A Conversation with GM North America President, Mark Reuss

At the auto show yesterday, I had the opportunity to participate in a round table discussion with GM’s recently appointed President of North America, Mark Reuss. Reuss was a pretty down to earth guy who had worked his way through the engineering and product side. He described spending Fridays actually doing vehicle drives with engineers to stay in touch with the cars. Reuss had an ongoing banter–which I think had started on Twitter–with some of the auto bloggers who also attended the conference.

He listed three things that are his top challenges for 2010 (where I use quotations, they are my rough transcriptions of what Reuss said).

  • Getting through dealer legislation with integrity and transparency. As I’ve covered a number of times, as a result of pressure from Congress, GM and Chrysler are going to review the decisions about dealer closures they made last year and give dealers an opportunity to arbitrate those decisions. Reuss saw this as a huge opportunity to make sure GM had the right size of dealer network. To make these decisions, he envisioned he’d be working through every dealerhsip, working through that every day. Reuss said the criteria for the decisions would be dealer throughput, the dealer network in the area, and the customer satisfaction for a given dealer. Reuss did say he though GM’s relationship with the dealer body is very very good.
  • Change the perception of North American customers of what this company is about and what it’s going to offer. About GM’s new products, Reuss said (roughly), “We’ve got product now that we haven’t had in my career. I don’t want to say it’s competitive, I want to say it’s winning product.” He talked about the trust that GM will need to build after having gotten loans from the government and gone through bankruptcy and hoped to build that trust by using his own behavior to model a customer focus. He talked about hoping to use social media like Facebook to become more responsive to customers’ problems and concerns. “How can I ignore someone who sends a message to our inbox that they can’t get their Terrain?” he asked. He described one recent example of a person who bought a Cobalt, where a couple of engineers drive 8 hours to State College to repair a wheel house liner, and clean the car up.
  • Position the cars better from a market and advertising standpoint. Reuss talked about making smarter decisions with media and advertising. Particularly on point, given all the concerns about bailed out companies sponsoring bowl games and the like, he said, “I don’t think the most efficient [advertising] spend for us as a company is sponsoring a big event. I really do think the most efficient spend is at grassroots events. On the coasts in particular. If we show people at a Little League baseball game what the car is, there are going to be some people that are interested in our cars. There’s a whole generation of people that we have an opportunity with to teach the new GM.”

Reuss had some interesting responses to particular questions.

In response to a question about reliability, he admitted GM right now is unproven (as with a Caddy that Consumer Reports highly rated, but would not recommend because the quality was unproven). He admitted that GM needs to prove it has the quality to compete.

In a follow-up question on the dealer network, he admitted a really important point about the dealers–that GM had flooded them with product, making it very difficult for the dealers to sell the cars on value. “We overproduced, the dealer has to sell that, they have no choice. If we’re selling a good car at a good value, and the customer understand the value and design and reliability, the dealer will sell that car that way. Dealers know how to sell that car. It’s all about the car and the brand.” This is a point I’ve been making repeatedly–until the US auto makers (and this includes Ford) stop selling on price to push product out the door, and instead start selling on the quality of their product, they’re going to have a hard time to sell these cars profitably.

One person asked a question I asked elsewhere: will GM offer manual transmission and/or diesels in non-performance cars. Reuss talked about doing so in an upcoming Buick.”I think that can be really fun that’s not in the hairy gold-chained kind of thing. It can be done in an elegant sophisticated way.” He said GM had some great diesels around the world, and seemed to want to bring them to the US, if they could find segments in the US in which “there’s people that will pay to have the equipment to clean it up that makes it a good emission performer.”

In response to my question about the Congressional delegation that had attended the show yesterday, he said it was, “a big deal to meet some of the folks that helped us,” and described thanking them for that help. Meeting them, he said, meant “They could put a name with a face to me.” He went on to describe their response: “I think they were honestly impressed, we showed them the Volt, and the Cruze. The Cruze is the first real small car this company has had in a while. I launched the Cruze in Australia. Between those two cars, that’s about 6500 jobs.” (I’ll have much more on the CoDel later today.)

Finally, he said this about the connection between GM’s having received the government bailout and his desire to really work on rebuilding relationships with GM customers. “People have got to understand that I care, employees have the will to win. This isn’t about a consumer brand choice, it’s a relationship. If they’re not buying into the relationship, I take that very personally. I don’t want to fool around with taxpayers’–or my own–money. Because we’d have this whole thing happen again.”

Of the GM folks I talked to yesterday, Reuss was one of the more impressive. Sure, he’s saying a lot of the things he knows he needs to say (though it is nice to have him admit he’s working with taxpayer money). But he also seems very grounded in the cars, aware that GM needs to prove itself, and willing to support the kind of customer service to make sure it does so.

Disclosure: GM hosted me for this event, which means they did things like pick up my credential for me, take me and others to dinner on Sunday night and breakfast on Monday morning.

  1. MadDog says:

    Breakfast? That’s undue influence in my book! *g*

    Minor typo: “…were a couple of engineers…” where were should be where?

    And minor sentence construction: “…If we show people at a Little League baseball game to show people what the car is…” might read better as “…If we go to a Little League baseball game to show people what the car is…”

  2. Citizen92 says:

    Completely O/T. Data point.

    Doug Coe (of the Family) is (was?) apparently close to Lee Bandy of THE STATE newspaper in South Carolina. [Bandy was a senior political reporter with that newspaper. His byline now reads “Lee Bandy, a retired political reporter for The State, has covered S.C. politics for more than 40 years. His column typically runs Sundays.”]

    Source – Washington Post’s 1996 article on Lee Atwater. Coe was counseling Atwater after Lee learned he had a brain tumor. Bandy’s name comes up in context.

    I find that interesting, since The State broke the Governor Sanford story – after sitting on the emails for about a year.

    Wondering if Doug Coe outed Sanford — and if the recent purge of others’ secrets may have been at Coe’s hand. Or just simply a coincedence.

  3. TarheelDem says:

    Another issue for all automakers is transparent pricing to permit comparison shopping instead of discouraging it. All of the rebate-incentive nonsense drives customers nuts.

    And a note on dealer ads: Customers don’t give a shit that a dealer has to sell x number of cars by the end of name a month. And they’re beyond falling for the illusion that this situation means better prices for customers. In general, customers don’t care about how your business works and the jargon associated with it. They want a straightforward product or service with no surprises and no hassles. They’ve not been getting that from US dealers of American automobiles.

  4. BoxTurtle says:

    GM needs to keep accountants out of the car design process.

    My personal experience: I like muscle cars, and in 94 I choose a Trans Am. It was nice on the inside, didn’t feel like cheap plastic and it flat flew. Got the 350 engine and the 6 speed manual transmission.

    I’d had it for only a couple of day when the flaw appeared. The cars computer would look at your accelleration and speed and if you were in a certain range it would decide you should double shift from 1st to 4th and light up a light on the dashboard. IT WOULD ALSO BLOCK OUT 2ND AND 3D GEAR!

    I first encountered this turning left, expecting to shift into 2nd. By the time I realized what was going on, I no longer had the speed for 4th and had to sit halfway through the intersection until skip shift went off.

    I called the dealership and told them I wanted that feature disconnected. They told me they weren’t allowed to do so. And they told me that if they detected that a third party had done so, it would at once void my warranty! No reason given, just company policy.

    I raised hell. I finally got in touch with the actual designer of the transmission. Not through my repeated calls, which only got me a promise of a callback, but when I trashed the transmission on the eval survey HE called me personally to ask why I hated his transmission.

    He was forced to put that feature into the transmission by the accountants. With the skip shift and a skilled driver, they could get the gas mileage to the point where GM could avoid a gas guzzler tax. There was no reason other than that to refuse to disconnect the feature, which could be done by pitting a 1 meg resistor in series with the sensor line to the transmission. He told me how to do it and told me it would be undetectable unless they actually worked on the transmission.

    I fully intended to wait until that feature caused me to get rear ended and then sue GM, but I managed to avoid that. Lots of close calls. I still wonder how many accidents that feature caused.

    Boxturtle (There’s a special pit in Hell for those accountants)

    • earlofhuntingdon says:

      That’s a marketing decision, too, to avoid the tax as both a factor in the price and the stigma of being too much or too little car for the target audience.

      As with any complex system, you can’t fiddle with one subsystem without considering other inputs. Otherwise, the orchestra sounds like it’s tuning up instead of playing Beethoven. Another reason why putting a phone guy – and Goldman Scratch – in charge is pretty absurd.

      • BoxTurtle says:

        Too much car for the target audience? The target audience for Trans Am cannot have too much car, their only problem is they can’t afford a vette. And the addition of the manual transmission should tell even the dumbest accountant that the car is headed for a car buff.

        And furthermore, as someone who drives a skipshift, I would state under oath that feature is a safty issue. According the the engineer I spoke with, that decision saved $1500-2000 in gas guzzler taxes. I paid $26K for that car, I’d have paid an extra $2K to get one that worked like a Trans Am should. But they were concerned about their fleet mileage as well, so they wouldn’t even consider it.

        Boxturtle (Would help Satan dig the accountants pit deeper if asked)

        • emptywheel says:

          As you’ll see when I link up all the YouTubes from the Congressional Delegation yesterday, Pelosi was asked one question at her press conference yesterday: why can’t we have a gas tax. A gas tax would eliminate such perverse incentives.

          • BoxTurtle says:

            Shorter answer: Because any congresscritter who votes for a gas tax is likely to be replaced by the voters in the next election.

            IMO the public WOULD support a gas tax to fix the roads. But one hint that the taxes sole purpose is to reduce consumption by raising prices would kill it.

            Boxturtle (Thinks that banning drivethrus would reduce gas consumption more than a gas tax)

        • earlofhuntingdon says:

          As I said, marketing as well as finance (“accounting” doesn’t capture the process, but it captures the feeling) would have signed off on the entire package, offending transmission and all. Not quite getting their customer profile right (can’t have too much TransAm) – and matching it with sufficiently uncompromised products – is a longstanding GM problem.

          You might have been willing to pay the extra tax; the broader base they were targeting might not have been. Or the decision might have related to externals, such as the total number or percentage of cars subject to the tax.

          The Japanese, for a time, avoided that vulnerability, which helped make them very successful here. One way they did it was to avoid stove-piping. They rotated their high fliers through each major department – finance, engineering, production, marketing – so that as they acquired increasing levels of authority, they appreciated the interrelatedness of the challenges they were trying to meet.

    • emptywheel says:

      Well, one of the significant factors of Reuss’ being President NA is that he is totally an engineer. Bob Lutz is curiously absent from this show–so I get a feeling that this is really the passing of the product torch from Lutz to Reuss.

    • readerOfTeaLeaves says:

      Wow, that is really, really heartwarming — and a testament to all 3 men.

      Will catch up with the post later…

    • skdadl says:

      Wonderful — thanks for that, WO.

      Months ago, someone here (or maybe at a linked story on HuffPo?) mentioned that Binyam Mohamed was on Facebook, so I decided to try, and — what can I tell you? — we friended. We haven’t had a lot of interaction, but I check his page out every once in a while to see how he’s doing.