So just what is GM’s global outsourcing/insourcing policy? Or does it even have one? The General can be rightly proud of its Global Manufacturing System – rolling out common conveyor, control and robot systems around the world, sharpening its logistics policy with the help of well-controlled providers and good planning systems, and controlling it all with topclass PLM. But look at the control of its labour spend and supply chain. With the carmaker having to idle one of its most important truck plants in the US because of a strike at American Axle & Manufacturing, GM Europe chooses this time to announce plans to outsource 5,000 jobs.
Every vehicle maker on the planet knows that one of the biggest challenges is balancing the legacy of overcapacity in some regions with the need to produce close to new lowcost vehicle-hungry (and low-cost labour) markets while placating its historically strongly unionised workforces in ‘first world’ manufacturing regions. One solution is to ‘run out’ older workers with attractive redundancy or early retirement programmes and then re-fill the jobs with lower cost workers – as Chrysler and Ford have done with some success. While this might appear cynical and even exploitative to some people, it really is a lot more humane and efficient than outsourcing to (most likely) non-unionised suppliers. This also adds to the risk spread; suppliers can be seen by union leaders as an easier target for strike action and so forth, than the vehicle makers.
Added to this is the inherent instability of a supply base that has been forced to cut the cost of its products on a regular basis – by the very customers that are now planning to outsource more complex vehicle componentry and systems. While I am sure that GM has closely observed the havoc caused by the recent Plastech/Chrysler debacle, caused in part by the carmaker having far too much single sourcing business with an unstable supplier, the recent statement by GM Europe President Carl-Peter Forster – that the company wanted to boost efficiency by increasing outsourcing – jarred with the memo from Eric Stevens, GM’s Vice President of Manufacturing. It said GM wanted to make ‘productivity savings’ by eliminating 5,136 jobs in Europe during 2008. As military history has shown us so many times, if a general employs too many mercenaries, he can be in real danger of losing some of his best lieutenants …
br /> This will be the last AMS that I edit; I am handing over to Julian Buckley, a very able and enthusiastic editor who I feel sure will continue to build on the magazine’s success. I will be expanding the AMS conferences portfolio and developing new print and event lines. I would like to thank all the friends I have made in the automotive manufacturing community for their help and support over the years and I look forward to continuing our successful association in my new role.