To save money, automakers push to standardize parts

Officials in the U.S. auto industry are looking to improve efficiency as well.
DETROIT (AP) -- You've probably never seen the firewall, that slab of steel between you and the heat of your car's engine, nor do you care about it.
But the way it's designed and welded into vehicles may be the key to financial survival for U.S. automakers, and the key to how much you pay for cars in the future.
Currently, Ford Motor Co., DaimlerChrysler AG's Chrysler Group and General Motors Corp. have dozens of firewalls.
But Toyota Motor Corp., the recognized leader in manufacturing efficiency, has only a few, and the only difference in those is the width. All the holes for wires and ducts are in the same place, and a worker at any plant worldwide can install one in almost any of Toyota's models because they fit together the same way.
It's the commonality of thousands of parts from the firewall to the frame, combined with standardized manufacturing techniques across the globe that make Toyota and Honda Motor Co. more efficient.
With losses piling up in Detroit, U.S. automakers are racing to become more efficient. Industry officials say consumers will benefit because car companies will dramatically reduce costs, resulting in stable prices, increased quality, more features and new models coming out at a faster pace.
"This is it for so much of everything else," said Laurie Harbour-Felax, president of the Harbour-Felax Group, a Royal Oak, Mich., a consulting company. "It enables everything else in terms of competitiveness."
A comparison
The lack of common parts is one reason why Ford, GM and Chrysler made an average of 2,400 less per vehicle in 2005 than their Japanese competitors, according to a study by the Harbour-Felax Group released late last year.
Of the Big Three, GM is farther ahead in the race to base more of its models on "common architecture," Harbour-Felax said.
GM now builds a small sport utility vehicle (the Saturn Vue and Chevrolet Equinox in the U.S.) with standardized parts in factories across the globe, and later this year will debut a globally designed and manufactured midsized car.
Company leaders saw the need for globalization in the 1990s and began moving in that direction, but a corporate bureaucracy that rewarded managers based on regional performance stood in the way, GM officials said.
GM, which lost more than 10.6 billion in 2005 and more than 3 billion in the first nine months of last year, was forced to change by need, said Jim Queen, vice president of global engineering.
Globalization picked up momentum in 2001, when GM hired industry icon Bob Lutz and gave him the mission of consolidating numerous engineering and design shops worldwide. Lutz, now vice chairman of global product development, found the company's four global regions, North America, Asia Pacific, Latin America and Europe, operating independently.
Many European engines wouldn't fit in U.S. models, and parts ended up being completely different on the same cars, even though the underpinnings were nearly identical, Lutz said.
"We were basically a conglomerate of four autonomous automobile companies that had very little interchange, and all we basically did was aggregate the financial results," Lutz said in a recent interview with the Associated Press.
Situation arose
The issue came to a head when Lutz wanted the recently acquired GM Daewoo unit in South Korea to build a new small SUV based on the existing Vue/Equinox architecture, but the Asia Pacific group wanted to build a completely new vehicle.
Finally CEO Rick Wagoner stepped in and said the vehicle would be built globally, paving the way for a 2005 organizational structure change that took design and engineering away from regional managers and made them global, Lutz said.
"I know we're dealing with the tough, fundamental issues now, which we didn't do previously," said Queen, who estimates that GM will save 1 billion in engineering, material and manufacturing costs during the life cycle of every global model.
Save for vehicles such as pickup trucks, which are unique to North America, GM plans to manufacture all of its vehicles globally by 2012.
The company's manufacturing will be analogous to Lego blocks, Lutz said, which always snap together the same way no matter what you're building. That will allow GM to build multiple models at plants worldwide, so if it gets stung by currency fluctuations in one country, it can ramp up and produce cars where the exchange rate is more favorable.
Key to maintaining different brands is equipping the cars differently for different markets in areas where customers will notice, Lutz said.
Company's success
At Ford, the company has had success building models globally, with several coming off Mazda and Volvo architecture. But it is still behind in standardizing parts and manufacturing, Harbour-Felax said.
The company is becoming more global with every new model it rolls out, and it is studying its parts to make more of them common to more vehicles, said Joseph R. Hinrichs, Ford's vice president of North American manufacturing.
Chrysler, too, says it has been making parts more common and manufacturing more efficient.
For example, three models, the Dodge Caliber and the Jeep Compass and Patriot small SUVs are built at a Belvidere, Ill., plant. The vehicles, different but built on the same underpinnings, are built in the same sequence with thousands of similar parts, reducing production costs, said Frank Ewasyshyn, executive vice president of manufacturing.
There's a downside to having too much uniformity, he said, because tight manufacturing and commonality rules can limit design creativity, he said.
"Our rules tend to be a little looser than others to be more creative," he said.
Toyota, which refused to comment for this story, is still the target of the other automakers, and it's still honing its manufacturing processes, Harbour-Felax said.
"This isn't a race that has a finish line," said Ewasyshyn. "As long as there's people making things, this race isn't going away."