GM’s Reuss Touts New Impala, Better Ordering System

During a Q&A at the New York auto show, the president of GM’s North American unit discusses new products, dealer relations, matching supply to demand, his career and what might have happened if the federal government hadn’t rescued GM.

Steve Finlay, Senior Editor

April 12, 2012

5 Min Read
Mark Reuss says turnandearn allocations work well
Mark Reuss says turn-and-earn allocations work well.

NEW YORK – Mark Reuss always wanted to work for General Motors.

It’s something of a family thing: His father, Lloyd Reuss, was with the auto maker 36 years, retiring as president. The son, with GM 26 years now, is president of its North America unit.

At the New York International Auto Show, Mark Reuss discusses new products such as the all-new ’14 Chevrolet Impala fullsize sedan, dealer relations, matching supply to demand, his career and what might have happened if the federal government hadn’t rescued GM. Here’s an edited version.

WardsAuto: What’s most important for GM at this auto show?

Reuss: There’s the Impala. I’ve been waiting to introduce it for a while. It’s spectacular. It’s a sedan we haven’t had for a long, long time; the safety, the fuel economy, the size, spectacular design, all that stuff. It’s done to perfection.

Then I’m really excited Cadillac won J.D. Power & Associates’ most-improved award on customer-satisfaction and was No.1 in sales and service satisfaction. Our goal is to get all our brands on the top tier of that in two years. So we’re on our way to something that will pay dividends.

WardsAuto: How did GM come so far in such a short time? You mention the big Impala. But then there are the Chevy Cruze and Sonic, small cars getting good reviews.

Reuss: We focused on this when I was in engineering. We developed our global platforms for, among other things, fuel economy and efficiency. We hadn’t done platforms like that. Ever. We really put the resources to those.

WardsAuto: So a lot comes down to platforms?

Reuss: Platforms, and we developed our calibration skills. We now have a 1.4L turbo. With that engine and a 6-speed manual transmission, the Cruze gets 42 mpg (5.6L/100 km). It is a huge achievement to get that kind of fuel economy from a conventional gasoline engine in a car bigger than most cars in the compact segment.

That is because of integration. It’s not one component, one motor compartment, one transmission; it’s all of that together. The result is a car that is fun to drive and fuel efficient. We really upped our game.

WardsAuto: You started with GM in 1986, so you are a GM lifer?

Reuss: I am. I didn’t go to GMI (General Motors Institute, now Kettering University) or all that stuff. I came out of college (undergraduate, Vanderbilt; postgraduate, Duke) and worked in the noise labs and at the proving grounds.

WardsAuto: You always wanted to be a car guy?

Reuss: Yeah. I went to business school and interviewed with some other companies like Procter and Gamble and Wall Street firms, but I took a smaller salary to work for GM. I always wanted to do that.

WardsAuto: Why is this show important for GM?

Reuss: We’ve got five new products we’re introducing: the all-new Impala, Buick Enclave, Chevrolet Traverse, GMC Terrain Denali and Cadillac SRX. Some huge introductions.

WardsAuto: Why is the New York show important?

Reuss: This is a centroid of our dealer bodies. We used to own this area from a dealer-performance standpoint. Today, we’ve got some good dealers having a tough go of it. So we need to help them with the right places, facilities and locations.

New York is an important market for us. It is high density with lots of volume. But our dealer footprint here is old, and we closed a point in Harlem last year. So we’ve got work to do to make sure dealers have all the things they need to succeed.

I’ll talk to the dealers at a reception here. I’ll pump them up and give them a look at new product.

The show is important because it is still the center of the universe for media. So we can get our story out here pretty effectively. Also, there are lots of opportunities to see what our competition is doing.    

WardsAuto: As an engineer, how difficult is it to talk to dealers?

Reuss: I have a really good relationship with our dealers. We have what is called a 1-dealer program for each of us in the central office. We assign ourselves a dealer, visit them once a month and remove roadblocks or difficulties they have. I go to one in metro Detroit. We sit down and review what we could be doing better.

WardsAuto: Explain how your “turn-and-earn” dealer-inventory allocation program works.

Reuss: We’ve moved our whole distribution-production system to a complete turn and earn. If you sell, say, 10 Malibus, you get allocated the chance for 10 Malibus the next month. You can take them or not, but you’ve got the allocation because you can sell them.

When we do a new model, we say, “How much do you think you need?’And then dealers sell off that. It is a good way to match supply to demand and production to allocation.

WardsAuto: The auto industry and GM in particular have become better at matching production to demand. What’s the secret sauce?

Reuss: Turn-and-earn is one of them. The other is that we look at distribution twice a month now. It’s a very short cycle of how the market is going, so it is very agile. We don’t overproduce, period. I schedule cars every 60 days. We look at where the demand is and set our factory schedule to that.

WardsAuto: How do you respond to people who say GM shouldn’t have received government financial aid in the dark days of 2008 and 2009?                             

Reuss: Everyone has their opinion. Our goal is to lead the industry again. We’ve already paid back the equity and cash. We want something that is financially good for taxpayers. I’m a taxpayer, by the way.

WardsAuto: Where would GM be without that government assistance?

Reuss: There was no one else who would provide the funding, so presumably we would have been liquidated. The supply base that supplies us would have been liquidated.

As a result, other auto companies with the same suppliers would have either gone into bankruptcy or liquidation, because you have to have a supply base to make cars. That is what a lot of people think would have happened, not just me.

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