General Motors plans to more than halve the number of its vehicle platforms by 2018, the company said.
Global production chief Mary Barra told analysts at the GM Global Business Conference in Detroit that cutting the number of platforms will trim costs and increase the quality of the company’s vehicles, Reuters reported.
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In 2010, GM built on 30 platforms while 31% of its vehicles were built on “core” platforms, Barra said.
By 2018, the number of platforms will be cut to 14, and 90% of GM vehicles will be built on “core” platforms, Barra said.
That 90% “allows us to have a much more efficient investment in each of these vehicles, and it also delivers higher quality, faster-to-market” cars and trucks, Barra added.
Ford has been successful using this strategy on launches of compact and subcompact cars in the past year.
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By GlobalDataDiana Tremblay, GM’s global manufacturing chief, said that the company will get 80% of its additional production above current levels to the end of 2015 from low-cost, developing countries such as China, India and Russia.
Tremblay said GM “is not ignoring” developed, higher-cost regions such as the United States, western Europe and Australia for production, Reuters noted.
GM earlier this year announced that it would spend US$5.5bn over two years to upgrade production plants in North America.
Tremblay said GM has, without adding another plant, the ability to meet a US auto market of 16m in annual sales, a level not seen since 2007.
“We sized ourselves in order to meet demand if the market goes back, when the market goes back, to 16m” in annual US auto sales, Tremblay said.
CEO Dan Akerson reiterated the company’s expectation that US auto sales will finish 2011 near 13m vehicles.
Last year, GM’s capacity utilisation at its US plants was 90 percent, Tremblay said, and is expected to reach 98% to 99% by the end of this year.
Tremblay said it can run at 133% of production capacity in North America if a third shift were added to each of its plants. Doing so would allow GM to meet market demand for 16m in annual US sales, she added.
Using overtime for factory workers can bring GM’s capacity utilisation to 150%, she said.
Rather than build a new plant, GM is likely to reopen its [former Saturn] assembly plant in Spring Hill, Tennessee if US demand increased beyond the company’s ability to use three shifts at its plants, Tremblay said.
But she also said that there is not enough demand now to reopen Spring Hill.
Since 2005, GM has taken out 1.5m in annual production capacity in North America, largely by closing plants, and has reduced US labour costs by $11bn, Tremblay said, according to Reuters.
