GM Centralizes All European Designs

[Willy Wonka]

Bill Moyers Nightly Business Report: GM will place new emphasis on its EU offerings by consolidating all of its designing at one location. Coincidental with .27 rise in stock.

So now we know why the head of saab design left.

[CosmicSaab]

GM to Overhaul Its European Operations



Friday June 18, 1:22 PM EDT

RUESSELSHEIM, Germany, Jun 18, 2004 (AP Online via COMTEX) -- General Motors Corp. on Friday announced a major overhaul of its unprofitable European operations, saying it would bring its units Adam Opel AG, Vauxhall Motors Ltd. and Saab Automobile AB under closer central control by its European headquarters.

The company said it hoped to increase efficiency by moving functions such as finance, engineering, manufacturing, sales and marketing into Europe-wide departments coordinated at GM Europe headquarters in Zurich.

The company will also create a single design unit, which will oversee work being done on new Opel, Vauxhall and Saab models.

As part of the changes, the head of Ruesselsheim-based Opel, Carl-Peter Forster, leaves that job to take over as president of GM Europe in Zurich. The heads of Opel, British-based Vauxhall and Swedish division Saab will report to him, the company said.



Forster in turn will report to Fritz Henderson, who took over as president of GM Europe earlier this month and now gets the new title of chairman.

"Today we're asking all of our European employees to recalibrate themselves to a mind-set of working for General Motors overall, instead of an individual brand or country operation," Henderson told employees in a satellite broadcast according to a statement.

"While maintaining brand character and integrity is vital, working together as one team is equally critical to future success."

GM's European operations have been losing money since 1999 despite an ambitious restructuring plan, and the company recently had to backtrack from predictions that GM Europe would break even or make a profit this year.

While GM as a whole earned $1.3 billion in the first quarter, GM Europe remained the weak spot, seeing its losses widen to $116 million from $65 million in the same quarter a year earlier. Market share slipped to 9.5 percent from 9.6 percent in a sluggish European auto market.

Bob Lutz, GM's vice president of global product development, said at a news conference in Ruesselsheim that the new structure would help boost parts sharing, ending practices such using different wiring harnesses for Saab cars.

Things that customers don't see - and which don't affect brand identity - such as wiring, air conditioners and inner seat frames, should be engineered just once for the different brands, Lutz said.

"The cars are different in stupid ways," Lutz said. "No customer is ever going to get under the instrument panel of his Saab and say, this is an outrage, these are exactly the same wires as in my brother's Opel Vectra. These are silly differences that do not benefit the customers."

GM had been slow in adopting such common approaches worldwide because it has historically respected the autonomy of its regional divisions, Lutz said, a strategy that "worked well for 80 of the last 100 years" but was now behind current industry practice.

More common parts could make it possible to build cars of different brands in the same size category on the same assembly lines, Lutz said.

"Cars of a certain category of two or three different brands could be built in a common assembly plant," Lutz said. "It's just the efficient way to do it." He didn't say when or where that might happen.

Succeeding Forster as head of Opel is Hans Demant, who will keep his earlier responsibilities as vice president of engineering for GM Europe. Vauxhall head Kevin Wale and Saab head Peter Augustsson will remain in their posts, reporting to Forster.

Forster also becomes chairman of the board of directors at Opel, replacing Hans Barth, who will remain on the board.

The company said the role of the divisions would now be to ensure their brands remained distinctive, and that despite the pan-European emphasis, the divisions would have to remain separate entities to meet legal requirements in their home countries.

"As many companies do, we are capable of running these businesses in a very functionally integrated way while respecting local laws," said Henderson. "But how you make decisions and who people report to will be defined functionally."

In midday trdaing on the New York Stock Exchange, GM shares were up 13 cents at $47.90.

By DAVID McHUGH AP Business Writer

Copyright 2004 Associated Press, All rights reserved

[CosmicSaab]

I am probably the only one who thinks this could be good for Saab.

[squishmann]

Yes, it does sound like it should be. Saving money the right way

[Simon]

Originally Posted by E715

"The cars are different in stupid ways," Lutz said. "No customer is ever going to get under the instrument panel of his Saab and say, this is an outrage, these are exactly the same wires as in my brother's Opel Vectra. These are silly differences that do not benefit the customers."

Not so sure about that!

[Saba]

Originally Posted by Simon

Not so sure about that!

I was thinking the same. Bob Lutz should check on here occasionally. Although sharing some parts with other models may increase the range of accessories and performance features available.

[CosmicSaab]

If you people are really concerned that we may no longer have expensive connectors that are exclusive to Saab, then you really just need to go find sometihng else to do.

Best I can tell, this could increase quality quite a bit because there will be more though put into the little things, and there will be more buying power. They could get better quality parts for less money now.

[CosmicSaab]

And oh yeah, I forgot; it sounds like this could help preserve the "Europeaness" of all of GM Europe, Saab, Opel, and Vauxhall. Soumds to me like they are trying to get all of the European operations to share parts with each other so that they won't have to with the U.S. ones to save on costs.

[Simon]

It doesn't bother me personally (I drive a Vauxhall Vectra ) but I'm sure it will bother a lot of die hard Saab fans...

[Willy Wonka]

What bothers me is that, from a technical point of view, it could be an excuse to more than standardize the innner workings, by actually using the same design. The physical interfaces can readily by standardized and quickly designed and modeled. But due the pressures that will be placed on the folks there, emphasis will be placed on having the same functions across product lines. Final result a big reduction in innovation.
It may be naive but I would like to see more r&d being used, bugs and all, rather than hoarded.
More than just a dash board and its software, just look at the cantelever design emanating from the roof pilars of most production cars. The same front and back, with both levers pointing forward. The affect is velocity dependent vibration dampening with a limit built in. So no matter what and how one places the rubber on the road, there's a built in limit across all lines. It's a double sided sword.

[SPG900]

Originally Posted by Willy Wonka

So now we know why the head of saab design left.

Michael Mauer started out there as the head of Saab design, but he later became head of GM Europe's Advanced Design studio in Sweden, which I believe was founded to control all of GM Europe's design (Saab, Opel, Vauxhall). I have no idea of its relation with GM Zurich though.

[CosmicSaab]

The more I think about it, the more I think this will be a better fate for Saab.

Really, lets face it, GM was going to integrate Saab design and development with someone. I would have prefered it be done so with Cadillac, but that would have never happened. They were going to be sharing more with Buick, Pontiac, etc. Since they are now being integrated with Opel (last I checked Vauxhell was just a name, they are just Opels), thy will be sharing parts instead. And the Germans still have some of the best automotive engeneers around.

This will be good - I think.

[wrp]

So Lutz thinks nobody will notice that GM puts the same super cheap parts in a low-end car as in high-end car? How can this possibly work when a low-end car is designed to last only maybe 5-10 years, whereas a high-end car is expected to last 10-15 years? Also note that Lutz implied that instead of Opel using better internal parts, that Saab will be using the cheaper Opel parts. And this is part of GM Europe's business plan???

[fabric]

Originally Posted by wrp

when a low-end car is designed to last only maybe 5-10 years, whereas a high-end car is expected to last 10-15 years?

Most people don't keep cars more than 10 years. But I"d argue even todays cheap cars will easily run past 10 years. I also suspect that things like wiring harnesses bear a very insignificant impact on a car's longevity. Regular maintenance and avoidance of problems with rust are probably more of a concern.

I think you guys are worrying too much about this. I'll bet the 3 series uses the same connectors as the 7-series, and I"ll bet they use the cheapest one that gets the job done. for stuff like this, there is a serious level of diminishing returns once you get past spending a certain amount of money.

[moronputz]

This move could go either way for Saab, but overall it's more likely to be positive (cost containment giving Saab a better long term future, outweighing the reduction in autonomy).

Look under the skin of any 9-5 or 9-3SS and you'll find plenty of GM gear.

For example, the 9-3SS uses GM motor and gearbox (with Saab head, computer, etc). All steel wheels are GM, many electrical components, tools, brakes, and the list goes on.

The 9-5 was based on the Opel Vectra (about 1995-2002) chassis, and the 9-3SS uses the same basic chassis as the current Vectra. Geez, even the NG900 used the Vectra chassis that GM killed of in the early 90s. Many of the chassis related components are interchangeable between these models.

Just remember that while GM may not build anything special in the US (here comes the arguements), some of their European designs are competitive.

Surely it is better to have Saab survive but use some hidden GM stuff rather than have Saab become simply a badge engineered version of somethign else (like 9-2X and 9-7X)?

Surely as long as the component quality is there, and the Saab "identity" and character, that's what matters most.

[wrp]

Originally Posted by fabric

Most people don't keep cars more than 10 years. But I"d argue even todays cheap cars will easily run past 10 years. I also suspect that things like wiring harnesses bear a very insignificant impact on a car's longevity. Regular maintenance and avoidance of problems with rust are probably more of a concern.

I think you guys are worrying too much about this. I'll bet the 3 series uses the same connectors as the 7-series, and I"ll bet they use the cheapest one that gets the job done. for stuff like this, there is a serious level of diminishing returns once you get past spending a certain amount of money.

I suspect you never had a car with a Lucas electrical harness.

[fabric]

Originally Posted by wrp

I suspect you never had a car with a Lucas electrical harness.

No, and I'll agree that if it's crap, it's crap. But parts from less expensive cars doesn't mean they are automatically crap. I imagine it's cheaper to use a good quality, reasonbly priced bit in all your cars, then it is to have, say, 2 different parts, one of lesser quality, one of higher, and distribute them in the appropriate cars.

Considering the overall reliability of cars today, i think manufacturers are moving in the right direction.

[Mattlach]

Things that customers don't see - and which don't affect brand identity - such as wiring, air conditioners and inner seat frames, should be engineered just once for the different brands, Lutz said.

"The cars are different in stupid ways," Lutz said. "No customer is ever going to get under the instrument panel of his Saab and say, this is an outrage, these are exactly the same wires as in my brother's Opel Vectra. These are silly differences that do not benefit the customers."

He has a point here.

These are good examples of parts that can and should be shared across brands....

My concern is when it gets to components that are more critical to th eperformance of the vehicle, like suspension designs, rack and pinion setups, and to a certain extent, even frames... and *gulp* engines...

[fabric]

Originally Posted by Mattlach

My concern is when it gets to components that are more critical to th eperformance of the vehicle, like suspension designs, rack and pinion setups, and to a certain extent, even frames... and *gulp* engines...

Well, the frames are the basis for platform sharing. If you aren't sharing that, then you are making different cars. As for the rest, well, they're mostly going to share that too. Engine, transmission, and the general suspension setup. The suspension has the most leeway for customization, but really, cars that are based on the same platform are really pretty similar. This doesn't mean they have the be the same. I've mentioned this before, but Ford apparently did an amazing job with the LS/S-type, and car reviewers have praised the job they've done in differentiating the overall driving feel of these 2. Not everybody is doing this, of course.

The way I look at it is, in a way you have more options. You know which cars have the same platforms, and will have similar qualities. you can pick the one that looks the best or has the options you want. If there wasn't platform sharing, you wouldn' have as many models in each brand, so you've have more truly unique cars, but probably less overall choice.

There would only be a Saab 900 right now without platform sharing. Or no Saab at all.

[mattrazzo]

Originally Posted by Willy Wonka

What bothers me is that, from a technical point of view, it could be an excuse to more than standardize the innner workings, by actually using the same design. The physical interfaces can readily by standardized and quickly designed and modeled. But due the pressures that will be placed on the folks there, emphasis will be placed on having the same functions across product lines. Final result a big reduction in innovation.
It may be naive but I would like to see more r&d being used, bugs and all, rather than hoarded.

I agree. One minor example (one of many though) is the Saab A/C in the 9-3SS. This is the best air conditioner I have every experienced. Better than my old GM900, my Land Rover, my old Honda, various friends cars I've ridden in or driven: Mercedes, BMW, Porsche (well the 911 A/C is pretty good too), etc. I'd hate for GM to say "Let's all standardize on Unit 226 from the Buick line. It's the least expensive to produce and provides 'adaquate' cooling." That's the harm in consolidation.

But for the most part this is good. Well good from a financial perspective, likely not so good for the product.