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GM Releasing Its Inner Strength

After 98 years in business, the No.1 auto maker that grew into an unwieldy amalgam of brands, is rediscovering the power of cohesion.

Take a single twig and snap it. Bundle it with similarly puny saplings and the combined strength can be astonishing.

The analogy applies to modern-day General Motors.

After 98 years in business, the No.1 auto maker that grew into an unwieldy amalgam of brands is rediscovering the power of cohesion.

The global transformation has been occurring on many fronts.

Most importantly, it is a mantra in product development and manufacturing.

New vehicles stem from global architectures, developed in specialized centers across the globe. Fullsize trucks hail from North America; midsize cars from Europe; large rear-drive cars from Australia, to name a few.

The mandate is clear: vehicles must be engineered for all regions and designed for assembly in a GM plant anywhere in the world.

From the manufacturing side, plants must be flexible and brand-neutral to supply all markets.

It is not a new strategy, nor one unique to GM.

But what is noteworthy is mounting evidence the auto maker is serious, amid tangible results.

One concrete example is the 7-year strategy under way to consolidate Saturn and Opel brands to provide European-styled products for consumers on both sides of the ocean.

By 2014, all vehicles for Saturn and Opel will be interchangeable, executives say.

It started with a pair of roadster, the Saturn Sky and Opel GT, and will continue with an Astra for each brand in 2008; a shared new cross/utility vehicle (Opel Antara/Saturn Vue replacement); the eventual sharing of the Opel Vectra midsize car; and the entry of the Opel Corsa subcompact to the North American market.

Another area of promise is the Australian-engineered RWD car platform that will supply everything from a new ’09 Chevy Camaro to a luxury Buick Royaum in China.

The plan is for plants in Australia and Canada to build some of these cars, as well as factories in the U.S., China and perhaps South Korea.

Stories like this will abound in the years ahead, while the brain trust in Detroit’s RenCen continues to orchestrate this coming together.

GM “finally is acting as one single auto maker,” says Vice Chairman Bob Lutz, noting, historically, GM operated as four separate companies around the world (North America, Europe, Asia/Pacific and Australia).

“GM was the holding company that collected financial results from these four companies,” he says, in a conglomerate approach that clearly no longer is working.

The 90-day distraction of exploring possible synergies in a potential tie-up with the Renault-Nissan Alliance has come to a sudden halt with GM’s decision to end talks.

But the upside of the exercise is it shines a spotlight on GM’s North American turnaround that is exceeding expectations, as is its global strategy.

There are billions in savings to be wrought by operating as a single company, and there is every indication GM will not stop until it has squeezed out every cent.

And there is a renewed sense of confidence in Detroit with every twig it adds to the bundle.

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