General Motors Corp. inaugurates its innovative and long-awaited “Blue Macaw” small car manufacturing facility in Gravatai, Brazil, a plant that company officials say promises to be the most lean and cost-efficient in the world.

The operation replaces the traditional component development cycle with a co-development process between GM and its systems suppliers, cutting costs and improving quality by allowing supplier participation up-front in the development of a vehicle.

Supplier system modules are incorporated into a production system that mixes advanced sourcing and logistics methods with state-of-the-art technology. “What is different is that we have created much deeper bonds here,” says Sten Sorensen, president of VDO do Brasil Ltd., of the cluster supplier system's relationship with the automaker.

VDO, recently bought by Siemens AG, is a major supplier in the project, with an investment of about $28 million in a greenfield operation to build cockpit modules for the new Chevrolet Celta (pronounced Sell-tah) economy car to be produced at the plant.

Celta is GM's ideal small family car for emerging markets in South America, as well as India, China and Malaysia. GM is mum on pricing, and rumors range from $4,000-$5,000 to $7,000-$9,000.

GM expects to sell 30,000 Celtas this year and hopes to add a second shift next year to bring annual production to 120,000 units. The plant employs 2,100, but could add another 1,900 at full capacity.

What's also different is that VDO is designing the cockpit from the get-go and is overseeing designs by other component makers to meet specific needs of the module. “You want enthusiasm from your end customers,” Mr. Sorensen says of automakers. “But in this case, you also have enthusiasm from the suppliers. This is a unique experience by GM. It's very surprising. I would say GM is a conservative company. This is a bold move.”

The $600 million (including supplier, government investment) Blue Macaw assembly complex “is a major step forward in the way automobiles are built,” says GM Chairman John F. Smith Jr., on hand for last week's ribbon-cutting ceremonies.

Engineers, economists and business leaders from around the world “will be watching closely what we do here at Gravatai,” Mr. Smith adds. “They will be studying it; they will be learning from it and they will be adapting it to their own operations.”

Referred to locally as an “industrial condominium,” the site serves as a campus for 16 world-class suppliers that have joined forces to create an extremely efficient automotive complex that functions as one single plant.

GM's best global practices, plus 75 years of experience in the Brazilian market, were studied in devising the manufacturing model.

The Blue Macaw assembly plant receives pre-assembled modules delivered just-in-time by resident neighboring suppliers. Every element of the complex is designed for increased efficiency, including the physical location of each player in the process. Among other major suppliers are Delphi Automotive Systems, Lear Corp. and Goodyear Tire & Rubber Co. GM says the supplier team represents 60% fewer suppliers and 50% fewer parts than would be necessary in a traditional manufacturing system.

The automaker had hoped to use Blue Macaw as a blueprint for plants in North America, but labor unions objected, fearing job losses. Some of its processes are expected to be adopted in the U.S., however. And the basic T-shaped plant layout is being copied for GM plants worldwide, including the new Cadillac Catera plant under construction in Lansing, MI (see Ward's Automotive Reports — Jan. 31, '00, p.1).