Scaling Back

General Motors Corp. is altering a 4-year-old initiative to have suppliers lead integration efforts for its North American vehicle interiors, a company executive says. We will still rely on suppliers doing the coordination, but we are becoming the again, Bo Andersson, GM vice president-global purchasing and supply chain, tells Ward's. We didn't achieve what we expected to achieve. GM made the decision

General Motors Corp. is altering a 4-year-old initiative to have suppliers lead integration efforts for its North American vehicle interiors, a company executive says.

“We will still rely on suppliers doing the coordination, but we are becoming the ‘parent’ again,” Bo Andersson, GM vice president-global purchasing and supply chain, tells Ward's. “We didn't achieve what we expected to achieve.”

GM made the decision to scale back its lead-integrator program about eight months ago as it re-evaluated its global sourcing strategy. GM wants greater control of interior design and the sourcing of components.

In an effort to improve the interior quality of its cars and trucks, considered one of the auto maker's biggest weaknesses, GM began naming lead interior integrators in 2001, choosing Tier 1 suppliers to oversee other parts makers involved in the development of vehicle cabins.

Johnson Controls Inc., for instance, was picked in May 2001 to be responsible for developing the interior for GM's next-generation minivans, which debuted in late 2004. In addition, JCI was picked to manage the interiors for midsize cars.

Because the decision to change course was made relatively recently, the strategy is being scaled back at different rates, depending on the vehicle platform, with suppliers still maintaining the lead role for some programs and GM now managing others.

As recently as February, Lear Corp. issued a press release highlighting its role in designing and developing complete interiors for the upcoming Cadillac DTS and Buick Lucerne fullsize sedans, which are due out later this year. Lear says it provides about 80% of the interior content for the luxury-car program and also integrates components from other suppliers.

GM announced in 2002 Lear would be the lead interior integrator for the next-generation fullsize pickups, while Magna International Inc.'s Intier would take the lead on the fullsize SUVs. GM has altered that strategy as the next-generation GMT900 truck platform nears production next year. Andersson tells Ward's the GMT900 program will have a “mix” between suppliers and GM coordinating interior integration.

Besides improving its interiors, GM hoped the outsourcing strategy would cut development time and reduce costs. All three objectives have been attained, at least at some level.

But GM announced a major executive reorganization March 1 aimed at globalizing its purchasing operations as well as research and development, product development and design. To reduce manufacturing complexity, GM is standardizing components for use around the world. Procurement decisions for seat frames, for example, now are being made through one purchasing agent for all GM architectures globally.

Having a strategy that focuses solely on North American vehicle interiors does not fit GM's new global structure. “We see the vehicle much more at the component level,” Andersson says.

The auto maker also wanted to re-connect with the Tier 2 and 3 suppliers and hopes to achieve better component prices.

“We also saw that instead of doing many of the parts in-house, the suppliers just out-sourced it, and typically had a mark-up fee that made them uncompetitive,” Andersson says. “And we see a lot of the creativity in interiors coming from Tier 2, Tier 3 (suppliers). We want to have that direct contact.”
with Tom Murphy

Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish