GM Marks 500 Millionth Build, Plans Customer Givebacks

General Motors today celebrates the build of its 500 millionth vehicle globally, a production milestone unmatched in the industry and a manufacturing legacy credited with spurring global economies.

“Five hundred million is a staggering number,” says Dave Cole, chairman of the AutoHarvest industry collaboration network in Ann Arbor, MI, and former chairman of the Center for Automotive Research.

But behind the milestone, Cole offers, are the hundreds of thousands of people served by GM manufacturing muscle sprawling across 30 countries at a current rate of about 10 million builds annually.

“The essence of a free society is to move where and when you want, and 500 million vehicles provides that,” he tells WardsAuto.

There also is the element of job creation, because every manufacturing job at an OEM can be multiplied by a factor of 10, he adds.

“So for every job at GM, there are nine others at a supplier, or a restaurant or a local retailer,” Cole says. “It’s billions and billions of dollars. And then there is the wages paid, which support the families of direct and indirect GM employees.”

GM celebrates the milestone today at its Fairfax, KS, assembly plant, site of the 500 millionth build last year, a ’15 Chevrolet Malibu. GM CEO Mary Barra and GM North America President Alan Batey are joined at the plant by the automaker’s top manufacturing executives, UAW leadership and state and local officials in a ceremony that includes the announcement of a $174 million investment in the facility to build the redesigned ’16 Malibu.

The Fairfax outlay comes on the heels of GM last week announcing planned investments in U.S. assembly plants totaling $5.4 billion over the next three years to support a steady cadence of new products. It marks another step in the automaker’s remarkable turnaround from its 2009 bankruptcy, which in the years since has seen GM lay out $16.8 billion at its U.S. facilities.

However, the 500 millionth GM vehicle build is a global story underpinned by hundreds of customer experiences, strategic acquisitions and partnerships and continuous manufacturing innovation that has allowed the automaker to pump out cars and trucks at an ever-quickening pace.

GM plans to tell the stories of those customers throughout the year on digital and social media channels as part of a broader “500 Million Thanks” marketing program. Narratives include one about a Minnesota man still driving his ’57 Chevy pickup truck, acquired from a farmer 38 years ago for $75; an Opel owner in Germany whose car traveled extensively with her and her husband, including to Hawaii; and another about a Brazilian woman born in the passenger seat of a Chevy Chevette who remains loyal to GM today.

There’s also the story of a Chevy Captiva club member in Thailand who used a fleet of the 5-passenger CUVs to propose to his now-wife, and a young man in China so inspired by his Chevy Cruze that he customized his first car to match his personality, quit his job and started a retrofitting business to help other customers do the same to their rides.

At Fairfax, Barra offers the first thank you by surprising Iraqi war veteran and Purple Heart recipient Trent Brining with a key to a new Malibu. Production of the car begins at the plant later this year.

Brining, a Kansas native and retired Army corporal was seriously injured in 2005 while patrolling a suburb of Baghdad. He has undergone 23 surgeries to his arms and legs.

Brining, who credits his Chevy Silverado pickup for meeting his wife, is one of five customers around the world who will be notified within the next 48 hours that they will receive a new GM-brand vehicle built in their region.

Barra also announces that in the third week of May, all U.S. salaried and represented employees and retirees can share a one-time Customer Appreciation Discount with anyone.

“During 2015, we expect to sell more than 1,000 new vehicles per hour, 24 hours per day,” Barra says in a statement ahead of the event. “This adds up to nearly 10 million vehicles, the most in our history. I look at this extraordinary volume as 10 million opportunities to prove what kind of company we are and to say thank you.”

Global Manufacturing Might

GM’s 500 millionth build also reflects the automaker’s early globalization efforts. GM’s expansion into China dates back to 1908, when the then-emperor and his president took their first ride in a Buick. By 1931, GM had acquired Vauxhall in the U.K., Holden in Australia and Opel in Germany to extend its manufacturing empire to every corner of the globe.

In 1997, GM accelerated its interests in China with the Shanghai GM JV with local automaker SAIC. GM now operates 11 JVs in China, which has become the automaker’s largest market. GM production also is booming there, with planned assembly plants coming on line throughout the next two years to complement those already humming.

Former GM Chairman Jack Smith signs 1997 Shanghai GM JV.

To speed up output over the years, GM has continuously improved its manufacturing processes, employing industry firsts such as standardized volume production (1901); flexible mass production (1922); cost-saving and customer-appealing quick-dry paint (1924); the unified assembly line bringing all final vehicle assembly under one roof (1926); industrial robotics (1961); implementation of programmable logic controllers on factory machinery to replace labor-intensive relays (1969); industrial computer vision systems for the production line (1977); and standardized computer language for factory-floor machines to communicate better and improve the manufacturing process (1980).

GM also launched the first major assembly-line automation effort (1982); an unmanned parts delivery system to the assembly line (1983); highly flexible, programmable body shop tooling (2002); and the industry’s first certified, environmentally friendly manufacturing plant (2006).

The innovations helped GM reach 100 million vehicles produced in 1964, 56 years after its founding in 1908. A short 14 years later, the automaker passed 200 million global builds and 13 years after that it hit 300 million. It would take 12 years to make 400 million, and the latest mark comes after 11 years.

If global sales remain on trend, GM should reach 600 million units sometime within this decade.

Cole says that bodes well for a company strongly positioned in what has suddenly become an attractive industry to outsiders.

“One of the things you can’t get away from – and this is what’s behind companies like Tesla, Apple and Google being interested in the auto industry – is you can’t get along without manufactured goods,” he says.

“The iPhone has become a commodity,” he adds. “The tech industry has run out of gas and they’ve turned to something we can’t live without, and that is getting from place to place.”

The auto industry arguably has never been in better shape, either. After the restructuring of 2009 and 2010, U.S. automaker assembly plants are forecast by WardsAuto to run this year at a highly efficient and profitable 103.8% of capacity. That compares with 71.1% in 2008.

GM’s capacity utilization will expand this year to 89.1% from 68.4% in 2008, a  year before its historic bankruptcy.

“Now GM has a sustainable business, so long as they stay at the forefront of technology,” Cole says. “They are well-positioned for the future.”

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