DETROIT (Reuters) -- It could be a defining element of CEO Mary Barra's legacy at General Motors: A drastic shift over the next 10 years from 26 global vehicle production platforms to just four by 2025, a bold stroke that could eventually save the U.S. automaker many billions of dollars in production costs.
The radical streamlining of GM's basic architectures, announced on Wednesday at a day-long investor briefing near Detroit, is intended to simplify the engineering and manufacturing of GM's future cars and trucks, while enabling the company to deliver better-differentiated designs more quickly to customers around the world.
If it succeeds, then GM will be able to save on components, tooling and other manufacturing-related expenses.
However, to get there GM faces a challenge of enormous complexity that many of its global competitors, notably Volkswagen AG and Toyota Motor Corp., already have begun and are still sorting out. The up-front cost is also staggering.
Such a massive overhaul of the development and production processes is "incredibly disruptive, expensive and painful," said Morgan Stanley auto analyst Adam Jonas, and requires "a well-oiled machine, culturally, managerially and financially."
Basic building blocks
In fact, Barra, 52, began the process when she headed GM's global product development organization before succeeding Dan Akerson as CEO in January.
"It's something we've been working on for more than a couple years," she told reporters on Wednesday. "We've done extensive benchmarking (and) there's been tremendous progress made already."
Even the vocabulary is changing. Different companies use different terms -- platform, architecture, toolkit -- to describe the basic building blocks on which vehicles are based.
Joe Langley, principal analyst at research and consulting firm IHS Automotive, refers to the concept of "Lego-like component sets (that) redefine what the industry traditionally referred to as platforms."
Barra's 2025 strategy envisions GM developing four highly flexible and scalable "vehicle sets" to cover front-wheel drive vehicles, from the compact Chevrolet Volt to the full-size Impala; rear-wheel-drive vehicles, from the sporty Chevrolet Camaro to the luxury Cadillac CT6; crossovers and SUVs, and trucks.
GM's vehicle-set concept employs some common components and structures, which will save engineering, purchasing and tooling costs, while allowing the automaker, at least in theory, to better tailor individual models to regional markets and specific sectors -- a small crossover for China, say, that might share some basic parts, but not sheet metal, with a midsize sedan for Europe.