General Motors Corp. is moving forward with its plan to hand off a major chunk of vehicle interior development to the industry's largest producers of passenger compartment creature comforts.

GM has picked Johnson Controls Inc. to design the interior of the next-generation GM minivans, which are scheduled to launch in July 2003. In the meantime, for the current minivans, JCI will manage the existing suppliers on behalf of the automaker, says Bo Andersson, GM's executive in charge of worldwide purchasing.

“The first step is to take today's vehicles and manage today's suppliers, but being the king of the hill,” Mr. Andersson tells WAW.

That doesn't mean JCI can unilaterally change suppliers for the existing minivans — an idea with far-reaching and unpleasant labor implications. GM will continue to make sourcing decisions and to issue purchase orders. JCI has a limited parts role with the current Chevy Venture/Pontiac Montana/Olds Silhouette.

In the long term, GM could hand off all or some day-to-day purchasing functions to JCI. And by the time the next-generation minivan launches, it is expected that JCI will play some role in helping GM decide which partsmakers will be sourced for the new vehicle.

GM, however, may have the ultimate say when deciding, for instance, on a supplier for key safety components such as seat belts or air bags, Mr. Andersson says.

JCI is the first such supplier selected for the program in which the No. 1 automaker attempts to let the interior megasuppliers take a clean-sheet approach to GM's lackluster interiors.

Mr. Andersson speaks often about the need for interior “harmony,” because the lack of proper oversight for a group of completely different suppliers can lead to a disjointed passenger compartment that lacks appeal or personality.

GM invited 10 interior suppliers to submit feasibility studies on ways they could improve sourcing, quality, engineering and design (see WAW — May ’01, p. 72). JCI came back with exactly what GM wanted.

“Some of the suppliers have not been coming back with enough smartness in how to do this, how to make 1-plus-1 to be 3,” Mr. Andersson says. “JCI was somewhat of a home run. This is not a matter of savings. This is saying: How are we going to do this?”

Mr. Andersson admits that the top-tier suppliers know interiors better than automakers because they specialize in them every day. He wants these companies to use their vast consumer research to identify “the dissatisfiers in the interior. JCI has a computer database like that for everything the customer thinks and what the benchmark is.”

Also in the running for similar work are Lear Corp. and Magna International Inc.'s Intier Automotive. Earlier this year, Mr. Andersson said Faurecia SA of France and Detroit-based Venture Industries Inc. also submitted feasibility studies for interior oversight, but he would not confirm whether they are still being considered. No announcements had been made by late June.

“I think one maybe is taking himself out. There's four left,” he says. “I think we're about to add two.”

At DaimlerChrysler Corp., purchasing chief Thomas Sidlik says his company will consider such a strategy “if it makes financial sense.”

As the general manager of Jeep Operations, Mr. Sidlik also notes that the new Jeep Liberty “probably is the furthest we've gone” in handing off significant interior work to suppliers. JCI, for instance built two new plants near Toledo North Assembly Plant to supply instrument panels and seats for the Liberty (see story, p.63).

General Motors

Purchasing by the Numbers

2001 Worldwide purchasing volume — $87 billion ($123 billion including partners Fiat Auto SpA, Suzuki Motor Corp., Isuzu Motors Ltd. and Fuji Heavy Industries Ltd. — Subaru.)

North American production suppliers — 3,052

Minority supplier purchases — $2.3 billion from 620 minority suppliers

Ideas generated from new Global Cost Reduction Initiative — 3,000