Corp. is betting a half-billion dollars that the auto industry will keep on trucking into the next century.
Top executives, on hand for April's official opening of the company's new truck engineering center, located in a radically renovated 69-year-old assembly plant in Pontiac, MI, predict the truck sales boom will continue -- not only in North America, but worldwide.
GM demolished and rebuilt nearly three-quarters of a 4 million-sq.-ft. assembly plant in constructing the truck development center. Centerpoint, as the complex is being called, is expected to help GM cut its truck development time, which can range from two years to more than four, by 20%-30%.
"In North America, truck sales growth continues at a pace that amazes everyone in the industry," says GM North American Operations President G. Richard Wagoner Jr. "Who would have thought that trucks would someday account for nearly 45% of total U.S. (light vehicle) sales, as they did in the first-quarter of 1996? The explosive growth of the truck market may be the biggest story in our industry (during) the '90s, and it's not over yet."
By the end of this year, GM will have increased its North American truck capacity by a third since 1993, Mr. Wagoner says. GM expects trucks to account for 50% of its North American sales "in the near future," up from about 40% today.
In addition, 34% of GM's global vehicle sales -- or 2.8 million units -- are now trucks, up from 20% 15 years ago. And while another 1 million units of truck sales growth is forecast for North America over the next 10 years, Mr. Wagoner says, the truck market outside North America will swell by more than 50%, to 12 million-plus units by 2005.
"This is an unprecedented opportunity, and we are responding to it," says GM Chairman John F. Smith Jr.
The new $500 million development center, claimed to be the first truck-dedicated engineering facility of its size and scope in the world, brings together under one roof some 12,000 workers formerly scattered around several southeastern Michigan facilities.
The center, located on a 650-acre campus that includes a separate product development test lab, a truck validation center and an assembly plant, is responsible for the development and production engineering and validation of all GM's rear-drive truck platforms, including its collaborative efforts with Japan'sMotors Ltd. and Sweden's AB Volvo.
The high-tech facility also should help lower costs by reducing the number of prototypes made during the development process. GM's truck operations averaged 1,800 prototypes per year in the past, but is now trying to cap that at 1,500 annually. GM is targeting "significantly lower" numbers in the future.