TRAVERSE CITY, MI – Global Engine Alliance LLC is delivering better-than-expected returns for its investors – DaimlerChrysler AG, Hyundai Motor Co. Ltd. and Mitsubishi Motors Corp.

For DC alone, the savings are more than $100 million per year when compared with its own engine manufacturing facilities in Mexico.

Through the use of global sourcing and the development of common manufacturing systems shared by the three auto makers at the three engine manufacturing facilities that make up the alliance, savings are adding up fast, says Bruce Coventry, president of Global Engine Manufacturing Alliance LLC, which runs the alliance’s Dundee, MI, plant.

“We utilize an efficient investment strategy: We didn’t buy a block line, we bought three block lines, utilizing the best engineering inputs from Mitsubishi, Hyundai and DaimlerChrysler,” he tells attendees at the annual Management Briefing Seminar here. “We also for the first time bought standard machining centers, which significantly reduce capital and program lead times.”

Global Engine Manufacturing Alliance President Bruce Coventry.

Coventry says the alliance also benefits from “open-book pricing” between the partners, allowing each to identify suppliers that can provide the highest quality components at the lowest-possible cost.

He says the development teams are working toward a “commodity” mentality in terms of manufacturing, taking a page from the computer manufacturing business, eliminating the need to develop brand-specific engines.

Coventry admits this is counter to the conventional wisdom of the industry, in which many manufacturers have been concentrating on building engine brands – such as Chrysler Group’s Hemi, General Motors Corp.’s Northstar and Ecotec and Ford Motor Co.’s Triton engine lines.

“People buy cars, not engines… unless your name is Hemi,” he says.

The new thought process allows the partners to look beyond the basic gasoline engine to begin considering compressed-natural gas and direct-injection gasoline derivatives that can be developed for future applications.

The partners also had to develop new systems for communicating technical information across language borders. Alliance partners worked with Parametric Technology Corp. to develop Windchill Product Lifecycle Management software that links all three auto makers electronically and provides them with a single method to manage common engineering documentation. The system provides data vaulting and management of all manufacturing information for the entire alliance.

Coventry speculates the future for Global Engine could include sales of the engines to third-party auto makers outside the alliance.

“There are solid opportunities developing for sales with third parties and in emerging parts of the world,” he says. “(The) world engine, we expect, will be a big player in the mix of fuel-efficient powertrains around the world.”

Coventry also provides some insight into Dundee’s operations, saying the plant will operate on a 3-crew, 2-shift, 120-hour weekly schedule when it begins production in summer 2005. Crews will rotate on a 3-week swing.

kekelly@primediabusiness.com