LIUZHOU, China -- Inside General Motors’ assembly plant in this southern China city, many workers wear the red-and-yellow uniforms of DHL, the global logistics company.
The DHL employees work side-by-side with GM workers handling the flow of parts within the factory, which builds about 400,000 Baojun brand vehicles a year.
The plant is owned jointly by GM, Chinese partner SAIC Motor Corp. and Guangxi Automobile Group.
DHL assembles thousands of kits of automotive parts daily in a strategy to avoid assembly errors and reduce costs. At some GM-run assembly plants in China, seats are unloaded from delivery trucks, put on a conveyer system that runs underneath an assembly line, and are delivered to the assembly line operator untouched by human hands.
Some parts are delivered by small self-guided robots that would be at home on the set of a “Star Wars” movie.
GM has deployed third-party logistics contractors inside all 17 of its joint-venture assembly plants in China to transport materials, manage parts warehouses outside the factories and deliver components to the plants, a senior GM executive told Reuters.
Outsourcing in-plant material handling jobs, traditionally done by GM workers, allows the automaker’s workforce to focus on the more critical work of improving quality and efficiency, GM China’s manufacturing chief Paul Buetow said.
GM has not previously shared details of its strategy for using DHL and other contractors in its Chinese joint-venture factories. Early on, in developing its factory footprint in China, GM used relatively simple manufacturing systems, relying more on cheap labor than advanced technology.
Now, GM’s Chinese operations are deploying advanced manufacturing systems ahead of many factories in mature markets.
GM’s increasing use of contractors in China points toward a future where much more of the work involved in producing vehicles -- or even all of it -- could be handed over to third-party specialists, as Apple Inc. does by outsourcing production of its devices.
Established automakers have used contract assemblers such as Magna International Inc. to build small numbers of niche models.