One-Stop Cockpits

All right, all you interior megasuppliers begging for responsibility for the entire passenger compartment of a vehicle — now's your chance.

This month, General Motors Corp. will name five suppliers as “lead interior integrators” to manage the sourcing of interior parts for every North American vehicle that GM produces. GM invited 10 suppliers to write feasibility studies on ways that they could improve sourcing, quality and parts harmonization and, on future programs, engineering and design.

Five of the 10 submitted feasibility studies, and GM planned to announce the results of those studies in early May, says Bo Andersson, GM's executive-in-charge of worldwide purchasing. The five suppliers are Johnson Controls Inc., Lear Corp., Magna International Inc. (see sidebar below), Faurecia SA of France and Detroit-based Venture Industries Inc.

Based on the study results, GM plans to assign each supplier to separate platforms, and the supplier will assume day-to-day purchasing of parts for those vehicles. Despite the shifting of this work, downsizing is not expected in GM purchasing. Instead, GM will assume an “overseeing and benchmarking” role, a spokesman says. Some GM engineers will now begin working more closely with the lead suppliers.

GM doesn't want to deal with multiple suppliers of interior components. Instead, it wants a handful of Tier 1s to take a program management role, to be more integrated with GM's overall vehicle development process and to achieve faster time to market and lower cost. Mr. Andersson says it's too early to estimate GM's savings, but that the strategy makes good financial sense for the suppliers as well.

“Typically it takes a long time for engineering changes at GM. It's embarrassing,” he says. “This is a tough thing for suppliers to do, but I'm very impressed with what they're doing. They have so much consumer data on our own products.”

Now, the suppliers have to deliver. If they can meet cost and efficiency targets in purchasing parts for existing platforms, they will have a front seat in designing and sourcing interior systems on next-generation vehicles, Mr. Andersson says. That doesn't mean one company would produce every interior component in the vehicle; it may find a better price for some components from a competitor.

Suppliers have been pitching the “complete interior” concept to the industry for several years, and JCI and Lear have made major acquisitions (and smaller ones, too) in pursuing the strategy.

A lesser known European player is Faurecia, whose acquisition last year of Sommer Allibert's automotive business for $1.2 billion makes it highly competitive in complete interiors, with seats, cockpits, door panels and floor systems.

Noticeably absent from the list is Delphi Automotive Systems, which had been an internal supplier to GM until its 1999 spinoff. Having sold its seating, interior lighting and some trim business, Delphi is less interested in supplying complete interiors than in specializing in telematics, electronics and safety systems.