General Motors continues to push to get its divisions throughout the world to share as many resources and processes as possible and eliminate duplicate efforts
The most recent example was the merger of GM's powertrain units. The company also wants to produce its products at the lowest cost and get them to market as quickly as possible.
General Motors Chairman Jack Smith was interviewed by reporters Kathy Jackson and Edward Lapham on 30 October at the company headquarters in Detroit.
How are things in Europe?
It's looking better. We're about to launch a very important car -the Astra - in April.
What about the disagreement between Opel and GM International?
That's probably significantly overstated and even quite misleading. The fundamental problem is a resistance to get lean in Germany from the unions, and there is some resistance to move to global platforms. But all the competition is doing that, and we've got to do that.
Most of GM's sales have been in the USA. Where do you think the mix of sales will be in the future?
We're predicting by the year 2005 that 50 percent of our unit volume will come from outside the USA. It's about 37 percent now.
Clearly the growth will take place outside of the mature markets like the USA, western Europe and Japan. They will take place in central Europe, Russia, Asia, Latin America.
You have about a third of the market now in the USA. Do you consider that good?
We would clearly like to do better than we're doing. We have a strong base here and we will protect that base.
How much market share can you realistically expect?
We don't concentrate on that. What is very important to us is that we get our products right and keep them fresh in the marketplace. Some of our cars have got some age on them in the past, and we don't want to do that.
And we're now in a position where we can ride through a downturn and continue our product program without halting programs. What hurt us badly in the 1990-91 downturn is we stopped programs. That's a terrible waste of resources.
Will there be another downturn?
I don't think the cycle is over.
The dynamics in the marketplace have really changed, and it looks like we can run much longer cycles than in the past without triggering inflation because you can't get a price increase. At the moment the economy is incredibly strong, and we're late in the cycle. I don't think anybody would have thought that the cycle would go this long.
Do you have too many plants in the USA?
We're in pretty good shape. We've gone through periods where we've had excess capacity. That has been eliminated for the most part. So it's really not a fundamental issue.
So there may not be the need for immediate plant closings?
There is nothing that I can talk about.
Why did you go common with your powertrain units?
We don't want to do a similar size engine in two different parts of the world. You can't afford to do that. So Europe will do the small engines, The USA will do the large engines, diesel engines in Japan, turbocharging at Saab. We're not talking about eliminating jobs.
What might be your next common move?
We try to go common with systems and processes globally. Information systems, for example, need to be common. We have a lot of work to do on that. Our purchasing is common; stamping is moving that way. It's not there yet.
How do you feel about brand management? Is it working?
I feel terrific about it. It has really focused the company on the products it produces. There is ownership for the car line and the profitability of the car line that we haven't had in the past.
Can you point to a success story?
The Pontiac Bonneville, which is in the latter stages of its life cycle. The brand manager has done a terrific job. The car is selling well. The end of the cycle is where we forgot about cars in the past.
You have so many divisions. Could you place sport-utilities within all of them and keep them different?
Maybe there is something that we're not offering that can be better than what is out there. Innovation must really hit the truck-type markets in my opinion.
Jack SmithHow are your costs now?
In some areas we are leading, such as in purchasing. In our plants we are not leading. We are closing the gap with the domestic competition, but there are still wide gaps with the Japanese competition.