GM Sees More N.A.-Sourced Parts Ahead for Asia-Born Chevy Sonic

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CAR Management Briefing Seminars

TRAVERSE CITY, MI – General Motors will source more parts from North America for the Korea-developed Chevrolet Sonic small car after its U.S. production launch hits full speed, manufacturing engineering chief Ken Knight says.

“I don’t think the footprint of the supply base for the vehicle will stay the same as it is today,” Knight tells Ward’s on the sidelines of the Center for Automotive Research’s Management Briefing Seminars here.

The Sonic, a ’12-model B-segment replacement for the Aveo in the U.S., started regular production at GM’s Orion Twp., MI, assembly plant some 30 minutes north of Detroit earlier today.

Sonic pricing starts at $14,495 for the sedan.

The car owes its development to GM engineers and designers at a South Korea nerve center, using the Gamma platform underpinning many of the auto maker’s products in the Asia/Pacific region.

As the launch market of record, much of the content comes from there. Knight declines to specify how much.

“Quite a bit,” is all he’ll reveal, but as with other global GM products more local parts will come online as production increases to ease the logistical difficulties associated with a long supply chain.

“(Managing) inventory levels is a challenge,” he says. “As you launch you find things you need to change, and you’ve got a supply chain with a lot more inventory in it.”

Knight says GM on schedule to ship salable Sonics in volume to dealers in coming weeks.

Nonetheless, Knight says Sonic will hit full line speed on target early next year, and he stands by GM’s decision to be the only auto maker building a subcompact vehicle in the U.S.

GM won a 2-tier wage rate at Orion to help make it possible to build the small car profitably. About 40% of the plant’s 1,700 workers earn half the typical United Auto Workers union wage.

“We look at all the implications of the logistics on product,” adds Knight, executive director-Global and North America Manufacturing Engineering at GM.

As it stands, Orion has more suppliers directly onsite than other GM assembly plants, he notes.

Knight also stops short of detailing production numbers but says GM remains on schedule to ship salable units in volume to dealers in the coming weeks.

Later this year, the Orion facility launches production of the Buick Verano, a luxury-leaning C-segment car also owing its original development to the Asia/Pacific region.

Knight throws cold water on the idea of a trend at GM toward launching vehicles in markets outside the U.S. to iron out bugs prior to release in its most-profitable home region.

Besides Sonic and Verano, the Malibu first will launch in the Asia/Pacific before coming to the U.S. The new-for’11 Buick Regal began as the Insignia in Europe.

“We have product homerooms in different parts of the world, and ideally you would like the homeroom to be the first region to launch the new product, to be the resource for problem-solving (and) working with suppliers,” Knight says.

Product cadence plays a role, too, he says, with product planners determining the right vehicle for the right market at the right time.

Knight offers an optimistic evaluation of the global parts-supply base that, like auto makers, downsized during the recession and now faces difficulty ramping production back up as demand returns.

“We shed capacity, and so did suppliers,” he says. “Just about as rapidly as the contraction occurred the market is starting to come back and so suppliers just like us have to adjust their resources and plans to accommodate the demand.

“So far, so good.”

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