DETROIT - Look underneath a General Motors vehicle in a few years and you may find a Honda engine and transmission mated to a Subaru all-wheel-drive unit.
Such foreign underpinnings for an Oldsmobile or Cadillac might set Boss Kettering, GM's research and development chief from 1925 to 1947, spinning in his grave. But the industry's technology directors at this year's Detroit auto show say such sights are likely to be more common.
Tightening government regulations, the ever-changing demands of the market and escalating costs for r&d have automakers eyeing each other's laboratory shelves for gadgets that fit their own needs.
In 1998, for example, Ford signed a $363 million deal with France's PSA/Peugeot-Citroen for joint development of small diesel engines. The French carmaker is a leader in direct injection technology, a linchpin to future sales of diesels in Europe.
In December, GM announced plans to buy V-6 engines from Honda Motor Corp. for its mid-sized luxury cars while selling Honda diesels from its Isuzu Motors Ltd. subsidiary. The deal provides GM with sophisticated low-emission engines and Honda with small-car diesels much more quickly than if the two companies developed them separately.
Such horse trading is likely to intensify as automakers scramble to obtain vital technologies. GM sources say the company has had talks with Toyota Motor Corp., DaimlerChrysler and Mitsubishi Motor Corp. about buying engines and engine components, while Honda President Hiroyuki Yoshino has said his company is talking to Ford about engine deals.
'We're not at all opposed to talking,' said Bernard Robertson, DaimlerChrysler vice president for engineering technology. 'We're always talking to someone.'
While it may pain some executives to buy technology, they are swallowing their pride in the face of huge cost savings, the potential for speedy deployment and the changing definition of an automaker.
'If you say you're a designer and manufacturer of cars, there's a portfolio of things you have to do to call yourself that,' says Neil Ressler, vice president of advanced technologies at Ford Motor Co. That includes stamping metal and building engines, he says.
But 'if you say you're a provider of world-class consumer products and services, it's different.' That's what Ford believes it is, and making all of its own engines or transmissions doesn't necessarily fit into that definition, Ressler says.
Larry Burns, GM's product development boss and director of global r&d, agrees. 'There are some things that are core competencies that are key to our success as an automaker and some things that are commodities,' he says. 'Should GM use its own engineers to develop a cupholder?'
Besides, says Burns, GM's deal with Honda is about more than just engine swapping. 'What we bought from Honda wasn't technology we couldn't get elsewhere. It was the basis for forming a future relationship.'
To be sure, the benefits appear to go both ways. Honda someday may participate in GM's OnStar program, which would give the Japanese automaker a ready-made vehicle communications network in North America. Honda also is negotiating with GM for access to its online supplier network, called TradeXchange.
Takeshi Tanaka, president and CEO of Fuji Heavy Industries Ltd., says big partners such as GM give small companies such as Subaru a chance to amortize the cost of technology. In December, GM announced it is buying a 20 percent stake in Fuji and plans to cherry-pick Subaru's all-wheel-drive and continuously variable transmission technology.
The deal allows Subaru to tap into a huge distribution network, Tanaka says.
'Currently, Subaru is well-accepted in Japan, but we are not very good at South America or Eastern Europe. GM's distribution channels will help.'
While the industry may be hunting for particular technologies, there are some functions the technology chiefs say will always be done in-house. Electronics integration, stamping and core powertrain development are among them.
'I'm not saying categorically never,' says DaimlerChrysler's Robertson, 'but it's hard to see those functions going elsewhere.'
Ressler adds that Ford will draw the line at 'what we have to do to ensure the brand DNA of our products.' That includes developing and building the basic vehicle architecture.
Plus, he says, 'So much of the quality of a product is driven by final assembly, so I think we'll continue to do that.'