DETROIT--General Motors is consolidating its global vehicle platforms as part of an effort to combat the roughly $1 billion it loses annually to product-development snags.
Last week GM said it plans to halve the number of vehicle architectures, or the platforms of parts and subcomponents that underpin its cars and trucks, from 30 last year to 14 in 2018.
By then, GM says, 90 percent of its vehicles will be on its highest-volume platforms, up from about 30 percent last year.
GM wants to reduce costs related to canceled programs, late changes to vehicles nearing production, and the reassignment of a vehicle program from one of GM's engineering centers to another.
"The start-stop, on-again, off-again, herky-jerky nature of our product-development process was grossly inefficient...and it produced poor products," CEO Dan Akerson told analysts and media during GM's annual investor conference, held online.
Mary Barra, GM's senior vice president of global product development, said fewer platforms should reduce costs, improve quality, and get vehicles to the market more quickly.
Barra also said GM's improved financial picture is allowing it to fund product development at an even level through good times and bad, which also should help it avoid costly hiccups.
For example, GM's financial woes led to on-again, off-again development of its Lambda-architecture crossovers, delaying the launches of the Buick Enclave, Chevrolet Traverse, and others by nearly 18 months to 2007 and 2008.
GM also intends to hold the line on manufacturing costs. On a two-shift basis, GM will be using about 99 percent of its North American production capacity by year end, up from about 90 percent in 2010, said Diana Tremblay, GM's global chief manufacturing officer.
She said GM could go as high as 133 percent by adding third shifts--and higher with overtime--without having to open more plants. That would cover GM's anticipated share of the market even if U.S. sales jumped to 16 million units a year. Forecasters predict sales this year will be under 13 million.
That appears to dampen the prospect of GM's opening one of its shuttered plants, either in Spring Hill, Tenn., or Janesville, Wis. UAW leaders have said that a commitment by GM to reopen one of those plants is among their top priorities in this year's contract talks.
(Source: Automotive News)