General Motors is planning to announce a restructuring of its European vehicle making operations this week to shift power from its underperforming Opel, Vauxhall and Saab divisions to its Zurich regional headquarters, according to the Financial Times (FT).
The FT said the restructuring is designed to centralise control of manufacturing and product development, and to cut overlapping engineering projects and improve efficiency.
The financial daily noted that GM Europe lost a higher than expected $US116 million in the first quarter this year, almost double the loss in the previous year, and the company reportedly says it is in danger of missing its target of bringing this below $100 million.
The announcement, which one insider reportedly warned could be delayed until next week, will also involve the promotion of Carl-Peter Forster, head of Opel, to chief operating officer of GM Europe – no job losses are expected as part of the plan, although tighter integration could lead to some overlapping jobs going eventually, the FT said.
“We want a culture shift,” one source told the paper.
The Financial Times said GM’s Detroit head office has been growing increasingly frustrated at the failure of the European operations to integrate manufacturing and share components between the operations – there has been particular criticism of Saab, which until recently insisted on developing vehicles and manufacturing processes outside the global systems.
Opel’s refusal to integrate fully with the Global Manufacturing System – which originated from Opel but was further advanced in the US – reportedly also caused concern.
The FT said the plan was developed by Bob Lutz, group vice-chairman while he was temporarily running the European business before the arrival at the start of this month of Fritz Henderson – it has caused concern among German labour representatives on Opel’s supervisory board.
Lutz reportedly cleared out the Opel management board a month ago with the exit of the directors of marketing and of communications and the retirement of the head of manufacturing.
According to the Financial Times, the insistence on tighter integration between the three brands mirrors GM’s global approach – the company is trying to introduce Japanese concepts of lean manufacturing and continuous improvement to all its factories by the adoption of a standardised production system.
It also reportedly wants vehicle designers to use common parts, chosen from a library of components Lutz likens to a Lego set, in order to reduce development costs.
Forster’s replacement at Opel will be Hans Demant, currently head of manufacturing for GM Europe, the FT added.