Automotive production is a ludicrously complicated process involving countless different factors and very high expense. As such, any measure undertaken to reduce complexity, streamline the process, and reduce cost is a boon for any automaker. Now, General Motors has announced that cost-cutting measures in 2019 included an average 12-percent reduction in the GM parts used at its various production facilities.
The news comes from GM President Mark Reuss, who laid out the numbers at the recent GM Capital Markets day presentation.
The 12-percent reduction equates to a cut in some 3,500 different GM parts, which, all things considered, is a rather sizable decrease. The parts decrease was applied across multiple facets of vehicle production, with fewer trim levels, fewer exterior colors, fewer engines, and fewer transmissions. What’s more, the automaker will also enact further efforts to bundle sourcing options, or rather, the incorporation of more common parts from fewer or existing suppliers.
In addition to the sizable 12-percent GM parts reduction seen in 2019, the company expects to reduce parts used in 2020 by a further 25 percent, which is expected to provide even further cost savings.
The reduction of GM parts used in the production process is similar to the automaker’s consolidation efforts with regard to its various underlying platforms and architectures. GM will continue to utilize a Vehicle Set Strategy, or VSS, wherein dozens of older platforms are instead reduced to four next-generation automotive “sets” designed for specific applications. These include VSS-F for front-wheel-drive or front-wheel-drive-based AWD cars and crossovers, VSS-R for rear-wheel-drive or RWD-based all-wheel-drive cars, and VSS-T for rear-wheel-drive or 4WD pickup trucks, SUVs, or vans. There’s also VSS-S, which was initially planned for crossovers, but may have merged with BEV3 to support electric vehicles of any drive type.
As GM moves towards high-priced electrification and technology efforts, actions that reduce cost and streamline the production process are critical. We’ll see how effective they are as we move into 2020. In the meantime, make sure to subscribe to GM Authority for ongoing GM news coverage.