GM declares war on duplication in Europe

General Motors is to bring its European engineering, production and design activities under central control in a bid to turn around
its lacklustre performance in the region.

General Motors is to bring its European engineering, production and design activities under central control in a bid to turn around its lacklustre performance in the region.

The world’s biggest automotive group’s three operations in Europe – the UK’s Vauxhall, Opel in Germany and Saab of Sweden – will be unified in a move likely to remove much of their existing autonomy.

Although the brand names will remain, engineering, design, manufacturing and purchasing – along with commercial functions such as finance and sales – will be co-ordinated from Zurich as GM declared war on ‘duplication and isolation’.

GM is anxious to reverse financial losses and a patchy sales performance in Europe. It hopes the shake-up will bring operational efficiencies and also sharpen its edge in the battle with rivals such as Ford and Peugeot-Citroën.

The company has brought in Fritz Henderson, who formerly ran its successful Asia Pacific operations, as chairman of GM Europe. He claimed employees would have to ‘recalibrate themselves’ to working for GM as a whole ‘instead of for an individual brand or country operation’.

The reorganisation has major implications for the firm’s product development activities. GM will create a Europe-wide design unit accountable directly to the company’s regional president rather than the engineering division as before.

GM admitted that its current set-up had proved lacking. ‘We have to be better represented in the newer product niches such as crossover vehicles and SUVs,’ said Bob Lutz, vice-chairman of product development.

‘To do that we need to become effective at spending our capital on product programmes.’

Lutz also said the centralised European teams would be heavily involved in GM’s global development operations. Its engineers in Russelsheim, Germany, will take the lead role in developing the second generation of the group’s Epsilon vehicle architecture.

Epsilon is a common platform for medium-sized cars such as the Vectra, which can be adapted to the needs of GM’s brands and markets around the world. The team in Germany will be responsible for the basic engineering of the next version of Epsilon and its common components.

GM insisted the move towards single teams would not undermine the distinctive character of the Vauxhall, Opel and Saab brands. ‘These are not mutually exclusive goals,’ claimed Lutz. The company wanted to be able to introduce products ‘without having to start with a clean sheet of paper for each and every component, each and every time’, he said.

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