The Musical Highway: an engineering feat. When your tires roll over this piece of historic Route 66, it plays America the Beautiful. OK, don't believe me. See it for yourself!
Sunday, April 19, 2015
Tuesday, April 14, 2015
Here's more conversation with Mark Reuss, Executive Vice President, Global Product Development, Purchasing and Supply Chain, who spoke to a group of journalists at the New York Auto Show. He talks about Buick, Cadillac and how he figures out value for GM customers.
Yes. On the Malibu. “We’ve got competitors that are entrenched in the segment. So [we focused on] things we know are really important in the segment like operating costs, value, comfort and dynamic style. It is really hard to do on a sedan. It’s hard to create something that hasn’t been done before, something original, and I think we’ve done that with the Malibu.”
With Cadillac getting the focus on luxury could you discuss what the strategy is for Buick in the near term?
Buick’s been very, very successful. The articulation for me at Buick is really elegance and maybe a different approach to refinement than Cadillac. And I think that’s what Buick’s always been. And once in a while we’ll throw a wild card in there that gets everybody’s blood pumping like the GS AWD, which is really a great car and it’s right within Buick because it’s a beautiful car, very refined and elegant and still fun. So I think that’s it and I think the Avenir exudes every single piece of that that you could ever imagine. That’s why we did the car. That car is not a Cadillac. It’s not ever going to be mistaken for a Cadillac and its not hard to articulate why. And people get it. That’s why those brands are doing great—GMC and Buick.
The center for design for Buick is where? China?
There is no center for design. We’re a global design center. We really are. Our brand studio is in Warren, Michigan. The execution of the car though could happen at a studio in China and it has. Or it could happen here. But I don’t think it’s going to happen in Brazil. So those are the two spiritual places where the markets are. We can share workloads and we can do all kinds of stuff.
When you talk about Buick as an elegant and refined Brand I think of it in those terms as an older buyer.
You do and I do. The people a generation behind us don’t have any baggage behind Buick typically. So we’ve got a really cool buyer base that is diverse from a nationality standpoint and also from an age standpoint. We see a lot of people taking the Asian perception of the brand into the United States. It’s really not traditional, especially on the West Coast.
Can you articulate why you are successful in the premium segment and nobody else really is—why nobody can find the sweet spot?
I think we have a really clear vision of that and a focus on it and what it is and what it isn’t and that clarity I think is something that people really struggle with especially in a big company. But I started there and I grew up there. I worked in Flint for a good chunk of my career. There are some people that are Buick zealots and know what it should be and think that helps. bringing people in from the outside to tell you what Buick should be is probably not a good idea. Because we’ve been pretty successful with it since the beginning of General Motors. I think people get it that work there that work on it.
Is there a development dichotomy between fuel economy and performance?
There are a couple of things I know. Fuel prices with either stay the same or go up or go down. I am certain of that. I do know there’s been permanent changes in the way people buy. Some of those are generational and some of those are income based. We save cost using lower displacement engines that can do the same thing as a larger engine and on a lighter car. We can get our operating costs back—that value equation for the customer is much more valuable than electrification by itself on an older architecture. Independent of gas prices or the economy, that value equation never really changes. There will be electrification pieces that will make a lot of sense because there will be people that want 48 miles to the gallon but they want that at a value equation that pays back. And they like driving a hybrid and they like driving something that’s progressive and has less emissions. There are people out there and, generationally, are growing.
How much of a problem is it to get GM’s vehicles selling at higher prices?
Incentives and discount prices are a road to nowhere. Offer people what they are willing to pay for, what they value. It’s what they value. What are they really buying and what are they willing to pay for? Unlocking that for each car is what’s important.
Monday, April 13, 2015
Mark Reuss, Executive Vice President, Global Product Development, Purchasing and Supply Chain, spoke to a group of journalists at the New York Auto Show. The following is from the interview attended by GirlDriver, USA. Over the next few days we will post more of the interview.
GD: Do you think with younger generations, we will see performance end up in a museum?
GD: Do you think with younger generations, we will see performance end up in a museum?
I do not. I really do not. It’s just like the discussion that says millennials don’t want cars because they’re getting their licenses later. That was the party line. Well they don’t have any jobs, they have no money and they can’t afford a car. So they hate cars? They don’t hate cars. They love cars.
GD: They are much more conscious of impact on the environment. Are they going to turn on performance?
You can put a Volt in sport mode and have a blast. That’s performance. We could make a small block hybrid that was really cool and really fast that doesn’t burn hardly any gasoline doing it for a very low cost. I don’t think that would be a bad thing.
GD: Are you going to do that?
I would say the elements are there to create it and have fun. At the end of the day [ vehicles] are an emotional purchase—always. People don’t want to drive around in 20 second, 0-60 power. That stinks. People like performance and I just don’t see that changing. Fun is fun. We’re delivering that today that’s for sure.
GD: How fast are you going to be able to put the product into Cadillac and regenerate the brand?
I think a better question would be when do you think you are going to have the product right to be able to introduce it with high quality and technology that reflects what the brand should be? That’s the way we approach that. I’m not on a timetable to say we’re going to have eight new products in two years and just hang on. We’re trying right now the products we want to do because we can get ahead with our products of where the brand really is. That’s where we sit today and so we have to really have a discussion around what the brand health is when we talk about when we’re going to introduce products because we got to have a brand that can handle the product that’s being introduced.
GD: You’re talking about product and brand image. And part of that was that the reason that Cadillac made the move to New York?
For sure. Johan’s job is not to go and develop an Omega platform for the CT6 Cadillac. That’s my job. Johan’s job is to take and use those products and change the brand perception of Cadillac into a brand that’s high on consideration lists so they give us a real shot at buying our cars.
If we always did what we always did we’re always going to get what we always got. That was doing it out of Detroit. We’ve got to be able to change these things and that’s what we’re doing. We’re giving it a shot. There’s no downside to it, by the way. There’s no downside other than you guys may say well that didn’t work. OK? So we’re going to keep trying.
GD: Is there a product push for them going to be on the crossover side?
I’m not sure that I would say that but it could be. because there are some things that are going to happen at the same time so I’m not sure there is a sequential cadence—we look at our product launch capability across all of General Motors not just Cadillac so I mean what we don’t want to do is have things happening in five places at one time and trying to get our supply base to do it and bring them up at the same time it would be a disaster so I’m pretty careful about that but that said Cadillac’s got a lot of priority. From my people’s standpoint, it is to make it happen with the right timing, the right product with the right quality and performance. That’s where we’re focused.
If you look at our portfolio at Cadillac today it’s got about half the entries that some of our competitors do and that’s a lot and so you look at what they are really doing and where they are successful and some of those are crossovers and some of them are cars that we don’t play in. So here’s a car (CT6) that we need to do well with and I think we will. But then there’s some crossovers beyond SRX that you know are probably pretty attractive for us as well.
Friday, April 10, 2015
GirlDriver, USA at the New York Auto Show
|Alan Batey, General Motors Executive Vice President and President North America|
We talked to Alan Batey about brands and bankruptcy and GM today.
Looking back, was it a good move to close brands? You don’t see more cars by closing brands, right?
Look, we now have four brands in different swim lanes. We don’t have brands sitting on top of each other now in terms of positioning and pricing competing for the same customers. We’re more focused. The strategy makes more sense. To your point around Saturn, there were some critical learnings at Saturn around customer care and we’re really tried to make that part of what we do at Chevrolet. We worked with the Disney Institute about four years ago and that with the learnings from Saturn we brought together as part of the Chevrolet experience. In the latest J.D. Power survey, Chevrolet, Buick and GMC were among the top five brands. We learned a lot from Saturn and we’re really trying to transfer those learnings and drive our attention to other brands.
How does a global company keep on top of so many different types of problems around the world?
You need to leverage a global scale and make sure that your brands are resonating on a global level. But at the same you need to make sure that you have strong organizations who really understand the market and the differences at a local level. So we have five regions of the world. We used to have four but China has become so big we got that as a stand alone region now. Those regions are responsible for the go to market and for the execution of the sales strategy and the building of the brand. What we do at a global level is we lay out the portfolio and the positioning and make sure we’re leveraging our scale but the real work of selling and servicing customers is done at a local level and that provides the right level of balance that we need between local and global we call it GLOCAL abut that’s basically our approach.
The bankruptcy made GM a better company in some ways. Post bankruptcy, what are the big challenges?
What we’ve seen is that the company has grown. Our U.S. business has rebounded. We’re seeing really solid growth. We’re seeing transaction prices increase. We’re seeing our brands slowly start to gain more momentum but its a long term journey. You don’t turn around a brand overnight.
We don’t have so much of a challenge in the U.S. as opportunity. The Malibu is a great example of that. Here’s a segment which is the biggest car segment in the U.S. We’ve clearly been underperforming but we’ve executed an incredibly great car and you know our rallying call around it is larger lighter best in class fuel economy and stunning design. So I think this is a great demonstration of our capability and we’ve got five new vehicle launches this year—at Chevy and you know know its coming on the back of very successful Colorado launch—Colorado midsize segment. We’re growing that segment now. And it is the fastest turning pick up in the U.S. The Trax is a segment that we created with the Buick Encore. We’ve gone fast to market with the Trax. It’s doing really really well so we feel good about our ability to really redefine our future with a really laser like focus on new segments and great products.
People forget is that the U.S. was the only part of GM that went through the bankruptcy The rest of General Motors did not go through bankruptcy and so here we are five years after the U.S. Chapter 11 we’re still restructuring a lot around the world, not through the bankruptcy courts but through our commercial activities.
We’ve seen a lot of growth in China, which has become our second biggest market. What you are also seeing is these markets all need to meet emission requirements which are being governed by different countries. You are no longer able to sell perhaps legacy products that is amortized at lower prices. There’s a big movement underway because we’re going to need affordable, modern technology across the world.
We’re still doing some restructuring in other countries and you know we have challenges like Russia where we’ve had to make a decision that we’re going to somewhat muffle our business there because its losing a lot of money and right now it doesn’t make any sense so we need to slow it down and to conserve cash and see what happens as the economic situation becomes a little bit clearer.
Does anyone at GM believe that social media is going to sell cars?
I believe that social media is the new word of mouth. It’s a powerful medium when it comes to reputation management. You know customers going on line, getting their service rating the dealership that gets five stars or whatever. They go online and they can see instantly what people are saying about them on social media. That’s very important to building that brand, building that reputation and driving retention.
So it’s really it’s really a word of mouth. We had an incident that happened around the World Series whereby in the final game of the world series we were giving away a Colorado to the MVP. The gentleman that was doing that on our behalf who was our zone manager this was late at night as you can imagine across the nation um he’s a big gentleman and they changed the location so he’s down on the pitch side and they wanted to do it in the studio. So he literally has to run. He gets there. The interview—I don’t know if you ever saw it—the interview didn’t go well and he you wouldn’t know whether he was hyperventilating because he was nervous and that’s what most people picked up. Anyway it went really badly. There was this, “Oh my God, did you see that? I can’t believe that just happened.” Then this sympathy thing came in—“Hey you leave the Chevy guy alone. If you ever had to do this can you imagine how nervous he was?”, etc. We have people that monitor this 24-7 so we were able to see it going off. We were able to hashtag Chevy Colorado and tech because he said something like you know the car’s full of technology and stuff so we hash tagged “technology and stuff”. Anyway over a 24-hour period we were the #1 in social media.
It was crazy. But we were able to join the conversation and then we went out with some more traditional ads like print ads that said “Introducing the all new Colorado with all that technology and stuff.” So we joined the discussion and we did it in a way that made us very human and we had our VP of sales go out and say hey just so you know he’s our guy, he’s a fantastic employee. We stand behind him and then we got this whole barrage of “good on Chevy that’s what you need to do is support your employees.” So here’s an example of a social media event. If we’d have just sat it out we would have looked stupid but because we engaged and became part of the discussion we created amazing awareness for Colorado which is our new vehicle. We created a very human touch to our brand and our employees and it was just huge for us. We estimated that in 24-hours it was over $5 million of free media. It allows a two way conversation, social media, rather than us putting out an ad that’s sterile this allows us to talk to our customers.
You can see people that say I had a bad experience and we can now engage those people and turn that into a wow experience. All of a sudden we go in and we say we saw that you posted this. We’d like to help you. Then you can turn it around.
We’ve launched something called Shop Click Drive that blends together the digital world and the bricks and mortar world. We know there are a lot of millennials who don’t feel comfortable transacting in the dealership environment. They feel much more comfortable buying and searching online so what we’ve done with this product is create an environment where in fact you can go through the whole process online and then we introduce you to the bricks and mortar so that you know where you get your vehicle serviced and that part of it.
Our business isn’t transactional. What I mean by that is when we sell a car it’s the start of the relationship. When you buy a tin of beans once you’ve bought it its the end of the relationship until you buy another tin of beans. So we need to make sure that you know it’s the second biggest purchase in people’s lives many people have a trade in. We have to be able to have the ability to accept trade ins and put people into new vehicles. Most people need financing. We have to meet their financing requirements.
What do you think the smartest move GM has made recently and how did sales prove it out?
I would say redefining the mid-size pick up segment that used to be worth a million vehicles a year, dropped down to about a quarter of a million. We looked at all the customer verbatims, the reason customers weren’t in the segment and they said there was no choice. There were only two old vehicles that were available. There’s was old technology, not good fuel economy, no technology in the vehicle so we went in. We introduced the Colorado and Canyon with 4G LTE. We’re going to introduce a diesel engine later this year which will be best in class fuel economy, stunning design and its been a huge home run for us. Colorado is number two in the segment.
Thursday, April 2, 2015
The 2016 Maxima
By Mark West
In his no-nonsense, get-to-the point style Nissan president and CEO Carlos Ghosn introduced Nissan's totally redesigned flagship Maxima, 4-door sports car during a press conference on April 2nd at the 2016 New York International Auto Show. Mr. Ghosn highlighted the many new features of the Maxima, which has fueled more than 30-years of growth in the U.S. market.
The 2016 Maxima is designed and engineered here in America primarily for the U.S. consumer. Mr. Ghosn stressed that the 2016 Maxima is 2.2 inches longer, 1.3 inches lower, and 82 lbs. lighter than the previous model producing an estimated 30 mpg highway driving. Adding its all-new sheet metal structure produces 25 percent more rigidity in the body and "moves the Maxima's performance closer to its bigger brother the Nissan GTR". Mr. Ghosn described the new exterior as sleek and distinctive with front and rear LED lighting, a V-motion front end, deeply sculptured fenders and unique floating roof treatment. Next he explained its exterior cockpit design achieves a fighter jet inspired look that improves its aerodynamics to a low efficiency of drag of 0.295.
The new Maxima's 3.5-liter VQ-series V6 has been redesigned with more than 60 percent new parts (compared to the previous generation 3.5-liter V6). With 300 horsepower, Maxima has a high specific output of 85.7 horsepower/liter. The revised engine helps Maxima achieve an anticipated 15 percent increase in highway fuel economy to an EPA estimated 30 miles per gallon. Complementing the revised power plant is a new, performance-oriented Xtronic transmission featuring a wider ratio range, which allows for stronger acceleration from a standing start and an all-new D-Step shifting logic that provides rapid shifts at high throttle openings.
His description of the Maxima premium leather interior stressed its signature zero gravity front seats, a center stack angle arranged around the driver featuring a racing car V shaped steering wheel. Its new interior offers luxury quietness achieved by its laminated windshield plus BOES Active Noise Cancellation or the driver can with the push of a button let in a little racing noise sound of the engine. Mr. Ghosn is confident the 2016 Maxima has the finest interior in its class.
Mr. Ghosn said the new 2016 Maxima will challenge cars costing thousands of more, is the sportiest most powerful Maxima ever. The SR model offers high performance tires and panel shifters. Its 3.5 V-6 liter engine produces 300 hp with 61% new parts it is essentially a new engine. Like the GTR the Maxima uses sodium filled valves reducing weight and quickens response to produce greater performance and increase fuel efficiency.
Maxima's new 2016 model is infused with greater safety and security features adding its new Driver Attention Alert System to its already existing Forward Breaking system and its Blind Spot Warning system. With Mr. Ghosn's concise and direct presentation of the 2016 Maxima he said it is set to arrive in U.S. showrooms this June with a starting M.S.R.P. of $32,410.