Automotive News: GM creates global product board

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Thread: Automotive News: GM creates global product board

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    Automotive News: GM creates global product board

    GM creates global product board
    Goal is to cut costs, speed development

    By Charles Child and Rick Kranz
    Automotive News / March 07, 2005

    A new committee
    GM created the global Automotive Product Board to

    Develop platforms and vehicles useful in many markets

    Move engineering and design work worldwide to offices that have capacity

    Cut costs by creating global platforms and common parts


    Who's on the GM boards?

    Automotive Strategy Board
    Rick Wagoner, CEO
    Bo Andersson, vice president, global purchasing and supply chain
    Katy Barclay, vice president, global human resources
    Larry Burns, vice president, r&d and strategic planning
    Troy Clarke, president, GM Asia Pacific
    Gary Cowger, president, GM North America
    John Devine, CFO
    Eric Feldstein, chairman, GMAC
    Tom Gottschalk, general counsel
    Fritz Henderson, chairman, GM Europe
    Maureen Kempston Darkes, president, GM Latin America, Africa and Middle East
    Tom Kowaleski, vice president, communications
    Robert Lutz, vice chairman, product development
    Tom Stephens, group vice president, GM Powertrain
    Ralph Szygenda, chief information officer

    Automotive Product Board
    Rick Wagoner, CEO
    Bo Andersson, vice president, global purchasing and supply chain
    Larry Burns, vice president, r&d and strategic planning
    Troy Clarke, president, GM Asia Pacific
    Gary Cowger, president, GM North America
    John Devine, CFO
    Fritz Henderson, chairman, GM Europe
    Maureen Kempston Darkes, president, GM Latin America, Africa and Middle East
    Tom Kowaleski, vice president, communications
    Robert Lutz, vice chairman, product development
    Jim Queen, vice president, global engineering
    John Smith, group vice president, global product planning
    Tom Stephens, group vice president, GM Powertrain
    Ed Welburn, vice president, global design

    To improve its products, General Motors took a very GM-like step last week: It created a committee.

    True, it's a powerful committee. The Automotive Product Board will include the company's top global executives. It will have control over which vehicles land in global showrooms in years to come.

    The committee plans to cut costs, create innovative niche products and speed up GM's ponderous product development. As the committee centralizes control, regional product development chiefs will lose some power.

    A hassle with the Pontiac G6 helped prompt GM to create the committee. GM engineers in North America wanted to create a convertible model. But they couldn't use the Saab 9-3 convertible as the basis for the G6 convertible, even though they share the same platform.

    Saab engineers had changed the location of the points on the vehicle that attach it to the assembly line, GM CEO Rick Wagoner said. The board will "clean up those kinds of things," Wagoner said in an interview at the Geneva auto show.

    Learning from Toyota

    GM hopes to emulate companies such as Toyota Motor Corp., which has successfully introduced niche vehicles such as the RAV4 SUV.

    Toyota takes a global approach to product development, says Robert Lutz, GM's vice chairman of product development. Until the global product board was created, GM's four regions developed vehicles independently.

    By contrast, Lutz said, GM's regions would have evaluated the project independently: "Not enough small sport-utilities in the States, not enough in Europe, not enough in Latin America, not enough in Asia. So we can't afford a small sport-utility."

    GM had created global platforms including Epsilon, the automaker's platform for mid-sized cars such as the Saab 9-3 and Pontiac G6. But in practice, each region modified Epsilon for regional needs, increasing cost and decreasing commonality.

    "We call them all Epsilon, but Saabs can't be built in a German Epsilon plant," Lutz said. "German Epsilons can't be built in a Saab plant. Malibu and G6 couldn't be built in Europe. They are almost the same -- but not quite."

    Why is this important? GM saves money by producing as many products as possible in each assembly plant.

    "In the future, we will have differences" in products on the same platform, Lutz said. "But the differences will be 'plug and play,' so that you can plug in this rear suspension or that rear suspension, but it will attach to the same bolt system."

    By standardizing more vehicle parts and factory equipment, GM will save money by purchasing parts in higher volumes. GM also will be able to identify trends faster.

    "We will be able to build a Buick Epsilon in China, a Saab Epsilon in Korea or the United States," Lutz said. "A German Epsilon in Latin America, Germany and Korea with a minimum lead time. Once we get identical parts, we have these enormous savings in worldwide parts buying."

    Regions lose clout

    The Automotive Product Board will enjoy equal status with GM's Automotive Strategy Board, which previously controlled product strategy. Wagoner sits on both boards.

    The strategy board was established in 1998 to coordinate GM's global business. That board, which includes GM's top executives, will focus on business strategy, new markets and alliances.

    To ensure that engineers make products that can be used globally -- and not suited to just one region -- the new product board will take clout from the regions.

    To carry out this mandate, GM created a team of executives:



    Jim Queen was promoted from vice president of engineering in North America to vice president of global engineering. Queen will dole out work to GM's regional engineering centers. For example, if GM's North American engineering center is overloaded, and engineers in China can handle it, China will get the work. This should speed up projects while minimizing workload fluctuations at each technical center.


    John Smith was named group vice president for global product planning. He will handle product planning and advanced vehicle development. He assumes many duties once handled by Mark Hogan, who left in August to be president of Magna International Inc. Smith reports to Lutz. Smith had been head of sales, service and marketing for North America.


    GM's chief designer, Ed Welburn, was named vice president of global design.


    Purchasing chief Bo Andersson received a new title -- vice president for global purchasing and supply chain. He already was managing global purchasing, so his duties remain roughly the same.

    Dave Guilford contributed to this report

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    Re: Automotive News: GM creates global product board

    Hmmm, the second major reorganization since Lutz arrived about 40 months ago. I wonder if this is a good thing (I think the theory motivating this reorg actually is), but I wonder if GM really feels convicted about this move or if management will scuttle it two years hence.

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    Re: Automotive News: GM creates global product board

    I never realised that about the platform sharing, I always assumed it worked how they WANT it to work.
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    Re: Automotive News: GM creates global product board

    I knew the Saab Epsilon's couldn't be built in any other plant... but I didn't realize the Opel ones couldn't be built in the US and the Pontiac/Chevy ones can't be built in Europe. Ouch. That is definitely a waste.

    Well... so long as this committee fixes redundancies and waste in GM.. and the committee isn't a waste in and of itself... it should be a good thing.

    One thing though... I'm very glad UAW isn't on any of these borads.

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    Re: Automotive News: GM creates global product board

    I thought the Epsilon was supposed to be interchangable like this already, with its different wheelbases and stuff. It does make sense to be able to interchange parts, so the cars can maintain their identities yet be similar at the same time.
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    Re: Automotive News: GM creates global product board

    There's a very key strategy point to this, it enables GM to build any vehicle on the same platform in any plant for that platform, hence, they could conceivably use it to pressure labor, and close US plants for underperforming platforms. This is great news for GM, and terrible news for the UAW. It just opens more options, and options are what allows GM to put pressure on labor. Excellent.

    In reality - I agree with the others, this seems very much like common sense, and how I would have thought it worked.

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    Re: Automotive News: GM creates global product board

    I was under the impression that these global platforms employed by GM were interchangable like that. I guess somebody somewhere didn't get the memo about what a global platform was supposed to be.

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    Re: Automotive News: GM creates global product board

    GM has it all wrong, I tell, you, If you look at the accord, its a global car found in virtually every market in the world, so is the E class, Land Cruiser, Land Rover Discovery, Camry, 5 Series, etc....
    Take GM cars, where can you find a Malibu outside of Nafta?? Silvarado anyone outside Iraq? there you find chevy's built in Austraria and Korea.. If America cannot build a single global car, how can they compete? for example can the Equinox and the Cobalt sell in Japan and Europe the way corola and Rav 4 sell here?????

    Lutz is really not a car guy, if he cannot a see a simple fact as this...
    Think about it If pontiac was let to develop its own cars , from hatchbacks to SUV's and sell them all over the world, and Chevy, and Cadillac and Vauxhaul, and opel and Buick, GM would have soo many brands doing soo well, its plants would run at full capacity, and UAW would be happy...
    Look at the BMW 3 Series, its a global car, looks the same world over.. Look at the CTS, its a North American car, they need a BLS to sell in Europe, whast the Heck was GM thinking????
    Instead of runnig incentives on cobalts GM would simply ship some oversees to Europe, Japan Korea to ease off supply in NA, In a Toyota Dealership, you find a Camry built in Japan and another build in America side by side, they are identical...
    Last edited by mbukukanyau; 03-11-2005 at 12:09 AM.

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    Re: Automotive News: GM creates global product board

    Must be why they cant bring the BLS here it would look different if they built it here.Thats kindda dumb i guess they dont have any fully global platforms then.

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    Re: Automotive News: GM creates global product board

    Quote Originally Posted by goblue
    There's a very key strategy point to this, it enables GM to build any vehicle on the same platform in any plant for that platform, hence, they could conceivably use it to pressure labor, and close US plants for underperforming platforms. This is great news for GM, and terrible news for the UAW. It just opens more options, and options are what allows GM to put pressure on labor. Excellent.

    In reality - I agree with the others, this seems very much like common sense, and how I would have thought it worked.

    GM being able to build any vehicle anywhere in the world is exactly where it needs to be. THis is where Toyota is at th emoment. THis is where Ford is trying to get to.
    Any bad news for UAW is good news for GM. They haven't helpd GM at all. They're just a leech.

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    Re: Automotive News: GM creates global product board

    Quote Originally Posted by mbukukanyau
    GM has it all wrong, I tell, you, If you look at the accord, its a global car found in virtually every market in the world, so is the E class, Land Cruiser, Land Rover Discovery, Camry, 5 Series, etc....
    Take GM cars, where can you find a Malibu outside of Nafta?? Silvarado anyone outside Iraq? there you find chevy's built in Austraria and Korea.. If America cannot build a single global car, how can they compete? for example can the Equinox and the Cobalt sell in Japan and Europe the way corola and Rav 4 sell here?????

    Lutz is really not a car guy, if he cannot a see a simple fact as this...
    Think about it If pontiac was let to develop its own cars , from hatchbacks to SUV's and sell them all over the world, and Chevy, and Cadillac and Vauxhaul, and opel and Buick, GM would have soo many brands doing soo well, its plants would run at full capacity, and UAW would be happy...
    Look at the BMW 3 Series, its a global car, looks the same world over.. Look at the CTS, its a North American car, they need a BLS to sell in Europe, whast the Heck was GM thinking????
    Instead of runnig incentives on cobalts GM would simply ship some oversees to Europe, Japan Korea to ease off supply in NA, In a Toyota Dealership, you find a Camry built in Japan and another build in America side by side, they are identical...

    Actually you're not totally right. The Accords and Camrys that are built in the US are localized for the US market.. (ie - they are larger than its Japanese counterparts). CTS is technically the size of a 5-series, so although Cadillac intends for it to compete against the 3-series in the US, when it ships to Europe... it really competes with the 5-series. That's why CTS is shrinking for the next gen CTS. That's why Cadillac needs the BLS in Europe. And most likely will need an ATS in the future.

    The other issue is that Japanese and European cars, for the most part, are smaller in comparison to their US counterparts. US cars are generally wider, longer, larger. And American cars are localized for American roads... able to handle the inconsistencies of American roads. When they go over to Europe, the handling and suspension is considered soft.

    THe underlying issue you have totally missed is that although GM has created 6 or so global platforms, each one has been localized for their respective markets inappropriately in that the 9-3 can't be built in the US and Malibu and G6 can't be built in Russelheim. What GM is moving towards is standardizing ALL their factories to be modular and be able to build any of the platforms with respect to localized demand.

    The problem with GM is that it hasn't even done enough to make LHD and RHD vehicles for the platforms. HOpefully they will correct their own problems. But there will always be a range of cars that will be strictly American and will never sell outside of the NAFTA region. And then there will be cars that are global -- Cadillacs, Saabs, Corvettes, GTOs, and some Saturns. I don't expect Pontiac or BUick or HUMMER to ever leave the US, nor do I expect Opel to return to the US as an Opel.

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    Re: Automotive News: GM creates global product board

    by Peter M. DeLorenzo

    GM faces The Ultimate Question.
    March 9, 2005

    Detroit. GM announced the formation of a global Automotive Product Board to go along with its existing Automotive Strategy Board last week. A committee by any other name, the critical need for the Automotive Product Board came to light when GM discovered that the new Pontiac G6 convertible, which is based on its "Epsilon" platform architecture (also shared by the Chevy Malibu and Saab 9-3), couldn't use the Saab 9-3 convertible as its foundation, because Saab engineers had changed too much of the basic assembly points. The G6 convertible is now severely delayed, and GM is on a mission to eliminate these kinds of dire inconsistencies in the future.

    The immediate and obvious question is why has it taken so long for GM to address this fundamental issue, when other car companies around the world have been doing this for years? And once that question is asked, one begins to wonder just how far behind GM really is in its battle to right its listing ship.

    For the record, the new Automotive Product Board has 14 executives on it, every one from Rick Wagoner, Bob Lutz and Gary Cowger, to eleven other key GM executives from around the world. It will focus on cutting costs and eliminating confounding inconsistencies (like the G6 issue), which prevent GM from competing effectively in markets all over the world. The Automotive Strategy Board, which has been in existence since 1998, focuses more on the business strategy side of GM's endeavors, and has 15 members.

    The goals of the new Automotive Product Board are admirable. After all, if GM wants to compete with alacrity and effectiveness around the world, it must stop shooting itself in the foot at every turn. And if this new board is going to be effective, then the kind of nonsensical missteps encountered with the G6 convertible must be eliminated. But the sheer size of this board is ludicrous and unwieldy, and no matter how well-intentioned it may be, the odds are against this entity moving at the speed necessary to make a serious impact.

    But I'd like to back up a minute and ask another question: Is a 14 member committee designed to eliminate global redundancy really going to be able to make an impact on GM's rapidly eroding market share in the U.S. market? And this begs another question: Why isn't Mark LaNeve, the new GM North America vice president of vehicle sales, service and marketing and their top marketing executive, not on either the Strategy or the Product Board?

    Make no mistake about this, GM's most urgent critical need right now is its plummeting market share. And global Automotive Product Board or no, GM is losing the battle of the trenches in its most important market. Fabulous products are still absolutely essential for success in this, the most competitive market in automotive history, but without outstanding marketing to go along with those great products - they will get lost in the shuffle of a fragmented and wildly over crowded arena.

    So while GM is wrestling with getting its "behind the curtain" house in order, its sliding market share has to be priority number one. And Mark LaNeve is the guy who will have to come up with the strategic plan that gets GM in gear again.

    I know just the place where he and his troops need to start too. GM is slowly but surely selling its cars and trucks over and over again to the same set of buyers, with loyalty programs, incentives and every kind of retail come-on imaginable. The only problem is that this group of buyers is dwindling with each passing model year, and thus so is GM's market share. Until GM actually starts selling cars and trucks outside of its eroding core of loyal buyers, it will continue to watch its share of the U.S. market take a nosedive.

    Getting its global product machine in order is something that's long overdue for GM, but in the process of doing so it gives us a revealing clue as to just how far the company has to go before it's competing like the automotive giant it once was.

    But in the meantime, GM has to come up with a strategic marketing plan that will pull itself out of its sales death spiral.

    How can GM convince consumers who don't already drive its products to even consider one of its cars or trucks, let alone buy one?

    That's the Ultimate Question facing GM.

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    Re: Automotive News: GM creates global product board

    Most posters here seem to have assumed that GM was doing what any half-wit would do; that is make near-optimal use of their resources. So did I. But we were obviously wrong. Do they know about that thing called the internet? It lets people communicate quickly and at low cost. The only conclusion I can draw is that Wagoner and the rest of those clowns are in over their heads or plain lazy. This is pure incompetence. The Fiat fiasco and now we find this has been going on, or rather not been going on. DeLorenzo has nailed it. GM is selling to a shrinking population that even consider their products, and they don't have time to come up with long-range corrections. I'm afraid the situation is critical in the short term. The market, GM's market, seems to be quickly going down the drain. The new incentives are targeted to vehicles that have been on the dealer lots for over 4 months WITH heavy incentives; that tells us how bad it is. We'll see the March numbers in a couple of weeks, but the fact that GM has piled on another incentive is an indication that they won't be good. It really ticks me off to see people like these screw up a corporation that so many people depend on.

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    Re: Automotive News: GM creates global product board

    Quote Originally Posted by mgescuro
    Actually you're not totally right. The Accords and Camrys that are built in the US are localized for the US market.. (ie - they are larger than its Japanese counterparts).
    While US-built Camrys and Accords (the '94-'02 Accord coupes were only built in the US and were exported) aren't exported, they are the same car as their US-built counterparts (NA/AU Honda Accord is the Honda Inspire everywhere else, Acura TSX is Accord ex. for NA/AU, same platform/size). Toyota and Honda have plenty of smaller cars to take care of the other markets, and the Camry and Accord are their full-size cars, although in America they aren't really seen as full-size.

    US Camry:



    Japanese Camry:



    US Accord:



    Japanese Inspire:



    US TSX:



    Japanese Accord:

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    Re: Automotive News: GM creates global product board

    Man. Come on GM. This stuff really isnt that hard.
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