By on August 11, 2011

“In attempts to boost profitability, GM wants to cut the number of vehicle platforms by half over the next decade and consolidate the number of engines,” reports the DetN. That’s the good news. The bad news is that “GM’s executives admit the 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.” If the DetN says it, then it must be true. Putting platforms and engines on a diet is seen as the cure.

Mary Barra, GM’s product chief, told the DetN and an assemblage of Wall Street analysts that by 2018, “GM hopes to build 90 percent of its vehicles on 14 platforms — half the number now — and boost manufacturing efficiency by 40 percent.” Not to nitpick, but if you build 90 percent of your vehicles on 14 platforms, then you can’t build the remaining 10 percent on thin air and you will need more platforms for low volume cars. So we talked a bit to GM to find out more about how they will go from zaftig to svelte.

The basic story is that GM is trying to streamline its “too many variations in the types of engines and vehicle underpinnings,” and this is a good thing.

Currently, only a third of GM’s volume comes from cars that share what GM calls “core architectures.”  The rest sits on a hodgepodge of what GM charitably calls “regional architectures.” Currently, there are 30 “Core Architectures” and an untold number of regional dishes.

In the future, GM’s local chefs will have to use a common cookbook.  By 2014, in the world of cars that is tomorrow, the number of “Core Architectures” will shrink to 24, but the global volume that uses these core architectures will grow to 62 percent. Four years later, by 2018, all regional architectures will have vanished. The number of global architectures will have shrunk to 14. Those 14 global architectures will serve 90 percent of the volume.

But again, what about the remaining 10 percent? “There are a few cars that have a unique architecture, which they share with nobody,” explains Klaus-Peter Martin, GM spokesman in Detroit. As examples, he names the Chevrolet Corvette and some vehicles produced with GM’s JV partners in China.

Likewise, the number of engine platforms will shrink from currently around 20 to less than 10 in 2018. Keep in mind theses are engine platforms, which allow a multitude of engines.

GM expects global efficiency gains between 35 and 40 percent from this, which is a tall order. But if you look at how little global commonality there is currently in the world of GM, those numbers should be doable. With a lot of screaming from the natives.

Michelle Krebs of Edmunds says “it’s the course a lot of manufacturers are taking. Everyone is trying to get to greater economies of scale.”

Volkswagen for instance is moving away from platform-think and goes to its new kit architecture. This allows a much higher number of different cars with different character, built from modules. Object-oriented car design, if you will.  On a smaller scale, BMW creates a number of engines, gasoline and diesel, from one building block, a single, standardized cylinder.

This industry takes huge investments, and spreading them across as many units as possible is the name of the game. If you make the most from the least, you win. Don’t think “badge engineering” when you hear this. If done right, the slimdown can make the offerings more attractive, and can help the brand(s) gain sex-appeal. That of course remains in the eye of the beholder. If you like the right lady, you’ll complain that the left one is the wrong one.

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31 Comments on “GM Will Build Less To Make More...”

  • avatar

    It would have been much easier to make this happen in bankruptcy. Otherwise, I won’t believe it until I see it. I am from the show-me state afterall.

    • 0 avatar

      Reworking your entire lineup would have been easy during bankruptcy? Do you know how much product planning and engineering work has to be done to pull this off?

      • 0 avatar

        There were many people on this board and others who advocated just such a scenario prior to Bush’s 90-day bail out in 2008. I, too, think it would have been easier to have had this happen during bankruptcy prior to the bail outs.

        If GM wants to be profitable they have got to get away from the UAW. A good start would be to have GMC go the way of Pontiac, Saturn and Oldsmobile. Sell Buick to GM of Shanghai and import Chinese-made Buicks to the US. That’s how VW, Datsun and Toyota got their start in the US and they became highly profitable.

        And as far as engines are concerned, select the top three best ones and incorporate them into the passenger cars selected to remain on the build-list: I-4, V6, and V8.

        With trucks, SUVs and CUV platforms, have big pushrod V8s for the 3/4-ton and up class, and as optional engines for the 1/2-ton class, and use the V6 and I-4 engines selected for the passenger-cars in the SUVs and CUVs. IOW, simplify.

        Getting more robots would also result in higher quality. Take a lesson from Hyundai of Alabama for the latest and greatest in automotive assembly plants. Highly profitable!

        But the key to higher profitability is also to get more people to buy a GM product. Barring a total implosion of the quality of the foreign brands, I do not see this happening ever again. The mass exodus to the foreign brands sealed that deal when people voted with their feet and their wallets over decades.

        That’s why Camry remains the best selling midsizer. People consistently choose to buy the worst from Toyota over the best from Detroit.

        I am not optimistic that GM can downsize their product line and streamline their operation after a tax payer bail out and nationalization of a failed company.

        The UAW has been emboldened by the bail outs of Bush and Obama and now the UAW is invincible and will object to losing any jobs now and into the future.

      • 0 avatar

        This type of thing is much, much easier when starting a product line as opposed to converting existing product lines. You really need a platform designed from the very beginning to be modifiable. And on top of the technical challenges, there’s the culture; changing the way people think can be just as hard.

        I believe this is a noble strategy by GM, but I also believe they are in for some severe heartburn along the way.

      • 0 avatar

        highdesertcat – And as far as engines are concerned, select the top three best ones and incorporate them into the passenger cars selected to remain on the build-list: I-4, V6, and V8.

        A bit simplistic since a Cruze will not have a V6 or V8 and a Malibu will not have a V8. So they need more than 3 engines.
        They need to harmonise the base Regal and Malibu engines, offer two significantly different engines for the Cruze (two 138bhp engines, albeit one turbo charged, is near pointless).
        At least GM is going in the right direction with the Cruze and Malibu being global cars – the Corolla and Camry are not – no European equivalents.

      • 0 avatar

        Mike, I didn’t explain fully about the engines. I am amazed that anyone reads my comments anyway since I don’t comment often and only when I feel compelled to do so by the topic or the comments on the thread.

        Choose the best of the I-4 engines and then use that design throughout the line. Displacement can vary depending on the bore, i.e use a 1.6 version for the smaller cars, a 2.0 version for the larger ones and a 2.5 version for the largest in that class application.

        For the V6 engines choose the best design and vary displacement according to use, i.e a 2.8 or a 3.6 for cars and SUV/CUVs, and a 4.0 for 1/2-ton trucks.

        The DOHC 32-valve all-aluminum V8 would be limited to luxury cars like the Cadillac and the optional engine for the 1/2-ton trucks. The pushrod V8s would be solely for use in 3/4-ton trucks and heavier, along with diesels.

        We can see that Ford is using a similar set-up now with their 3.7 normally aspirated V6 and a turbo-charged 3.6 for added get up and go, while they still have their V8 engines as options.

        Hope this clarifies it. I’m not getting paid for my ideas so I tend to post the broad details in my comments. But I do believe that GM should simplify. Whether they can actually do that is a mystery for us all to behold and marvel at.

    • 0 avatar

      It would have been much easier to make this happen in bankruptcy

      The purposes of a bankruptcy are to restructure debt and equity, and to install a management team that can manage an approved reorganization plan. The key question to be addressed is whether the reorganization can be successful enough to at least pay off the existing creditors in the same amounts that they would have received in a liquidation.

      The purpose of a bankruptcy is not to crawl into the minutia of what colors are to be offered, or the locations of the airbags, or the number of presets on the stereo, or what engines are going to be installed into what platforms. If the creditors got the minimum that they were supposed to get, that is sufficient for the court.

      If the DIP lender put its money into a loser, then that’s up to the DIP lender to deal with later. In this case, that role was taken up primarily by the US government, and it has representation on the board to oversee its funds.

  • avatar

    while it seems like good news, I dont have complete faith that GM can pull this off cleanly and within the timeline. I do fully believe Ackerson can force this to happen. Also, I just dont think GM/Chevy will ever be as sexy as the girl on the left, nor as “light”.

    • 0 avatar
      Secret Hi5

      That woman on the left is too skinny. There’s not much to caress or grab. :D

      Applied to this story–Better be careful with trimming the “excess” fat or you might end up all skin & bones.

  • avatar

    While I applaud the effort, I still scratch my head and wonder if the new GM is any different than the old GM with a strategy like this.

    If it was me, I would be working hard on this but keeping it to myself since it just admits that they’re about 4 years behind where the rest of the industry is on the process of consolidation.

    Secondly, 14 + “others” – really? By the time they get to that level in 2018, the standard will be 1/2 that number – they need an A, B, C and D car platform; 3 total trucks (1-small, 1-large and 1-HD) and 2 “others” to cover the Corvette and something else – Not 14 plus the “other”

    Third – the other 10% of the balance of what GM sells is a lot, given the sales of the mentioned Corvette, that part needs more details.

  • avatar

    The Zeta-Jones! Now that is a good name for a new world shared platform for GM.

    All those troubles with suppliers, lack of commonality etc etc have been well known problems for decades. The news is probably the executive team being ready to admit it (do they have an option?).

    • 0 avatar
      Mark MacInnis

      I, too, would choose the Zeta-Jones. Smooth, fast and powerful….handles like a dream. Amazingly beautiful coachwork. The rear quarter fenders have some wonderfully complex curves…probably some great headlights, too.

  • avatar
    Rod Panhard

    Hasn’t GM said this before?

  • avatar

    “Don’t think “badge engineering” when you hear this”
    Oh but I do. If any motor company out there has excelled (?) at trying to sell two different named cars which are essentially identical – it’s GM. Here’s hoping they have learnt from the past…

    • 0 avatar

      Badge engineering was taking the same car with minimal changes and placing a different badge on it. Currently, like the Regal/Insignia. Having too many brands is why GM continued to do this. Now, you have cars like the Acadia and Enclave, sold on the same lot, but very different vehicles.

      • 0 avatar

        yeah your preaching to the choir here, its GM’s management that needs to learn that, and with them all being new unseasoned car people, they simply dont understand it and believe they can fix it with a dash of marketing to spice up the same car, when its chicken, it’s chicken no matter what you flavor it with. I support cutting engines and platforms, but when your driving it with costs in mind, and costs only, you end up with a hen house full of chickens!

      • 0 avatar

        I understand tikki50, but this move has to be done. You can’t compete with too many platforms, requiring more suppliers making them less happy. You have to be able to do what others in the industry have been doing and been doing better for awhile. If they fail at it, the company won’t be around long. If they don’t do it, the company won’t be around long. They have to do this, and do it right.

      • 0 avatar

        Currently, like the Regal/Insignia

        That isn’t an example of badge engineering, as these cars don’t compete in the same market.

        An obvious example of GM badge engineering currently in use is with the pickup trucks. They pretty much look the same, and even if individual buyers may prefer one over the other, most of them can instinctively tell that they aren’t really different.

        The elimination of the brands that occurred as a result of the bankruptcy did a great deal to eliminate GM’s badge engineering among its passenger cars in North America. While I quibble with aspects of it, that was generally a good idea and I believe that we can already see it paying off.

      • 0 avatar

        tikki, considering the executive who is quoted is an engineer with 30 or so years of experience at GM, including running an assembly plant and global manufacturing engineering. I am not sure what you mean by “unseasoned car people.”

  • avatar

    I know GM well and I promise you that this “plan” is not being accepted with open arms by the management at the “chief engineer” level and down to EGM. If anything, the opposite is happening. Powertrain “proliferation” is a massive drag on GM and programs will be killed and ripped out of the Chief Engineer’s cold dead hands.
    As one poster said: talk is cheap. Believe it when you see it….
    Personally, I don’t believe anymore so I walked.

    • 0 avatar

      But, I mean, haven’t they already been doing basically this for some time now? The days of GM building, for example, the Saturn S-series on its own platform with its own engines, used nowhere else in the company, are over (for better or worse) and have been for years.

      • 0 avatar

        I think you are missing the point. Their propaganda says they have been “downsizing” the number of platforms and reducing powertrain proliferation, the reality is quite a bit different.
        If I would tell you how many different powtrain combinations there are for just ONE major vehicle “platform” you would not believe me. It is disgusting as a taxpayer-owner of part of GM LLC. Reducing proliferation and taking advantage of economies of scale is mandatory for GM’s survival. The jury is out on if this happens….

      • 0 avatar

        I think you’re misinterpreting what they’re saying. They want to reduce the number of platforms, and they want to reduce the number of powertrains. They certainly don’t want to reduce the number of powertrains per platform! I mean, geez, they need some way to differentiate between a Chevy Malibu and a Buick Regal, or else why have two different cars? This is basically the problem that Ford is having, and watch as Mercury and later Lincoln become meaningless badges to be killed off.

        If they’re using Epsilon II for everything from the Malibu mass-market-mobile to the Cadillac XTS flagship, they’re going to need to provide it with basically every engine they have.

  • avatar

    You can take this common platform thing too far. The Mazda Miata has been a niche market success for more than two decades precisely because it wasn’t built on a common platform. Platforms that serve multiple purposes involve engineering compromises. They might be too heavy for one purpose, or too light for another, too wide or too narrow. Hyundai raised its competitiveness significantly by engineering its Sonata to only take 4 cylinder engines, and in so doing ended up with a midsize car that weighs within a few pounds of the compact Chevrolet Cruze, hundreds of pounds less than the Malibu.

    Remember when almost all of Chrysler’s lineup was based upon the K-car platform and the 2.2 or 2.6 liter engine? The compromises were plain as day.

    Enhanced CAD should allow manufacturers to design new platforms cheaper. Enhanced computerization of the parts change should make it easier to keep track of more individual parts. Too many parts from too many platforms isn’t the problem. The problem is too few customers. If you send out the door compromised cars, the too few customers problem will just get worse.

    • 0 avatar

      Wait, wasn’t GM’s Miata competitor a shared platform used by Pontiac, Saturn, and Opel?

      (and wasn’t it actually pretty good?)

      Anyway, they said in the announcement that they know there are exceptions to the shared platform thing. I mean, you may have a low opinion of Dan Akerson (I sure do!) but he’s not stupid enough to kill off the Corvette.

  • avatar

    GMs big problem is making cars for Americans everyone else gets good GM cars American GM has been crap for 30 years or more The Corvette is useful only for drive trains to ship to Aussie so they can build proper cars around them something GM in the US cannot do.

  • avatar

    @Bryce: absolutely correct. Think Holden/Vauxhall/Pontiac G8. Not to mention the ‘new’ Caprice, much to the shagrin of Mr. Bob Lutz will be available as a police-only model. They would have a marketing homerun with this car if they went civilian with it, made it sub $25k AND a V8 FOR THAT PRICE. Unfortunately, Mr. Ackerson, President Goodwrench, and the commisars at the UAW won’t EVER allow it; at least on a scale to make money.

    Cars like the much-hailed (by certain competitors of TTAC) Epsilon platform should be the first to go. Junk with a capital J. Sure, the Ecotec is an ok engine, but does that really matter when the rest of the car falls apart around you?

  • avatar

    Common platforms work if they’re engineered right. Ford has been spawning multiple cars off of single platforms for decades… one of my favorite examples is the 626/MX-6/Probe platform that got downsized into the commendable Protege/Familia, then went on to serve out its zombie years as the Escape/Tribute.

    Despite platform sharing with Mazda, Ford makes cars that have a significantly different character. The only problem with this system is that if there’s a basic limitation to the platform, all cars made on it will share that limitation… (3 and Focus lack of rear seat room, for example)… but if the platform is strong, it bodes well for all cars made on it.

  • avatar
    Educator(of teachers)Dan

    Those posters who have mentioned GM selling different cars on the same platform in different markets. If your Buick drives like an Opel, will you care as long as you’ve never driven an Opel? Holdens that become Chevrolets (I pray.)

  • avatar

    What took you so long?

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