FastLane

By Beth Lowery
GM Vice President, Environment, Energy & Safety Policy

Last week, I had the opportunity to speak with hundreds of environmental professionals who were in Detroit to attend the Air and Waste Management Association’s annual conference and exhibition.

I gave a formal speech, but the best part of the morning for me was the question and answer session that followed. I’d like to share some of the questions that were posed, along with my answers, and invite you to ask questions of your own about GM’s efforts to reinvent ourselves as a greener company.

Electric vehicles have high up-front capital requirements. How are you going to make electric vehicles like the Chevy Volt profitably?

Introducing advanced technology is always expensive initially, especially in the early generations. It’s important to have the right incentives for customers, such as federal tax credits. Future generations of the technology will be less expensive, making it possible for us to turn a profit.

Does GM have plans to move beyond motor vehicles?

We actually entered the hybrid market with a two-mode hybrid system that was first developed for buses. From a macro level, we’re looking at transportation systems globally, but our main focus today is on getting personal transportation - cars and trucks - right.

How are you going to get people back into American cars - how do you convince them that American cars are reliable?

We know that people’s perceptions of the quality and reliability of our vehicles do not match reality. When people get behind the wheel of our cars and drive them, they have a totally different opinion. We are focused on quality, fuel economy and great design, and we are asking customers to judge us for what we are today, not what we were years ago. The award-winning Chevy Malibu - which continues to be very popular with consumers - is proof that we can win in today’s market. We think objective data - such as J.D. Power and Associates naming Buick the most dependable brand this year (tied with Jaguar) - will also help convince people.

It seems that the U.S. now depends more heavily on the financial sector for a greater percentage of our Gross National Product (GNP). As a manufacturer, how do you compete?

We see a real need for a comprehensive manufacturing policy in the U.S. Our philosophy has been to manufacture where we sell. GM strongly supports building products here in the U.S.

Not all of the components that go into GM’s cars are made in the U.S. How will you rectify that?

There are labeling requirements and we identify the percentage of U.S. content in our cars and trucks. That being said, we are a global company and we operate a global purchasing system. We buy the best available components that we believe will make our products the best.

What is GM doing to help educate the next generation of U.S. engineers?

This is a critically important issue, and we have a number of initiatives under way. We have programs that target students in kindergarten through grade 12 to educate them about what the vehicles of the future will be like through publications like the Weekly Reader. We also have programs for college students, like the EcoCAR Challenge, which is done in partnership with many, such as the U.S. Department of Energy and Natural Resources Canada. Teams of students from more than a dozen universities in the U.S. and Canada are competing to convert a Saturn Vue into a zero-emission vehicle that consumers can afford to buy. We provide the teams with production vehicles and parts, seed money, technical mentoring and operational support throughout the three-year program. And we have been fortunate to recruit some of our talented engineers from this program.

By Rick Spina
North American Vice President, Quality

Today’s quality announcement by J.D. Power and Associates suggest it’s time for perception to sling-shot its way into reality when people think about General Motors — especially when it comes to quality. When I hear or read disparaging remarks about GM vehicle quality, I get rattled because more often than not, the comments are not true.

For all the naysayers out there … get this … in the J.D. Power & Associates 2009 Initial Quality Study, Cadillac, our flagship brand, improved by 19 percent since last year’s study and comes in third, just behind Lexus and Porsche. That’s pretty darn good considering brands typically improve around 5 percent a year. And Chevy, our volume leader, eliminates the quality gap to join company with very competitive import brands like Honda and Toyota. Simply put, the quality gap is history.

Thirteen GM models placed in the top three of their segments, one less than Toyota. Two of our plants earned the Silver (Oshawa Car) and Bronze (Bowling Green, KY) quality awards. In fact, seven of the top ten plants in North America are GM plants, which is a true testament of our manufacturing capability.

There are many third-party studies that report on vehicle quality and they all use various methodologies to gather data. We pay close attention to this particular study because it represents the voice of our customers. We listen carefully to what they say about their vehicle ownership experience. Their input is translated into engineering requirements, or specifications if you will, and incorporated into our continuous improvement initiatives.

We’ve been working on improvements for a long time, we’re getting good results in many areas and admittedly we have work to do in others. I can assure you, though, quality is integral to everything we do. Quality doesn’t just happen, it is deliberately planned early in the design phase of vehicle development where aggressive targets are set for every phase of development, including vehicle assembly in our plants. Numerous quality check points, or ‘valves’ as we call them, allow for thorough reviews to make sure customer needs and expectations will be met. Of course, there are hundreds of validation tests of parts and components along the way to make sure that, when all the parts come together on the assembly line, our vehicles will not only look appealing but will last over the long haul.

Getting it right by our customers’ standards drives the entire development process. By all of our internal measures, we’re getting the job done. And, our customers confirm that in the Initial Quality Study. But don’t take my word for it, check out J.D. Power’s news release and see for yourself. And if you don’t believe our customers, go to a dealership and try out our cars and trucks … then let me know what you think.

Please join Vice President of Quality for GM North America Rick Spina on Monday, June 22 at 2:00 p.m. Eastern Time for a one-hour live chat to discuss quality and GM’s results in J.D. Power and Associates’ 2009 Initial Quality Study.

Looking forward to hearing from you. - Janine Fruehan, Communications Manager, Product Quality & Safety

(Note: While we can’t address specific customer concerns in this chat, resolving them is very important to us. If you have any questions or concerns about a specific GM vehicle you can reach us 7 days a week, 24 hours a day, by calling the appropriate Customer Assistance Center telephone number. Buick: 1.800.521.7300, Cadillac: 1.800.458.8006, Chevy: 1.800.222.1020, GMC: 1.800.462.8782, Hummer: 1.866.486.6376, Pontiac: 1.800.762.2737, Saab: 1.800.955.9007, Saturn: 1.800.553.6000)

Please join Troy Clarke, GM North America President, right here on FastLane this Friday, June 19 at 10 a.m. Eastern Time for a one-hour live chat to address questions about GM. He will take as many questions as he can. Looking forward to hearing from you. – Tom Pyden,VP, GM North America Communications

Chevrolet Volt vs. Other Battery- and Hybrid-Electrics:

A lot of folks asked about the Chevrolet Volt.

We call the Volt a no-compromise electric vehicle because it gives you the ability to save gas and reduce emissions without sacrificing performance, size, features or range. With the Volt, there isn’t the “range anxiety” you can have with a pure electric vehicle. In fact, with a full battery and full tank of fuel, you can drive the Volt more than 300 miles - up to 40 of them in pure electric mode. Beyond that, the engine generator kicks-in and produces electricity to extend the Volt’s range to more than 300 miles. To keep going, you simply refuel the Volt the way you would a traditional car, which is something you can’t do with a pure electric vehicle. Of course, you can also plug-in and recharge the Volt’s battery at any point to get up to another 40 miles gasoline-free.

As to whether 40-miles of pure-electric range is enough, consider that nearly 80 percent of Americans commute less than 40 miles per day, which means they could own a Volt and drive gas- and emissions-free all the time. If you want a bigger pure-electric range, you’ll need a bigger battery - and a more expensive car, because for electric vehicles, the battery is the most expensive component.

Also, remember that the Volt isn’t like a typical hybrid. The Volt has an electric drivetrain with an engine generator that sustains the battery charge when the battery is depleted, so it still drives electrically even when the engine is running. Most other hybrids have both engines and batteries that power the wheels - basically, a mechanical drivetrain with an electric assist.

Hydrogen:

Several of you asked questions about our hydrogen fuel cell strategy, and if we still plan on bringing hydrogen-powered vehicles to the consumer market.

We still think hydrogen is a key to solving the nation’s mid-to-long term issues with energy security, reliance on petroleum and greenhouse gas emissions. We’ve logged more than 750,000 miles with Project Driveway, the industry’s largest demo fleet of more than 100 hydrogen-powered Chevrolet Equinoxes. Through Project Driveway, we’ve already made improvements to the vehicle’s regenerative braking system, which is also used on the current Chevy Tahoe and GMC Yukon two-mode hybrids. Fuel cells have several hundred repeating elements that need to be thermally managed, and we’re also applying that thermal design knowledge to the Chevy Volt battery design.

Just last week, we participated in the Hydrogen Road Tour, driving a hydrogen fuel cell Chevy Equinox on a 1,700 mile road trip along the west coast of the U.S. and Canada. Along the way we had the chance to stop in 28 cities, inviting people to take test drives of the vehicle and answering questions about the future viability of hydrogen. Activities like these provide valuable insights into the future development of hydrogen technology, and we recognize that we need to stay on the cutting edge of this in order to remain competitive in the future.

There are still many hurdles to overcome before hydrogen-powered vehicles can become widely available to the masses, such as the lack of a comprehensive hydrogen infrastructure and the current high cost for the fuel cells. But we are working through these and other issues with industry, government and fuel providers. In the near term, we’re aggressively developing extended-range electric, plug-in hybrid, hybrid and flex-fuel capable vehicles, since they offer the best chance to immediately reduce our dependence on petroleum-based fuels.

General Motors President and CEO Fritz Henderson will host a media Webchat right here on Fastlane next Tuesday, June 16, from 2 to 2:45 p.m. EDT to answer reporters’ questions about GM’s reinvention and other activities.

Immediately following the Webchat, Henderson will respond to consumer questions via Twitter from 2:45 – 3:15 p.m., from the @gmblogs account Looking forward to hearing from you. - Christopher Barger, Director Social Media

Last week as we finished our chat session here on FastLane, I promised to follow up on some of the questions we didn’t get to during the chat. There’s been a lot happening this week, so it took a little longer than I’d wanted — but here’s a few answers to start with. We’ll get to some more as much as time allows. Thanks for your patience! — Fritz

GM Culture:

I’d like to dig a little deeper into the question of culture. Of all the things that people believe will hold us back, our “culture” is mentioned most.

GM must work through the chapter 11 process to become leaner, more competitive and profitable once again. That means painful cuts in manufacturing facilities, employees, dealers, brands and models. These are tough but necessary steps that we have to take. They’re also just the start of what we ultimately have to do.

For the past several years, our senior managers have been spending an enormous amount of time working to solve structural problems that have been decades in the making. As difficult and unwanted as chapter 11 is, the good news is that it will allow us to significantly strengthen our balance sheet, giving us the freedom to focus on our customers, on new products and technology, and on new ways of doing business.

We can’t just be a smaller GM; we need to be a different GM, too. When Bob Lutz returned to the company to overhaul our Global Product Development organization, he began asking, “Says Who?” That turned our Product Development team upside-down, and suddenly, Design was once again a huge driver in decision making. Take the Chevy Malibu as an example. The differences in design and materials between the interiors of the previous two generations of Malibus were iterative and incremental. This was the old GM at work. Look inside a 2009 Malibu and you’ll see it is an entirely different effort. Going forward, we need to instill that kind of thinking in everything we do.

I’m stressing four things at GM: most importantly, products and customers need to be the focus of our working lives; two, we need to take individual accountability for results; three, speed is non-negotiable; and four - maybe the toughest area to change at GM - we have to encourage greater risk-taking.

Risk aversion stems in part from 75 years of being the biggest automaker in the world. By playing “not to lose,” we sometimes lost our way. We’re changing that right now. In fact, I feel so strongly that our culture needs attention that I have formed a team to further define, quickly, the behaviors that underlie these four priorities. I’ll let you know how that work evolves, and how and when we might be able to use your input.

Small Car/Cruze:

Chat participants asked several questions about our small-car strategy. If you haven’t heard, next year we’ll roll out an all-new compact that will surprise most customers with its terrific fuel efficiency (approaching 40 mpg highway), appealing interior design and spacious five-passenger cabin. This new car, our Chevrolet Cruze, will feature a small but very powerful 1.4 liter direct-injection turbo-charged gasoline engine in an attractive and affordable package. Now, we recognize that small-car buyers have long held Asian imports to be best-in-class in this segment, and we know that simply fielding a competitive car won’t cut it. That’s why we’re out to beat the competition. In fact, with fewer makes and models, every new GM car needs to be an absolute standout in its class. Early reaction to the exterior and interior design of the Cruze at the Paris Motor Show was very good. Take a look for yourself, and let us know what you think.

Please join Ed Peper, GM North America Vice President, Chevrolet, right here on FastLane on Wednesday, June 10 at 3:00 p.m. Eastern Time for a one-hour live chat to address questions about the present and future of Chevrolet.

Looking forward to hearing from you. - Adam Denison, Assistant Manager,Chevrolet Communications

By Ed Peper
Vice President, Chevrolet

This blog posting is more than one telling you about our latest product offering at Chevrolet, the 2010 Equinox. This is evidence that we’re here to stay - and that our products are stronger than ever and better than the competition. And it’s a harbinger of things to come for Chevrolet.

The last few years have been strong for the bowtie brand. We’ve been launching great products that have jumped to the upper echelons of their respective segments - and quickly. In 2007, we started with the Silverado. We followed with the Malibu - then Tahoe Hybrid - then Traverse - then Camaro … and now, Equinox.

We’re holding a drive event here in the Detroit area this week for the sole purpose of getting the word out on the new Equinox. I’m really pumped up for this one, and here’s why: the compact crossover segment is one of the hottest in the industry, and the 2010 Equinox is quite simply the best one out there.

The number one reason for purchase in this segment is fuel economy - Equinox delivers with a segment-best 32 MPG highway fuel economy. That’s far better than the Honda CRV and Toyota RAV4 - and even better than the Ford Escape Hybrid model.

And take a look at this vehicle - while style is admittedly subjective in nature, we think the Equinox is stylish and attractive while staying true to the Chevy brand. I encourage you to compare its looks to the RAV4 or the CRV or the Escape. You decide.

Equinox will also offer customers a bunch of unexpected available features such as a power programmable liftgate; rear vision camera; independent rear seat video screens; a 40GB hard drive which can be used for audio storage and playback, live audio pause and resume functionality; and a standard sliding rear seat.

And we think the ride experience will be another win when compared to our competition.

I’m confident we’ve got a huge hit on our hands. Check out the Equinox Web site for more info - and better yet, check out the 2010 Equinox yourself and make your own decision.

(Editor’s Note: Please join Ed Peper here on FastLane tomorrow, June 10, at 3 p.m. (Eastern Time) for a Webchat. Ed will spend an hour online answering your question about the Chevrolet brand. Stay tuned here on FastLane for more details about the Webchat. - Will Stewart, blog editor)

By Fritz Henderson
President and CEO

Thanks to our FastLane readers for your comments on my post yesterday. I’ve reviewed the comments as they’ve come in and added my thoughts. I haven’t answered them all, but will do my best to keep the information coming.

“Mr. Henderson, After your announcement that Pontiac would be no more, and that there weren’t any more Pontiac G8’s coming from Australia, I put my money where my mouth is and purchased a 2009 Pontiac G8 GT (driving to MI from WI to get the color and options I wanted). I have owned nothing but GM cars for the nearly 30 years I have been driving. The G8 GT represents the best GM vehicle I have ever owned. In just over three weeks of ownership I have 2700 miles on the car - I just can’t stop driving it. What an indictment of old GM that they had a vehicle so fantastic, and they could not find a way to market or sell it/make it a success.

I know you have also stated that the G8 won’t be rebadged as another manufacturer’s car (i.e. a Chevrolet). Might I ask you to reconsider. Find a way to take Holden’s next-generation VE platform vehicle, call it the new Chevy Impala, build it at Oshawa alongside the Camaro, and keep the people like me happy.

No economical RWD sedans = no more new GM purchases for me (sorry, a starting-at-$37K CTS isn’t in my price range new). I recognize the problems the new CAFE regulations will present, but there is still a several year window of time to sell a ton of these vehicles (including police/taxi fleets who will have fewer choices when Ford discontinues the elderly Crown Vic/Grand Marquis/Town Car platform). I know fleet ain’t great, but I think you’d sell a ton of these to regular folks, too (what’s the fleet penetration of the current long-in-the-tooth Impala?). Build these on the Flex line at Oshawa, with a mix of models like Holden does (V6, V8, lux, sport, et. al.) and you’ll have a winner on your hands. The platform is simply too good to ignore, going forward. To do so would be incredibly foolish.” -Robert Hammen

Robert, I appreciate your comment. Certainly, the G8 is going to be one of the Pontiacs we’ll miss. But, we haven’t closed the door on RWD now or in the future. You point out both the Camaro, which is definitely in the mainstream price range of today’s cars, and the CTS, which is an amazing value in the luxury sport segment. As we map out our future vehicle needs, if we can find the right opportunity and price point to do a world-class RWD car, you can bet we’ll consider it.

“I never thought that I will become a venture capital for a car company. Well, now that I own 60% of the company, let me see if I can shape the company. For the starter, please make sure to take care of the remaining brands. Since you are no longer a volume company, don’t release any product if you are not 100% proud and satisfied with it. When I drive a GM car, I want to project being a driver who has made a smart choice. I don’t particularly follow all of the Consumer Report recommendations, but I like to see GM cars prominently recommended in this magazine. I would like to see all GM executives, designers and developers drive a competitor car. Ideally, each should have at least one GM car and another car from a competitor. This way, you are all exposed to strengths and weaknesses of the choices that people have in the market. This rule of course should not apply to your relatives and children. They all must drive GM cars! Do not make any promise to any worker for things that is out of your control. You do not know what will happen 20 years from now. So, take care of your workers while they work at GM, but don’t take any commitment for the years after they leave the company. That is the responsibility of the government that has taxing authority. You don’t (maybe you will!) By the way, I would like to get my money back with profits. Therefore, please work hard and smart from now on. Thank you.” -Alex

Alex, I share your passion for taking care of our brands and ensuring that every car and truck GM launches be a winner in the marketplace. We are fully committed to ensuring that all our customers are proud to own our products, and to be associated with General Motors. While we don’t have a policy that our executives and product development team members own a competitors’ vehicle, we participate in competitive drives and clinics to do just you say — better understand their strengths and to learn from what they are doing to win customers. We are fully committed to working fast, working smart and rededicating ourselves to our customers to reinvent GM.

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