General Motors Corp.’s “cost of risk has gone down dramatically,” says David E. Cole, director of the Center for Automotive Research in Ann Arbor, MI.

Founder and leader of the annual Management Briefing Seminars in Traverse City – which runs this week – Cole is a longtime GM watcher. His father, the late Ed Cole, was GM’s top “car guy” in the 1950s and 1960s, and he retired as president in 1974.

Cole says GM can afford to put more money into new vehicles because its plants now are more flexible and require less capital investment, its tooling costs have been slashed by two-thirds in the last five years, and its product-development processes are becoming more efficient.

“So the same money can do a lot more, and I think this will accelerate,” he tells Ward’s, in effect reducing the risk of developing new products.

Dave Cole says GM stretches product-development dollars much farther than it used to.

He says GM moved in the 1990s toward so-called “functional build” as practiced by Toyota Motor Corp. and other Japanese auto makers. This strategy is based on the idea that “perfect parts and perfect systems” create greater efficiencies and higher quality – both critical to long-term competitiveness.

Cole says that under Bob Lutz, vice chairman for product development, GM fundamentally has reduced snafus in bringing out new vehicles. (See related story: GM’s Bob Lutz: Three Years and Counting)

“The engineering process was very good, but the problem was bringing a concept to where you can produce it,” he says. “It was very analytical the way it was (pre-Lutz); it was study, study, study. Bob’s approach was to streamline the process dramatically by attacking (GM’s) bureaucratic mentality. Design was not center stage, and now it is.”

One of Lutz’s challenges is to turn around Saturn Corp. by improving its vehicles and expanding the lineup.

Cole stops short of saying Saturn, which debuted in the early 1990s, was a mistake. “GM probably would not do a Saturn now,” says Cole. Those billions, he says, “probably would’ve been invested in Chevrolet” in today’s automotive climate.