Interesting W body article from '86 (LONG)

[Justin]

GM10; history's biggest car program

Ward's Auto World, March, 1986 by Jon Lowell, David C. Smith

 

 

"What's new?' is a popular punch line at General Motors Corp. these days. So Lloyd E. Reuss just grins at the question as he strolls past carefully organized brown paper bags filled with documents stacked next to his secretary's desk. He's about to move from the sprawling GM Technical Center in Warren, MI, to GM's midtown-Detroit headquarters as a newly named executive vice president.

 

Gesturing at the sacks, he allows that he traditionally throws away as much paper as practical when he's promoted. His reasoning: Those who've written all that stuff keep copies of the truly important documents.

 

At 49, Mr. Reuss is a prime candidate to become GM's next president (see story p.64). But on this mid-February day, he's getting ready to vacate the office where he spent two years heading GM's huge Chevrolet-Pontiac-Canada Group, which, along with other awesome responsibilities such as launching the all-new Saturn car and franchise network by 1989, is charged with the biggest new-car program in automotive history: GM10, the front-drive, midsize W-body platform on which GM plans ultimately to build some 2-million cars a year in North America.

 

GM10 models will replace two current lines offered by all divisions except Cadillac --the aging, 1978-vintage, rear-drive G-body specialty coupes and the newer (introduced in 1982), front-drive, A-body family sedans (maybe their station-wagon version as well) (see table p.56). And the W-cars will enter an increasingly competitive up-scale market where 30% of all North American cars now are sold and where GM long has reigned supreme.

 

 

 

Contrary to widespread speculation among analysts, competitors and others, GM sources insist that GM10 has not been scaled down, nor will it be, and that GM's budget for the project still stands at a hefty $7 billion. In the same breath, however, they underscore that phase-in plans may be stretched out further than originally envisioned.

 

As the new chief of GM North American Passenger Car Operations, Mr. Reuss now commands both CPC and the Buick-Oldsmobile-Cadillac Group, which will share GM10 output. And whatever else may end up in Mr. Reuss's paper shredder, the nuts and bolts of the massive GM10 project are keepers. Scheduled for introduction over the 1988-'90 period, GM10 remains very much a big part of Mr. Reuss's domain, even though he's now one rung higher on the corporate ladder.

 

Besides its sheer size, GM10 is a dramatic undertaking for many other reasons:

 

GM Chairman Roger Bonham Smith has shaken his huge empire with massive reorganizations, stunning acquisitions and dazzling diversification moves, but his final grade may well hinge upon how GM10 performs in the marketplace. He reaches retirement age (65) on July 12, 1990, the year GM10 moves into high gear.

 

GM10 will be the first large-scale new-product program undertaken by CPC, one that naturally involves BOC deeply as a key component supplier as well as marketer of the finished cars. CPC and BOC were formed as "supergroups' two years ago to streamline GM's bureaucracy and wring out new efficiencies. But glitches remain.

 

"Creating the new groups was obviously a job that wasn't going to happen overnight --and it hasn't,' Mr. Smith admits during a February speech in Chicago. "The easy things were done early--moving around the boxes on the organization chart. Now comes the slow, grinding process of changing GM's systems and corporate style, and that's where the big savings potentially are.' GM10 clearly stands as a crucial test of Mr. Smith's supergroup strategy.

 

GM's historical dominance in--and reliance upon--midsize, high-profit cars is being challenged as never before. Shark fins multiply in waters where GM once swam by minnows with impunity, as midsize, midprice contenders at home and abroad-- especially new entries from the ever-aggressive Japanese--bare their teeth to feed on the broad $10,000-$20,000 segment where GM has dined so successfully for its bottom-line sustenance.

 

GM10 also becomes the focal point for new ways of doing just about everything, each potentially fraught with problems. Besides employing new manufacturing and assembly techniques that promise to make even its newest facilities a trifle dated--but also can lead to quality and other snafus--GM through the W-car project intends to use its potent leverage to gain manning and work-rule changes from the United Auto Workers union, just as it has done at other plants and as its competitors are doing. Indeed, some worker resisistance already is surfacing, although

 

GM10 becomes a huge proving ground for new ways of doing business with suppliers. Those who measure up to stringent quality and productivity targets got into the program early and stand to benefit mightily from the big volume stretched over perhaps eight to 10 years. Others fall by the wayside, failing to meet GM's tough bogies.

 

For the record, GM isn't saying precisely how large GM10 actually will be when the final scheme unfolds. But the car lines it's scheduled to replace represented 37% of GM's total 5.4-million North American car production in 1985, attesting to the fact that the midsize market is GM country.

 

Mr. Reuss provides some perspective: "It's our biggest, so I guess it probably is the biggest (in industry history). It's a group of replacement products for the heart of our lineup--the intermediate-size vehicles. As a result, it's going to be a high-volume series. It isn't just one vehicle, it's a whole series of vehicles with a lot of unique and distinct personalities.'

 

Put another way, GM10 alone calls for more than twice the cash Ford Motor Co. spent ($3 billion) on its largest car program to bring Ford Taurus and Mercury Sable to market last December. Measured by annual production, GM10 is four times larger than Taurus/Sable's 500,000 yearly capacity.

 

Some industry observers say that GM is blinking after taking a fresh look at the competitive environment and is downsizing the program--speculation fueled by GM's January decision to take its Arlington, TX, assembly plant out of the GM10 running, reportedly because of worker resistance to work-rule changes. But Mr. Reuss says it simply is not true that the program has been downsized. Timing of some models may change, he allows, but GM10 remains as big as ever envisioned in the first place.

 

Insiders hint that GM's strategy may have changed to phase in GM10 at a slower pace for two solid reasons: With tweaking, its A-body cars may remain competitive longer than anticipated, giving GM vital breathing room to make certain its plants and processes can deliver high-quality GM10 cars necessary to do battle against the burgeoning competition. The Buick, Oldsmobile and Pontiac divisions each plan major A-car facelifts for '88 to carry them over until '90, when each gets GM10 sedans. And there's even talk that some A's could linger after that, alongside the slightly smaller W-cars.

 

But make no mistake: GM10 is an automotive gorilla among a band of chimpanzees.

 

"There's so much at stake in the program,' says University of Michigan auto expert David E. Cole. "I'm not sure it was conceived with the same environment in mind that may be materializing. What we're into is just a vicious competitive situation where the customer is driving the market. With the variety of offerings available, I'm not sure there is the volume potential there that GM thought. I think they've been scaling back some of their expectations.'

 

Dr. Cole continues: "Even though I think they have developed some ways to achieve a major degree of uniqueness among product offerings of various divisions, it may not be sufficient considering what's happening to the market. It's just coming apart at the seams.'

 

How important is GM10? "It's the most important car program that GM has probably ever had,' says Philip K. Fricke, Goldman & Sachs Co. auto analyst. "I think GM has to be damned careful on planning too much capacity. It is their bread and butter, but there's a lot of competition there, and I think there's too much supply and capacity in the business. That's always been true in smaller cars, but it's extended up into the midsize cars.

 

"One of the critical things GM has to do is determine what the capacity is going to be. I don't see the competition limited just to the Japanese. I think there's a lot of competition coming from Europe,' he says.

 

David Healy, vice president and auto analyst at Drexel, Burnham, Lambert Inc., says his sources tell him the GM program is undergoing substantial midcourse changes. "It carried a $7-billion price tag at one point, which was bigger than Saturn ($5 billion) and all that, but it has had a tendency to shrink lately,' he says. "I think they've been paring it back. It's more like $5 billion. I hear they got a look at (Ford's) Taurus/Sable and said, "S--, they've done our W-cars two years before us.'

 

"They're now cutting on the size of the program and redoing a lot of sheet metal at the last minute so it doesn't look exactly like the Taurus and Sable. They seem to be cutting back a bit,' he maintains.

 

Adds Goldman Sachs's Mr. Fricke: "It's a challenge to both the marketing and styling people. GM has blown it, not only in terms of marketing, but in terms of styling. It will probably be the most significant new car GM has come out with. But Ford's marketing of Taurus/Sable has been nothing less than brilliant. The consumer has been prepared for the (rounded, aerodynamic) look. They built up an anticipation for the car. It's one of the best marketing efforts I've seen in the business.'

 

While privately conceding Ford has done a skillful job of selling it's new aero styling look, GM executives take considerable umbrage at any suggestion that it has been significantly outdistanced by Ford on the product front. GM's line is that Ford merely is catching up with its popular A-cars and will be scrambling again when the GM10 cars start appearing early in 1988.

 

One top GM executive admits privately, however, that "you can always learn from the other guy' and that Ford pulled off "some clever things' in designing Taurus/Sable--ideas GM still has time to incorporate in some GM10 models.

 

Scheduled to be replaced by GM10 first are three rear-drive G-body sporty coupes: Buick Regal, Oldsmobile Cutlass Supreme and Pontiac Grand Prix, all in 1988. Chevrolet Motor Div. follows in 1989 with GM10 successors to A-body Celebrity as well as G-body Monte Carlo. In 1990, the other three participating divisions get GM10 sedans, replacing the Buick Century, Olds Cutlass Ciera and Pontiac 6000 series --all front-drive A-bodies. Station wagons may come in 1991 (GM's existing midsize wagons are on the A-body platform), but that decision has not been made. In fact, some A-cars may continue side-by-side with GM10 models for a time.

 

GM Vice President/Buick Motor Div. General Manager Donald E. Hackworth confirms that Buick will have a GM10 coupe for the '88 run while retaining its Century A-car--albeit with an extensive restyling (new front and rear treatments plus interior changes, all exclusive to Buick).

 

At Oldsmobile Div., GM Vice President /Olds General Manager William W. Lane verifies that he'll also get a new GM10 sporty coupe in '88 to replace the bigvolume (190,000 units in 1985) Olds Cutlass Supreme coupe. Olds' A-body Ciera will remain at least until 1990.

 

Mr. Lane, for one, expresses no fear about rising competition in Olds' strongest market segment. "If there's more competition --and if you give buyers more choices --then if you do a better job, the better your chances are. I'm not worried about more choices; it gives you a better opportunity to sell.'

 

Chevrolet expects to get up to 400,000 GM10 models annually, weighted 60% toward sedans, says Donald T. Sullivan, manager-planning. He confirms that Chevy, for one, will drop its A-car when GM10 arrives in '89, but the Celebrity nameplate will be retained.

 

David A. Hansen, Pontiac Motor Div. director-product planning, says Pontiac's decision on carrying over the 6000 after GM10 sedans begin arriving hinges upon whether its A-car still is popular and upon GM10 capacity. But, he adds, the 6000 will contain numerous improvements such as optional antiskid braking. "There's enough difference between them (6000 and GM10) that we might run them both for awhile,' he says.

 

While public knowledge of the GM10 marketing strategy remains a tad nebulous, even fewer concrete details are known about the products themselves.

 

Mr. Reuss contends the GM10 cars will be dramatically different from current products and that journals such as WAW should be cautious about arriving at too many conclusions from spy photos or drawings of prototypes.

 

What WAW has determined from scores of interviews is that GM10 will slot in the 3,000-lb. (1,350-kg) class, about the same as the A-cars but several hundred pounds less than the G-coupes. They'll be slightly smaller in major dimensions than the A's and will feature extensive electronics and 1-piece, molded-foam seats.

 

Although styling of all GM10s will be aero, the entire concept is based on allowing divisions to use the platform to produce distinctive cars, an issue that is particularly sensitive at GM these days.

 

"That's an important part of GM10,' concedes Mr. Reuss. "We will have more uniqueness division-to-division than we've had on any product in the past. People will immediately realize this is different. It has the look of a much more futuristic project. One of the things the organization is working on is trying to get more market segmentation between the various divisions so that the old business of dropping the gauntlet and saying everybody gets everything coming out of the chute are gone.'

 

One area where GM divisions will try to make a distinctive mark, beyond styling, is engine options. The list gives everyone a chance to dance to his own music: Chevrolet apparently will offer at least two choices, an advanced 2.8L V-6 with aluminum heads and manifolds and yet another updated version of GM's 2.5L 4-cyl. workhorse. Oldsmobile hopes to have its new 2.3L Quad 4--a 150-hp 16-value 4-banger--as an exclusive for the '88 GM10 coupe (it's already earmarked for N-body Calais compacts that year) and for '89 plans 185-hp and 250-hp Quad 4 spinoffs, the latter turbocharged, Olds Chief Engineer Theodore N. Louckes tells WAW.

 

As new as the cars, say GM executives, is the way the project is being put together.

 

"The product itself may be less significant than the way we're going about it,' says Gary W. Dickinson, a GM vice president and CPC group director-engineering. Mr. Dickinson was the first GM10 program manager.

 

"It's a brand-new program-management approach that was initiated with the GM10 program. It's really a business approach to managing the introduction of a new-car program. It's not a project center (traditionally centered around engineers). This is a management center where all the functions are represented. All the disciplines. Everybody is located in the same building --product engineering, process engineering, the assembly folks are represented, the financial people, the quality assurance group, purchasing, marketing,' he says.

 

David D. Campbell, also a GM vice president and CPC group director-operations as well as a member of the board of New United Motor Manufacturing Inc. (the GM/Toyota Motor Corp. venture), admits some Japanese management-style influence may have crept into GM10 by osmosis.

 

"What you were dealing with in the past at General Motors was an elephant,' he explains. "You've got big organizations --Chevrolet, Pontiac, engineering, finance. So what you do with a PDT (product-development team) is take a piece out of all of them and put them together in a little group. You give them the authority and the responsibility to make a good decision.

 

"In the past, we'd have big groups of product engineers, big groups of process engineers, and a group of financial people and so forth. Now we have them in small groups and they can do the job just once. They're all there at the beginning. It's a way of smalling-down the organization.'

 

Little publicized to date is the fact that GM10 will mark the death of the traditional assembly line at GM. There will be no traditional conveyor made legendary by Henry Ford. In its place will be automatic guided vehicles (AGVs), supplied by Sweden's AB Volvo, that follow wire paths embedded in the floor.

 

"The process for GM10 will be so new it will startle you,' says Mr. Campbell. "Plants like Orion (MI), Wentzville (MO), and Detroit/Hamtramck will become dated now. What we've learned there, we've now applied to GM10. The beauty is all of the operations now can become nonsynchronous. If you have a car that's heavily loaded with options, it can stay at a station for however long you decide you want it at that station. Other cars can go right around it.

 

"Those lightly loaded cars that don't take a lot of things like air conditioning and Bose radio systems just bypass that station. Every operation can be tuned to the worker so that (he or she) can spend more time on those operations that require more time. The worker can become more involved in the assembly process. It's really a radical approach to the assembly process. It gets rid of Henry Ford's conveyor chain for the first time,' he explains.

 

GM10 also demands changed relationships with suppliers. No longer will there be, as one GM executive describes it, "three bids and a cloud of dust.' Practically all the bits and pieces going into GM10 cars are brand new, and most have been single-sourced with the suppliers participating from the project's very early stages.

 

"We decided way up front we were going to bring the suppliers on early,' says Mr. Dickinson. "We weren't going to double-source. We trusted the product-development team to make major sourcing decisions. Then we went ahead and issued a letter to the supplier. We brought him in and said, "Sit here and help us develop this instrument panel, develop this wheel.''

 

The dramatic departure from multiple bids and keeping suppliers in the dark has had its share of controversy. In at least one case, a supplier who objected because it was not invited to bid on GM10 quickly backed off when the project-development team described in painful detail why it had been bypassed.

 

"We gave the teams (some 72 on GM10) criteria for source-selection,' says Mr. Dickinson. "We said the No. 1 criteria is quality. Those teams went out and visited the sources who were potential suppliers. They looked at their past record for parts quality. The looked at their process. And they made decisions based on that.

 

"The second criteria was performance: How well had they lived up to prototype, pilot and production schedules? If they had problems, what had they done to assure we wouldn't have the problem again. Finally, we had an agreement on a target cost; this is the best price you can get. The suppliers agreed to that before we signed them up.'

 

GM also went to considerable lengths to maintain security on the GM10 project because of the early involvement of outside suppliers. A memo was circulated to suppliers cautioning them that any conversations with the press should first be cleared by GM. At least one memo had a handwritten postscript, warning that WAW was working on this story.

 

But at least the suppliers who won contracts for GM10 like the new approach, even if they can't talk on the record about it. "It has been needed in this industry,' says an executive of one. "It's beneficial to everybody. We used to have a maximum of 18 months to two years. Now we're working on projects out to 1990. It greatly helps our planning and our ability to cut our costs.'

 

The UAW also has been involved almost from GM10's inception, and production workers have participated on numerous project development teams (see sidebar, p.61).

 

"We don't have any major problems at this point,' says a UAW official involved with GM10. "This is a business that's changing very fast, and we want to be part of the solution, not part of the problem.'

 

Blue-collar GM workers from Fairfax, KS (where the only formally announced GM10 assembly plant is under construction) and other GM sites have built GM10 prototypes themselves instead of an outside special shop, an apparent first. Suppliers also are responsible for providing their own prototype pieces.

 

"Probably the most dramatic signal (of UAW involvement) is that assembly plant people are putting together the prototypes,' says Mr. Dickinson. "Obviously the prototype process is a learning process. We want to prototype not just the product but the entire process of putting it together. The hourly people are putting the prototypes together. That's again a totally different way of doing business. The input from them is invaluable.'

 

One area in which GM10 won't make any major new waves is materials usage. Sources say that while there may be some increase in plastics and other new materials, the staggering volumes involved make it impractical, at least short-run, to use massive amounts of plastic body panels and the like. The facts, says a GM engineer, are that nobody is geared up to produce enough pieces.

 

While GM isn't talking for the record currently, initial plans apparently call for one line at Fairfax, one at Doraville, GA, and two at Oshawa, Ont., Canada. Oklahoma City also is a frequently mentioned possibility. Early reports had GM looking at as many as nine GM10 lines--including Arlington. But that may have reflected a full-scale changeover rather than a phased-in approach.

 

"GM10 covers a lot of different vehicles with a lot of different personalities,' Mr. Reuss observes. "Some vehicles GM10 is going to replace are being kept a little longer. Some vehicles are being changed around as to how they fit into a niche. It's a continual iterative process.

 

"It isn't like the old days where we said we were going to build X-number of plants and X-number of cars--go out and let 'er go. Then we'd come to the marketplace, and we had too many or too few. We're designing these products, and then, as we go through changes in the product plan, a lot of speculation on the inside and outside takes place. That's why you hear all this business about how many plants and when we are going to introduce them--because we are continuously going through iterations.'

 

Mr. Reuss continues: "Regardless of what point in time you're looking at, GM10 is the largest we've ever done in numbers of models or total volume. Now we aren't going to go out and throw the switch in one day and have all the plants start up. We are working through a deliberate process.

 

"All this speculation--is it up or down? All we're doing is adjusting time-frames, number of models, when, and that kind of thing. That's going to continue to change as we go into production. The total program, once we get everything done, is still as big as it was to start with.'

 

A source at a major competitor questions exactly how much GM10 can be changed at this late date, regardless of production-line innovations. His company, he says, is "locked in at three years; you can't make major changes.'

 

What constitutes major change is obviously open to debate, but GM brass clearly feel flexibility is a key strength of GM10. Beyond that, Mr. Reuss reminds that GM's A-cars still are lively performers.

 

"Our A-cars are more successful than some people thought they would be two years ago,' he says. "We're now running six A-car plants with two shifts, wide-open throttle with overtime, and we're still not really testing the A-car market. They're the strongest cars in the market. You want to be careful going in and pulling those out too soon.'

 

But there's also a tinge of excitement in his eyes as he looks ahead to the GM10 launch that kicks off the auto industry's biggest new-car project ever. "10 is a winner,' he confidently predicts. "We haven't had a lot of frustration. These are darn nice cars. We're obviously pretty bullish. And we're on schedule.'

 

GM, you can be sure, won't give ground without a no-holds-barred fight.

[ns87]

Very nice find. My fav quote

Adds Goldman Sachs's Mr. Fricke: "It's a challenge to both the marketing and styling people. GM has blown it, not only in terms of marketing, but in terms of styling.

 

Also, I didn't know Saturn was around in the 80's

[Brian P]

With tweaking, its A-body cars may remain competitive longer than anticipated, giving GM vital breathing room to make certain its plants and processes can deliver high-quality GM10 cars necessary to do battle against the burgeoning competition. The Buick, Oldsmobile and Pontiac divisions each plan major A-car facelifts for '88 to carry them over until '90, when each gets GM10 sedans. And there's even talk that some A's could linger after that, alongside the slightly smaller W-cars.

 

You don't say?????

[mfewtrail]

I read that a while back when I found it on some random google search. Too bad they didn't throw that 250hp quad 4 in several of our cars...

[Grand Moff Joseph]

Nice article, but I have to ask myself what GM was thinking when they decided that less than 150hp was enough to adequately move ANY W-body....

[GP1138]

Very interesting read!

 

1-piece, molded-foam seats.

 

What's that again?