General Motors further streamlines its operations today, eliminating a 3-headed management approach to vehicle development and placing a single person in charge of product programs for each of the auto maker’s market segments.
The restructuring does away with the longtime position of vehicle line executive, as well as vehicle line director and vehicle chief engineer, consolidating those tasks under one executive chief engineer for each program.
GM estimates the change will wipe away an entire management level and eliminate roughly 20 executive positions globally.
“The realignment reduces complexity and drives single-point accountability for the execution of our vehicle programs,” Mary Barra, senior vice president-global product development, says in a statement.
“These changes allow the vehicle teams to focus on what they do best – develop industry-leading cars, trucks and crossovers that delight customers and deliver solid profit margins.”
The change reflects how much the auto maker has evolved in the years since its 2009 bankruptcy shed four brands, which reduced demands on GM management and presented an opportunity to begin dismantling the massive bureaucracy that had hindered its competitiveness.
A shrunken GM also has been able to focus more on operating as a global business, driving common practices and standards around the world – from finance to sales and marketing to product development.
“We are very clear about our vision and our priorities – to design, build and sell the world’s best vehicles,” says Renee Rashid-Merem, a spokeswoman for GM. “And part of that is putting in the structure to be more efficient and speed accountability.
“The previous structure worked in the old GM. We are a different business now.”
GM charges the new executive chief engineers with complete responsibility for their vehicle group, from the initial design sketch through production. Vehicle groups are defined by market segment, such as trucks and cross/utilities, and could involve multiple platforms.
The auto maker says their tasks include “defining the requirements of GM’s new vehicles to ensure they win in the marketplace, as well as understanding the competitive landscape and managing cost, quality and performance targets.”
GM has operated with the 3-executive product-program management structure since 2009, although the VLE position has existed since the late 1990s.
Dave Cole, chairman emeritus of the Ann Arbor, MI-based Center for Automotive Research and a longtime industry expert, says a smaller GM no longer demands a complex management structure and today’s changes could serve as motivation.
“You need change, it reactivates innovation,” Cole tells WardsAuto. “A company gets complacent if it remains static.”
Only time will tell whether GM’s latest shakeup in product development will yield results, Cole says, adding its ultimate success depends on who is appointed to the executive chief engineer spots.
“The real test is the execution and development of new products,” he says. “The key thing is the selection of the right people and someone who can coach them. Not a dictator, a coach. In that sense, the structure is not so important.”
Executive chief engineers will report to Doug Parks, who takes on the newly created position of vice president-product programs.
Parks previously headed development of all GM electric vehicles and served as global VLE and global vehicle chief executive for electric cars, including the Chevrolet Volt.
The changes are effective Aug. 1.
GM has gone under a spate of management shakeups since a massive realignment of its North American operations in 2010, including the installation last year of Barra to replace longtime executive Tom Stephens as the auto maker’s product-development czar.
Most recently, GM retooled management at its struggling European unit, Adam Opel, reassigning its top executive Karl-Friedrich Stracke and giving Vice Chairman Steve Girsky responsibility for restructuring. The unit since has added an interim CEO and replaced its chief financial officer and top engineer.
