GM President Mark Reuss Sees Racing As A Key To Success
One of the things that is most impressive about General Motors Co. President Mark Reuss is how even-keeled he is, even when facing tough questions from the press. So it is all the more striking how his demeanor changes when he starts talking about the Indianapolis 500. His business-like tone gets tinged with excitement, and for a moment, childlike exuberance breaks through the grown-up seriousness he usually exudes.
“The hair on the back of my neck still stands up, just like it did in turn one with my dad in the first Indy 500 that I went to,” Reuss says.
Annual pilgrimages with his father to the Indianapolis Motor Speedway started when he was a kid. Reuss remembers being able to tell Buick stock blocks from Ford Cosworths just by the sound the race cars made as they whizzed by.
“I mean, honestly, the reason I’m in the car business is my early trips here with my dad,” he says, while taking a lunch break in the cool comfort of Chevrolet’s suite on the upper level of the main paddock at the Indianapolis Motor Speedway. The large room has an expansive glass wall overlooking the 2.5-mile track’s front straight. It offers a great vantage point, but soon he’ll head back into the sun to sit in the sweltering stands. His deep tan shows that’s where he’s been all morning.
Now Reuss brings his own teenage son to the most famous race in North America. And this year he has brought Chevrolet too, in its ballyhooed return to the Indy Racing League after a six-year absence.
He is thrilled. Not just about the Indy 500, or the fact that now fans can hear 2.2-liter twin-turbo Chevy engines zooming by, but about the upcoming races, especially the Detroit Chevrolet Belle Isle Grand Prix that runs this weekend. And about what Chevy’s presence at these events signifies.
Chevrolet probably wouldn’t even be at the Indy 500 if not for Reuss. When he became president of GM a couple of years ago, he immediately brought together a handful of people to better integrate motor sports into the overall business. Returning to IndyCar was a key part of the plan, not only for GM’s sake, but for the sport itself. The series had been withering as corporate backers and fans abandoned it. Honda was the sole manufacturer offering engines for the series at the time.
“I said, ‘I want to go back to Indy; there’s one engine there, the sport’s in real trouble, let’s go do it,’” Reuss says.
But it wasn’t passion alone that fueled the move. Ultimately, getting back into Indy racing would help GM build better passenger vehicles, provide a platform to sell more of them, and bolster the brand—a three-pronged strategy.
The move reflects a sea change at GM that integrates engineering, marketing and sales divisions under common leadership instead of running them separately as they had been for years. “It was not a good business model,” Reuss says. “So one of the first things I did when I came into this job was get Jim Campbell and put him in the job of vice president of performance vehicles and motor sports.”
The two had a similar vision for how things should run at GM, and within four months a team was in place. Now designers, engineers and marketers go to the same meetings, allowing them all to be in sync, Reuss says. “I’m not sure this has been done in my career.”
Chevrolet’s return to IndyCar competition also shows how motor sports will play a bigger role in helping create better, more fuel-efficient cars and trucks for the road. The engineers that work on road cars will get cycled through the motor sports division and take the expertise they gain on the track back to the consumer side. “A good example of that is Chris Berube,” Reuss says. Berube was the lead development engineer on the Cadillac ATS and CTS-V. “Chris is now our IndyCar engineer. Think about that for a minute,” Reuss says.
It’s hard to imagine how technology that enables race cars to go 220 mph on a track could be relevant to the average street car, especially as Corporate Average Fuel Economy standards get tougher. But Reuss made sure it would with the help of a few key people—namely, Roger Penske, one of the most influential figures in the auto industry and owner of Penske Corp. and Penske Racing.
“A few years ago, when Roger and I sat in my office and constructed this engine program together, we went through and described what we thought the vision of the series and the engine in this series ought to represent for the next five or 10 years,” Reuss says.
That vision is what you see and hear today in the new generation of Indy cars, which were completely revamped for the 2012 season. They have smaller engines with six cylinders instead of eight.
They are also turbocharged now and use technology that injects fuel directly into the engine’s cylinder heads for better combustion efficiency—technology that’s called, appropriately enough, direct injection. Both are increasingly used on the consumer side. The Chevrolet Sonic, for example, has a turbo-charged four-cylinder engine and the Equinox uses direct injection.
“For IndyCar, the adage of racing improves the breed is probably more true than it is for Nascar,” says Brian Johnson, an equity analyst with Barclays Capital. That’s because Nascar still uses V8 engines, whereas the downsized turbocharged engines with direct injection used in IndyCar racing mimic the types of high-efficiency powertrains that automakers must increasingly adopt to keep pace with more stringent Corporate Average Fuel Economy standards in the future, Johnson says.
Next season, GM engineers will be tinkering with even more technology on IndyCars as teams will be able to develop their own aerodynamic bodywork for the race cars (this year all of them were required to have the same aero kit). “So the GM wind tunnels will actually be used when we do the aero packages for this,” Reuss says. “The chassis dynamics, the simulation, all of those things will be highly, highly integrated.” And eventually, all of that know-how will get poured back into passenger vehicles.
But tech transfer is only one-third of the three-pronged approach the company is taking to maximize its investment in Indy racing. The second component is to use races, quite literally, as a platform to sell more cars. Thirty percent of the leads Chevrolet generates through all of its promotional events come from motor sports; and of those, 52 percent turn into sales, according to Chevrolet. “So it’s a really productive platform for us,” Campbell says.
A huge Chevrolet display dominates the Indianapolis Motor Speedway’s infield. It’s exponentially larger than those from other corporate sponsors such as Firestone, which provides tires for the series. Chevy Impalas and Malibus sit beneath towering arches, on display next to Corvette pace cars with star-spangled paint schemes. Guys in baseball caps and muscle shirts crane their necks and lean low to inspect the small-block V8 in the engine bay of a Camaro ZL1.
Several clusters of people pore over a bright red Chevy Sonic, all of its doors open, as if arms outstretched to welcome everyone. Joe Cimolik, who’s about to turn 16, sits in the driver’s seat. A Chevy rep next to him in the passenger seat explains the car’s features.
Joe steps out and stands back to take the whole car in. When his mother Cindy approaches, he plays up the fact that it gets good gas mileage. “Your sister would kill me if we got you a new car,” Cindy says, in response to his enthusiasm. Joe says he’d be happy with a used Cobalt.
The mother and son came all the way from Virginia Beach to watch the race. It’s Cindy’s 20th time at the Indy 500 and Joe’s third. I ask them if they think it matters whether companies like Chevrolet race cars. “Oh yes,” Cindy says. “It shows the performance of the engines, how they hold up under extreme conditions.”
And that is the third reason Chevy is back to racing Indy cars: it builds the brand. “When you win big races, when you beat a Ferrari, a Porsche, a BMW, you basically build the image; you can build the image quickly,” Campbell says.
In that regard, Chevrolet has been doing well. Of the five races so far this season, Team Penske, powered by Chevy, has won four. Honda-powered Ganassi Racing took the top two spots at the Indy 500, while Chevy-powered teams rounded out the top five.
The race this Sunday on Bell Isle in Detroit means almost as much to Reuss as the Indy 500. It is a track that both he and Penske fought to get back into the series after it had been excluded in previous years.
“After coming to these races and then wanting to go to work in the auto industry because of these races, I’ve been waiting for two years for these two weekends,” Reuss says. “These weekends are the turning point, emotionally, for me in my career. To take the cars and the teams to Detroit next weekend and have Chevrolet win in Detroit would be my dream.” Forbes.com