General Motors at Warren Tech Center on Tuesday said that it will drastically streamline its global operations in order to allow for smoother operations.
While it has shed jobs, brands and debt during bankruptcy, GM’s executives admit the Detroit based automaker continues to have an inefficient manufacturing network, weak supplier relations and too many variations in the types of engines and vehicle underpinnings it uses to build cars and trucks globally.
It used 30 platforms worldwide in 2010 and plans to cut that to about 14. It will take the about 20 engines it used in 2009 down to about 10.
GM expects the overhauled approach to development and production will save the company around $1 billion, each year, in what it calls ‘churn’ – cancelled, changed or relocated projects.
Additionally, the General wants to make sure that they rid themselves from as much debt and liabilities as possible. Part of this process includes reworking the Detroit manufacturer’s pension plan, which is currently underfunded.
“All of the things we need to do are, by and large, in our control,” Ammann told analysts at GM’s second annual global business conference. “We’re not relying on heroic market share gains.
Building on global platforms in order to cut costs and share common parts is a strategy used in greater frequency by all automakers. For example, GM’s cross-town rival Ford Motor Co has been successful using this strategy on launches of compact and subcompact cars in the past year. 44
In addition, GM believes it can decrease by 25% the number of engineers it has working on non-vehicle projects. The automaker would instead assign those engineers to essential work, global product chief Mary Barra said.
GM also said it will start building Cadillacs “in volume” in China by the third quarter of 2012 and that it is in the process of building four more plants in China and another plant in Russia.