Using a global GM platform for its next generation of cars means more to Saab Automobile AB than just the chance to share and save.
The Epsilon platform will bring major economies to the Swedish luxury brand and allow it for the first time to fully use GM's powerful and extensive global purchasing network.
During the next five years, GM plans to use the Epsilon platform as the basis for the next-generation Oldsmobile Alero, Chevrolet Malibu, Pontiac Grand Am, Saturn L series, Saab 9-3 and the Opel Omega and Vectra.
'With Epsilon, we will become part of a real global platform strategy and take the advantages,' said Michael Lapin-ski, a GM purchasing director who arrived from Detroit in 1997 as Saab's vice president of purchasing.
Epsilon will be the only platform that Saab will use for its replacement 9-3, due in 2002, and later for the larger 9-5. It's the biggest platform GM's European cars will use. Like the Saabs, Opel's two largest cars, the Vectra and the Omega, also will switch to Epsilon.
Saab has been using Opel platforms since 1993, starting with the 900 replacement. But little other similarity exists between the 9-3 that premiered in the spring of 1998, the 9-5 launched in 1997 and Opel vehicles, Lapinksi said.
The Epsilon platform eventually will allow Saab to build both cars on the same production line.
Sharing components and suppliers with GM worldwide gives Saab another potential advantage. With a total purchasing budget of only $2 billion, Saab can't offer suppliers the financial lure for their technology developments that Mercedes-Benz, BMW or even Volvo can.
With North America, Europe and Saab sharing platforms, engines and components, GM could use Saab as a carrot for suppliers to develop new and more expensive technologies, especially in safety, Lapinski said. A supplier could sell new safety technology at a greater volume but lower price to the GM volume brands.
It also means Saab can reduce its network of vendors from 616 suppliers to a more manageable number.
Saab out-sources 70 percent of its components. Its dire financial state in the early 1990s forced the sale of nearly all of Saab's component businesses to suppliers. For example, Lear Corp. purchased a seat plant next to the Saab factory in Trollhattan, Sweden. Saab also sold off its wiring, rear-axle and small component-stamping business.
Today, five of its top seven suppliers also are the biggest suppliers to Swedish rival Volvo. Lapinski said he wasn't surprised to discover this because Saab generates small production volumes but uses higher-priced parts that are unique to the upscale brands.
But Saab's top suppliers are not all Swedish. In fact, the safety-component giant Autoliv Inc. is the only national supplier and is Saab's third-biggest supplier. Lear is Saab's biggest supplier, while Robert Bosch GmbH and Valeo SA are in its top seven.
Quality is a major concern for Saab, whose products suffered from problems in the early 1990s. Production of the 9-3 and 9-5 were delayed because of quality concerns. Remedying the defects required more than just solving production problems.
Saab focused on supplier quality and has made strides, Lapinski said. Saab uses the same 16-step program as GM in the United States to ensure supplier quality.
'But the one thing we do better is advanced planning. We put a lot of energy into preventing problems from happening,' Lapinski said.
Saab also has an advocate across the ocean. Bo Andersson, now running GM's day-to-day purchasing operations, once held Lapinski's job. And Lapinski, a 20-year GM purchasing veteran, knows the intricacies of the automaker's massive global supply network.
He's also a real insider at Saab because the small executive team has an intimate knowledge of day-to-day problems that peers at larger divisions might overlook.
'In GM, I have never been this close to the product, the customer or quality,' Lapinski said. 'If we discuss issues, I am surprised at the level of detail, which only happens because we are so integrated in every area.'