GM seeks to shave $1bn from design costs

[Guest Josh]

Detroit - Struggling automaker General Motors said on Tuesday it aims to save up to $1 billion a year by reorganising its regional design and engineering structure into a single, global operation.

"We will have one single, global design and engineering budget," GM vice chairman Bob Lutz told reporters at a luncheon sponsored by the Automotive Press Association.

The world's largest automaker is racing to cut costs after having lost more than $1.2 billion in the first six months of 2005.

It is currently in negotiations with its union to help reduce its health care and pension costs, and is also working to limit the negative repercussions of Saturday's bankruptcy filing of its largest components supplier, Delphi.

GM said it could incur up to $11 billion in pension obligations to the employees of its former subsidiary.

Lutz declined to comment on the Delphi situation and its potential impact on the automaker, but did say GM "does not" share the opinion of a Bank of America analyst who wrote Monday that GM has a 30 percent chance of filing for bankruptcy as a result of Delphi's collapse.

Lutz says GM will concentrate on ways to make itself more competitive, such as the new product development process, which relies on North America to lead development of light trucks and sports utility vehicles, while Europe will be responsible for development of mid-size cars and Asia-Pacific will take the lead on small and compact passenger cars.

"This is absolutely brand new, uncharted territory for General Motors," Lutz said, adding the auto maker previously developed vehicles on a regional basis, providing engineers the freedom to devise unique components and manufacturing processes for their respective regions.

More: http://www.busrep.co.za/index.php?fSection...ticleId=2942972

[Cremazie]

They do need a unified company, in more than one way. They need to think smaller in order to get their costs under control. In this case, thinking smaller but working larger. Cut down on badge engineering, offer less products. In my opinion we could look at Pontiac, keep the Vibe, Solstice, and have a CTS varient. Buick should keep the Lacrosse and Lucerene and have a RWD Larger than the Lucerene. GMC should keep the Envoy, Yukon, Canyon and Sierra. But only be of the Denali variety to keep it out of chevys way. Chevrolet should stop building a car for everyne. Keep the Cobalt, HHR,(merge the Malibu/Epica into one car), Impala, Equinox, Silverado, Tahoe, Trail Blazer, Uplander and Express. Another idea is allow all dealers to sell all cars. Be a GM dealer, not a Chevy dealer. I think it would help cut costs and sell more cars!

[PlumCrazy]

They do need a unified company, in more than one way. They need to think smaller in order to get their costs under control. In this case, thinking smaller but working larger.
Cut down on badge engineering, offer less products. In my opinion we could look at Pontiac, keep the Vibe, Solstice, and have a CTS varient.

Buick should keep the Lacrosse and Lucerene and have a RWD Larger than the Lucerene.
GMC should keep the Envoy, Yukon, Canyon and Sierra. But only be of the Denali variety to keep it out of chevys way.
Chevrolet should stop building a car for everyne. Keep the Cobalt, HHR,(merge the Malibu/Epica into one car), Impala, Equinox, Silverado, Tahoe, Trail Blazer, Uplander and Express.
Another idea is allow all dealers to sell all cars. Be a GM dealer, not a Chevy dealer. I think it would help cut costs and sell more cars!

[post="30656"]<{POST_SNAPBACK}>[/post]

To add my two cents, I would jetison Buick and Pontiac. Low investment in each brand has diminished their identity and competitivness. Save the Solstice with a facelift and rebadge it for Chevrolet. Chevrolet is a world brand and as a world brand it should offer a full line of vehicles. Chevy would be the cornerstone for a new GM. Cadillac (Saab would either be sold off or share development cost with Cadillac) would retain their luxury status and build upon that. Without the canablization of the brands inbetween, Chevy could truely focus on quality and design. As for Saturn, maybe they could just rebadge GM Euro imports.
Just an opinion.

[Cremazie]

To add my two cents, I would jetison Buick and Pontiac. Low investment in each brand has diminished their identity and competitivness.  Save the Solstice with a facelift and rebadge it for Chevrolet.  Chevrolet is a world brand and as a world brand it should offer a full line of vehicles.  Chevy would be the cornerstone for a new GM.  Cadillac (Saab would either be sold off or share development cost with Cadillac) would retain their luxury status and build upon that.  Without the canablization of the brands inbetween, Chevy could truely focus on quality and design.  As for Saturn, maybe they could just rebadge GM Euro imports. 
Just an opinion.

[post="30685"]<{POST_SNAPBACK}>[/post]

I thought I was going on the deep end. :o
Though I would rather have a healthy GM with just Chevy and Caddy than no GM at all!

[PlumCrazy]

I thought I was going on the deep end.  :o
Though I would rather have a healthy GM with just Chevy and Caddy than no GM at all!

[post="30686"]<{POST_SNAPBACK}>[/post]

Like I said, it's just an opinion but I also would rather have a healty GM with ONLY Chevy and Cadillac. I hate to see people, try as the might, give evidence that people, it that market, would buy a Buick over a Lexus. A lost cause in my book.

[FUTURE_OF_GM]

If GM were parred down like that I can honestly say that I wouldn't buy GM... I can't afford luxury and I don't want mass-market

[Drew Dowdell]

I think Buick, Pontiac, GMC, Holden should become a division. Hummer would be a sub-division of GMC. Chevy would be a division Saturn, Saab, Cadillac, Opel/Vauxhaul would be a division. Buick would be down to two sedans, a coupe/convertible and a medium crossover. The cars would be cushy luxury varients of the Pontiacs. Pontiac would be two sedans two coupe/convertibles, the would be sport varients of the Buicks. GMC would have all the trucks and mini-vans in the BPGh Division. Saturn/Saab/Cadillac/Opel would be more on the Jap/Euro flair. Chevy would pick its vehicles from any of the above divisions to decontent and make it's own. The 3100, 3400, 3500, 3800, 3900 would all be put out to pasture. Sorry pushrod fans, I like the 3800 as much as any of you, but the 2.8 and 3.6 have won this round. The HF engine with their turbo varients will be the only V6s available. The inline 5 and inline 6 would be adapted for car use on the upper end of the car lines. 6-speed autos with available 6-speed manuals across the board. Don't care if Mercedes has 7-speed, it's overly complex.

[Clownzilla]

Another idea is allow all dealers to sell all cars. Be a GM dealer, not a Chevy dealer. I think it would help cut costs and sell more cars!

[post="30656"]<{POST_SNAPBACK}>[/post]

Interesting idea. After an insane amount of dealer backlash, this could actually work for GM (or maybe not), worth a look though. I'm surprised that nobody else has mentioned this.

[Drew Dowdell]

I hate to sound snooty, but Cadillac and Hummer buyers don't want to take delivery of their car next to an Aveo buyer. There is a reason Lexus and Toyota are nearly always in seperate buildings.

[Cremazie]

It is snotty, but I do catch the drift!

[Drew Dowdell]

It is snotty, but I do catch the drift!

[post="30715"]<{POST_SNAPBACK}>[/post]

Well when you're paying a premium for a car, it is reasonable to expect premium service. Likewise, when you're trying to get a discount on the cheapest car possible, you don't mind going through self-checkout.

[PlumCrazy]

I hate to sound snooty, but Cadillac and Hummer buyers don't want to take delivery of their car next to an Aveo buyer.

There is a reason Lexus and Toyota are nearly always in seperate buildings.

[post="30712"]<{POST_SNAPBACK}>[/post]

Exactly!!!

[Cory Wolfe]

Hate to say this again, but Pontiac is the only thing keeping me within GM. So.. it goes... I go. Not that any of you guys or GM really cares... Anyways, I believe the whole Globalizing of GM is a good thing, so this is good news, I guess. Although, I'm pretty sure a brand like Pontiac only being sold in North American isn't all that global. Same with other brands outside of NA. That says that they are either going to try to market Pontiacs somewhere else for a change, or that I'll be progressing over to Honda. Since I doubt the first choice is going to happen... I better start progressing by buying that Civic I want. Whenever I find the money for it, that is. Yay! I love GM!

[hyperv6]

I don't know if anyone has noted this but Chevy everywhere but the mid east and the States is a Daewoo. Buick is losing product here but is adding more in China and is one of GM's sellers are all based on Holden. Opel and Saturn will be as one soon with only the grill bar being the difference Corvette in Europe is not a Chevy anymore. The Delta that is the Cobalt and Ion is the same base as the Vauxhall. Kappa is going both sides of the Atlantic and Caddy, Hummer and more are both sides too. The new RWD will be shared and possibly built down under just as the GTO is today. I see GM is already far into this plan and it is long overdue. The cars from Japan have for a long time sold many of there cars world wide with only a few nich models in a few markets. As in busness cars are now becoming a global comoditiy and to keep it economical GM and Ford need to follow through on a world car that has been promised for years. Also you can just make GM dealers as the lawsuits would take what is left of GM. Why do you think they are roling Pontiac and Buick into one dealer. They already dodged a bullit with the closing of Olds. They got many of those dealers into Pontiac/Buick/GMC and they have propered after the tough last years of Olds. GM just can run the dealers out.

[PlumCrazy]

[i[i]]"I don't know if anyone has noted this but Chevy everywhere but the mid east and the States is a Daewoo. Buick is losing product here but is adding more in China and is one of GM's sellers are all based on Holden.

Opel and Saturn will be as one soon with only the grill bar being the difference

Corvette in Europe is not a Chevy anymore."[/i]

The Daewoo name was dropped in Europe and replaced with "Chevy". The Corvette is basicly its own brand so no need to "cheapen" it by selling it alongside rebadged Daewoos/Chevys. In Europe that is. Edited October 19, 2005 by PlumCrazy

[Shantanu]

GM shouldn't be cutting any corners in R&D.

[thegriffon]

[i[i]]"I don't know if anyone has noted this but Chevy everywhere but the mid east and the States is a Daewoo. Buick is losing product here but is adding more in China and is one of GM's sellers are all based on Holden.

Opel and Saturn will be as one soon with only the grill bar being the difference

Corvette in Europe is not a Chevy anymore."[/i]

The Daewoo name was dropped in Europe and replaced with "Chevy".  The Corvette is basicly its own brand so no need to "cheapen" it by selling it alongside rebadged Daewoos/Chevys.  In Europe that is.

[post="30875"]<{POST_SNAPBACK}>[/post]

The Royaum is the only Holden-based Buick. The rest are either Chinese adaptations of the Daewoo Lacetti or Buick Regal. The next Regal will also be a (new platform?) W-body, but may eventually merge with Daewoo's imminent Azera competitor when both switch to Epsilon II (ideally with the LaCrosse replacement as well).

[bobo]

A truly global GM is around the corner. It's taken the domestic automakers 25 years to transition to workable global platforms. Trucks will still be engineered in the U.S. because where else in the world do people buy such humongous vehicles? Sounds like there will be huge white-collar job cuts in GM. Maybe eventually there will only be a couple of styling studios in the U.S., with major R&D work occurring in Europe, India, and Korea.

[SimonDavid]

"This is absolutely brand new, uncharted territory for General Motors," Lutz said

The problem is that it is not brand new territory for almost every other company

I worked at Bosch 5 years ago - we had one global capex and R&D budget. Australia was working on development programs that would end up never being built in Australia. Often Germany Australia and the US would be working on the same project simultaneously through sue of massive broadband connections for the CAD systems.

[raven05649]

Hate to say this again, but Pontiac is the only thing keeping me within GM. So.. it goes... I go. Not that any of you guys or GM really cares...

Anyways, I believe the whole Globalizing of GM is a good thing, so this is good news, I guess. Although, I'm pretty sure a brand like Pontiac only being sold in North American isn't all that global. Same with other brands outside of NA. That says that they are either going to try to market Pontiacs somewhere else for a change, or that I'll be progressing over to Honda. Since I doubt the first choice is going to happen... I better start progressing by buying that Civic I want. Whenever I find the money for it, that is.

Yay! I love GM!

[post="30756"]<{POST_SNAPBACK}>[/post]

To my understanding of the whole Globalization of GM is a division like Pontiac, which may only be sold in the US, would get mid-sized cars with more of a European flare, i.e. more performance.

IMO, don't jump to Honda yet. save that money and see what happens over the next few years.