General Motors North America president Mark Reuss looked tired on the first morning of Detroit's North American International Auto Show (NAIAS) press days. His face showed the weight of heavy responsibilities as president of post-bankruptcy General Motors' U.S. operations. During a small group press conference, he also showed little tolerance for dumb questions.
Q: How important is Chevy Volt to GM?
A: It's very important in the market and to our customers, and it's great for everyone who worked on it. But it's not the only thing that's important. In this business it's, "What have you done for me today?" It's a long-lead business that can flip bad, and quickly. You take what you know today and try to project where customers are going to be, then decide how you're going to win. We cannot return to some of the things we did in the past, period.
From a product standpoint, the soul of the company has to be things like the Volt – high desirability, technical leadership, breakthrough technology in some cases. I don't want to do things that are "competitive" any more, in product or in service. We're going to do it best, or we're not going to do it.
(This post continues after the jump.)
Q: Given Volt's multiple Car of the Year awards, how do you balance journalist kudos vs. market realities?
A: We have a mix of people who worked on the Volt who are extremely talented, from power electronics and calibration, to assembly, to creating a battery pack that will be built in Michigan. When you do something like that and get some validation from the motoring press, that's a good thing.
GM before bankruptcy was a structural cost-based company with a lot of structural cost. Now we have worked extremely hard on reducing structural cost and have become a revenue-based company. When you do that, a whole different mindset begins to happen in the company. We've still got a lot of work to do, but people can see and taste success with something like the Volt, which no one else has, that addresses a whole different set of customer needs.
Q: Where will Volt technology go next?
A: I would say to take that technology and get the maximum out of it. You don't know what you don't know when you design it the first time. Now we can begin to take a lot more mass and money out of it and create the next hyper-efficient Voltec drivetrain. When you do that, mass begets mass, and the mass of the battery pack and what you're asking it to do become less. You get efficiencies out of both the car and the battery without asking for a complete breakthrough in battery technology. That's the technical answer.
If you're asking on a portfolio basis, we want to take this technology and do other things with it, so we're looking at how and where to do that."
Q: Given the painfully slow production ramp-up of Volt, what is preventing GM from building more of them sooner?
A: We're building it at a very low rate to begin with, and we're doing that on purpose. When you do something like this that's breakthrough, quality is extremely important. We do not want to risk screwing it up. One technical reason – there are over 260 cells in that battery pack, and lithium-ion is not something to be taken lightly when you bring it to production. We want the production process and the stability of that to be perfect, and we are going to be perfect with it. Chasing volume would be irresponsible.
Q: What if gas goes back to $4-5 a gallon?
A: Hopefully, we're in a better position than most. If you look at what we're introducing today [including the Chevrolet Sonic subcompact and the 37-mpg Buick LaCrosse eAssist], we have some great stories here. But I think it's more helpful to look at what our electrification strategy needs to be, which you'll see across the industry. You'll see electric cars as well as the eAssist energy storage approach with a battery and a 4-cylinder engine and a little electric motor that does something between full-blown hybrids and a Volt. You'll see different cost scenarios of electrification and energy storage that produce very high fuel economy.
I don't think there will be a digital change when gas prices go up. There will be all sorts of things, and GM will be very well prepared. In reality, regulation will dictate what we do. We'll have to plan our portfolio to be there from greenhouse gas and fuel economy standpoints.
Q: There seems to be a gap opening up between CAFE standards and what people are asking for in the marketplace. How does General Motors play that?
A: We'll do it all, but not all of it all the time for every brand. We'll do a mix of things that will offer the customer choices. We won't put eAssist on every LaCrosse, for example, but if we need to go up on eAssist because gas is at $4 or $5, we can do that.
Q: How much of what you're doing in small cars and electrification is being driven by regulation against market demand?
A: I don't think there's that big a gap between the regulatory direction and the customer. If you have gas prices increasing, with the economy in the state it's been in and people either out of work or worried about keeping their jobs, that puts pressure on them to buy a new car because its operating costs are much lower."
We'll have people who won't buy the first Volt but may buy or lease the second generation because it costs just $1.50 a day to run. You'll see people go to a mild hybrid system such as eAssist, with energy storage paired with a gas engine, to increase their fuel economy without downsizing the package. We'll have to pick these blends and the right places to do them, and we'll be prepared for people to simply downsize.
Q: How will GM meet not just the CAFE numbers on the books today through 2016 but potentially the insanely high numbers being talked about beyond that, and keep vehicles affordable?
A: I would have to show you our complete product and technology plan, which I can't do. But we will comply, and we'll be profitable doing it.
Great positive attitude. But we'll believe that one when we see it.
Award-winning automotive writer Gary Witzenburg has been writing about automobiles, auto people and the auto industry for 21 years. A former auto engineer, race driver and advanced technology vehicle development manager, his work has appeared in a wide variety of national magazines including The Robb Report, Playboy, Popular Mechanics, Car and Driver, Road & Track, Motor Trend, Autoweek and Automobile Quarterly and has authored eight automotive books. He is currently contributing regularly to Kelley Blue Book (www.kbb.com), AutoMedia.com, Ward's Auto World and Motor Trend's Truck Trend and is a North American Car and Truck of the Year juror.