ven­to­ries were high and Wen­delin Wiedek­ing, who had joined the com­pany in 1983 as a pro­duc­tion tech­nol­ogy spe­cial­ist, found that his was a lone voice com­plain­ing of the to­tal lack of parts com­mon­al­ity be­tween the 944 and the 911. Crit­i­cism of Schutz came from Tony Lap­ine, a Fuhrmann loy­al­ist who said “Pri­vately he was a good guy, great com­pany, but what­ever his in­struc­tions, if things went well, he would take the credit; if some­thing went wrong, it was al­ways your fault.” Man­ag­ing di­rec­tor of UK dis­trib­u­tor AFN John Ald­ing­ton, who had firm ideas on main­tain­ing the ex­clu­siv­ity of the 911 in his mar­ket, also clashed with Schutz, whom he ac­cused of merely be­ing in­ter­ested in sell­ing vol­ume.

Schutz got into far worse trou­ble with US deal­ers. Porsche’s US im­porter was VW Audi, and Porsches were sold through 300 Porsche-audi deal­er­ships. Zuf­fen­hausen wanted to break free from this and, in Fe­bru­ary 1984, Schutz in­formed Porsche deal­ers that the com­pany was es­tab­lish­ing Porsche Cars North Amer­ica, which would op­er­ate 30 Of­fi­cial Porsche Cen­tres around the coun­try. Th­ese, built to the OPC tem­plate, would be open within a year. The pro­pos­als caused up­roar. Deal­ers who had pre­vi­ously bought di­rect could still sell Porsches, but re­duced to mere sales agents they would have to buy from their lo­cal OPC, mak­ing only 8 per cent against a pre­vi­ous 16 per cent. In the land of lit­i­ga­tion, their lawyers went into over­drive, and within a month Schutz was star­ing at a pos­si­ble 3 bil­lion dol­lar law­suit. Zuf­fen­hausen re­lented, re­tain­ing its pro­posed head of­fice, PCNA in Reno, with re­spon­si­bil­ity for im­port and dis­tri­bu­tion, but the OPC scheme was aban­doned. The af­fair was over be­fore it af­fected sales but Schutz, who had planned the scheme and sold it to the Zuf­fen­hausen board, was hu­mil­i­ated. This episode marked the be­gin­ning of his dis­so­lu­tion with Porsche.

The dol­lar reached its high point in mid-1985 at one dol­lar for ev­ery 3.2 Deutschmarks, but then it be­gan its in­ex­orable slide – DM 2.4 in 1986, and DM 1.9 the fol­low­ing year. Porsche earned less and less money on each car sold, and price in­creases drove cus­tomers away. Asked by jour­nal­ists what plan B was, Schutz replied there was no plan B: Porsche’s cur­rency hedg­ing was fairly min­i­mal, so the ex­change rate had an im­me­di­ate im­pact. Af­ter Black Mon­day, 25 Oc­to­ber 1987, the Porsche board’s dis­en­chant­ment with its Amer­i­can CEO reached a new level, and Wolf­gang Porsche was de­puted to in­form Schutz his seven year con­tract was be­ing ter­mi­nated early. This suited Schutz, who was equally dis­en­chanted. He was the first of sev­eral sac­ri­fi­cial lambs: Lap­ine and Bott would fol­low in 1988. Schutz flew back to the US to re­join his wife, Sheila, who had re­turned some time ear­lier. An as­tute busi­ness­woman in her own right, Sheila had never felt at ease, it was said, in a so­ci­ety which was so male dom­i­nated.

Porsche did not emerge from this dark pe­riod un­til 1994-5, by which time its board had seen off more top man­agers, no­tably Ul­rich Bez, Bott’s suc­ces­sor as en­gi­neer­ing di­rec­tor, and CEO Arno Bohn. But un­like many in his po­si­tion, the ebul­lient Schutz, who ef­fi­ciently pro­moted by Sheila had be­come a fea­ture of the uni­ver­si­ties speak­ing cir­cuit, bore no grudges. Friends said he un­fail­ingly spoke of Porsche with the pas­sion of a man still work­ing there. In later years, Porsche be­lat­edly recog­nised this, and Peter Schutz, al­ready a star of the US Porsche en­thu­si­ast com­mu­nity, re­port­edly found that his pen­sion had been in­creased. Porsche also ex­tended of­fi­cial in­vi­ta­tions to him, bring­ing him to Leipzig in 2004 to the open­ing of the Cayenne plant.

Peter Schutz was the right man at the right time for Porsche. His em­pha­sis on deal­ers and cus­tomers helped to turn Porsche from be­ing a largely en­gi­neer­ing-ori­en­tated com­pany into the mar­ket­ing spe­cial­ist it later be­came. If he was blamed for the ex­trav­a­gance of the 959 or the avi­a­tion project, it must be said that the board of share­hold­ers, which in­cluded Fer­di­nand Piëch, backed him al­most with­out ques­tion in the early days. The cli­mate of op­ti­mism Schutz es­tab­lished was also con­ducive to things Porsche did best, like the com­pany’s bril­liant re­turn to sports car rac­ing with the 956 and the im­mensely suc­cess­ful F1 joint ven­ture with Mclaren.

If ul­ti­mately his luck ran out, the ma­jor fac­tor – the dol­lar’s fall – was be­yond his, and in­deed ev­ery­body’s con­trol. Some­one had to do it though, and Peter Schutz’s Porsche legacy will in­evitably be as the man who saved the 911.

ABOVE It was Schutz who pushed hard for the 959 project’s fruition, even if es­ca­lat­ing costs and mul­ti­ple de­lays at the time meant it bore a heavy load on Porsche’s fi­nances

Left Aside from sav­ing the 911, Porsche’s revered 959 owes much to Schutz’s legacy – lots of its tech­nol­ogy is still em­ployed on the com­pany’s sports cars to­day

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