It truly is the end of an era. Bob Lutz, the cocksure maverick who led a product renaissance at both General Motors and Chrysler, will retire effective May 1. When Lutz goes, the industry will lose one of its best car guys and a strong personality known as much for his gravelly pronouncements at auto shows as he was for the automobiles he helped create.

GM will surely miss his direction in the company’s new-car works. When Lutz arrived in September 2001, GM was putting out bland cars and cutting corners on all but its most-profitable pickup trucks and SUVs. Designers also took a back seat when the company set up to develop a new model. The company would engineer the underpinnings of a car, putting all considerations from engineering, manufacturing and marketing first. Then designers would wrap a steel body around it. The results were typically rote and boxy. When GM tried to step out with design, it ended up with cars like the famously garish Pontiac Aztek SUV.

Lutz brought design to the forefront. The company started its new cars with the styling concept first and then started to make changes for fuel economy, cabin space or aerodynamics or any other practical attribute. Stylists didn’t win every battle, but clearly design has improved immensely under Lutz’s reign. It took several years for Lutz’s overhaul to take hold. When it did, the results were much better cars that typically sold for thousands of dollars more than the old model they replaced. The current Cadillac CTS and Chevrolet Camaro have been critically praised. The Camaro has consistently outsold the rival Ford Mustang since its launch last year. GM has had to add production for the Chevy Equinox and GMC Terrain SUVs.

Under Lutz, GM spent more cash to spruce up GM’s cabins, where the company’s finance-driven management team had often shaved budgets. Eric Noble, president of California auto consulting firm The CarLab, said the Malibu has nicer materials inside than a Toyota Camry. The Saturn Aura and Malibu won North American Car of the Year awards in 2007 and 2008.

Lutz also spearheaded the Chevrolet Volt program. The fruits of that work will come this fall when GM starts selling the car, which is engineered to run purely on electric power for 40 miles. Lutz had to make three passes at now-fired GM Chairman and CEO Rick Wagoner to get an electric car approved.

Lutz wasn’t Mr. Green. This is a guy who flies his own jet fighter and has a passion for sports cars. He argued against government fuel economy rules and eschewed hybrid-electric cars until he saw the kind of marketing mileage Toyota was getting for its Prius. He famously declared Global Warming “a total crock.”

He also had some misreads when it came to the models he put out. The new GTO in 2004 was a cult favorite among gearheads, but the car was based on Australia’s Holden Monaro coupe and its jellybean styling looked dated. GM sold about 1,000 GTOs a month before ending production after three years. Remember the truck-nosed minivans? Lutz put an SUV face on the Chevy Uplander, Saturn Relay, Pontiac Montana and Buick Terrazza in 2005 and they, too, flopped. Lutz said at the time that it was a low-budget program. It was also bad badge engineering.

More recently, Lutz was overseeing marketing. He played a big role in the “May the Best Car Win” campaign that compared GM’s models to the best from Japan and Germany. It was audacious and showed that the company had confidence in the new cars Lutz and GM’s team had produced. GM still has a long way to go to convince some consumers to give its cars a look, but the campaign boosted showroom traffic.

Things changed in December. Whitacre and the board fired former CEO Fritz Henderson and later made Lutz an advisor. Lutz was dismayed at Henderson’s dismissal. Being an advisor with little authority didn’t suit his style, either. As Henderson told me today, Lutz “wants to be in the game.” At 78, Lutz has had a long run. If he isn’t having a major impact, he may as well kick back.

Someone has to pick up where he leaves off. Without Lutz to bring a product focus to GM, the company may surely be lost right now. Tom Stephens, GM’s vice chairman of global product operations, and GM-North America President Mark Reuss are the two men who will have to keep the car culture burning at GM, says Jim Hall. Lutz says he left a system in place to make sure it happens. And the two executives minding the car works have the sense to keep it going. Stephens is a car nut with an impressive collection of muscle cars and deep engineering knowledge. Reuss recently ran GM’s Holden business, where he had a big hand in developing the Camaro and beloved Pontiac G8 sports sedan. He is an engineer by training and has just the kind of expertise GM needs high up in management.

There may be tremendous pressure to return to old habits. Chairman and CEO Ed Whitacre is driven to boost sales, turn a profit and take GM public as soon as he can. That way the government can sell its 61% stake and GM can ditch the “Government Motors” moniker. But with that drive could come the pressure to shave costs to show potential investors a better bottom line. That isn’t to say Whitacre doesn’t believe in good products, though he has said little on the subject. But the company will have to resist the urge to pinch pennies. And management will do it without Lutz’s force of will. Hopefully for GM’s sake, the team he leaves behind will be able to do it.

You’d think that General Motors Chairman and CEO Ed Whitacre, who built AT&T with $200 billion worth of deals, would be a savvy poker player. Well, judging from the grousing over his recent television ad, in which he talks about paying off the government’s loans ahead of schedule, he may have overplayed his hand. Yes, GM paid off $8.4 billion in loans to the U.S. Treasury and the governments of Ontario and Canada about five years early. But crowing about it in a television commercial has generated some controversy.

You don’t have to go too far to find someone in the commentariat grousing about how GM paid back the loans. The gripe is that GM paid the debt portion of the government’s investment with cash the company got from the government’s equity investment. Here’s how it works. When GM emerged from bankruptcy, it got $49.5 billion in cash. The U.S. Treasury and governments of Ontario and Canada gave GM $8.4 billion in loans. The rest of the money was given to GM in exchange for stock. The U.S. government owns 61% of the company and Canada owns 11.7%. Back in July, the feds decided to give GM enough cash to get through a longer, deeper recession, according to a former member of President Obama’s Auto Task Force, who asked not to be named because the discussions were private. As the economy started to recover and auto sales have climbed, GM found it had more cash on hand than it needed. Repaying the government loans wasn’t such a hard thing to do. So when Whitacre goes on television saying “we have repaid our government loans, in full, with interest, five years ahead of the original schedule,” his comments raised a few hackles. “They were repaying Uncle Sam with money they already got from the government,” snapped Maryann Keller, an independent consultant in Stamford, Conn. Senator Chuck Grassley (R-Iowa) weighed in during his weekly webcast calling Whitacre’s television appearance, “a little bit disingenuous.” He also said, “They’re paying it back with bailout money that they have from the federal government in the first place.”

To be fair, there is plenty of politics in play. Some critics simply didn’t like the bailout in the first place. The early payment is a small sign that GM’s business is getting back on track. If the company’s sales were tanking and cash flow was a problem, they’d keep all of the money until things turned around. GM’s sales are up 18.4% this year. GM-North America President Mark Reuss has done a commendable job of reining in incentive spending, giving GM better pricing on its cars. The company may turn at least an operating profit this year. So far, Whitacre and GM are doing many of the things they need to do to turn the business around.

The problem is that the early payoff shows only that GM is stable enough to give some money back. They aren’t making big profits yet. It’s one small benchmark on a longer haul. Going on television raised a hue and cry to a feat that some see as pretty marginal. There’s one other problem with Whitacre’s ad. He kicks it off by saying, “a lot of Americans didn’t agree with giving General Motors a second chance. Quite frankly, I can respect that.” Why would Whitacre want to remind Americans that the company needed to be bailed out? GM has a bit of momentum in the market. Vehicles like the Chevrolet Camaro, Buick Lacrosse sedan and Cadillac SRX and Chevy Equinox SUVs are red hot. Clearly, plenty of consumers are getting past the now-tired “Government Motors” tag and buying GM’s cars on their merits. If Ed goes on TV again, he might want to start with that.

General Motors Chairman and CEO Ed Whitacre has sent out his second memo in two weeks in an effort to make his rank-and-file staffers feel better about working at GM. In his latest note, sent out on April 12, Whitacre wrote to the staff that, “I anticipate solid operating results when we report our financials in May.” This follows a March 31 memo in which the media-shy Texan said that the major executive changes are already done. The current team will take GM forward, he wrote.

Whitacre didn’t say exactly what he means by “solid operating results.” Given his impatience for real results, I’d bet that means, at long last, some black ink. Consider a few facts. If you exclude $2.6 billion in costs for a union retiree healthcare fund, $400 million in currency losses and $100 million to wind down Saturn, GM lost just $300 million in the fourth quarter of 2009. During that same quarter, sales were down 24% in the U.S.

In the first quarter of this year, GM’s sales are up 18.4%. GM has some red-hot models, such as the Chevrolet Camaro pony car and Chevy Equinox and GMC Terrain SUVs. The company is adding production for all three vehicles. The company is even boosting production for its full-sized Chevy Tahoe and GMC Yukon SUVs built in Arlington, Texas. Hey, I don’t know who wants those guzzlers, knowing that gasoline prices will rise again. But they are selling and GM will make a mint off of them while they are hot.

Don’t forget a couple other things. That healthcare trust that GM poured money into took over retiree medical benefits starting on Dec. 31. So you can trim those costs for the first quarter. Going forward, GM will also be able to hire new workers at half the pay of the assembly-line veterans. Throw in rising sales in Asia and South America, and GM might really have something. GM’s troubled European business will be drag on earnings until the company can get it fixed. But elsewhere, we are seeing the seeds of a turnaround. It all starts with a bit of black ink.