Assembly Planbook - July 2008 - (Page GM-7)

in Detroit focused on the numbers generated by each division, such as sales, market share and inventory. They left the daily operations up to division heads scattered in Dayton, Flint, Lansing, Pontiac and other towns. Many of those general managers were rewarded for their performance by being promoted to the headquarters ofﬁce. In the early 1920s, too many cars were being manufactured for market conditions and not enough raw materials were available to sustain production. To solve the problem, Sloan developed a product strategy targeted at consumers’ speciﬁc aspirations. The “car for every purse and purpose” policy, which was ﬁrst announced in GM’s 1924 annual report, divided the market into price segments ranging from Chevrolet on the low end to Cadillac on the high end. “The future problem of the automobile industry from the ﬁnancial or business viewpoint is the great question of volume,” Sloan wrote in 1925. “This is one of the points in which General Motors has not made the gain . . . that it has got to make from now on.” To achieve high-volume production, Sloan urged all GM divisions to start using common parts. In 1923, he established a general technical committee of engineers from the various divisions to discuss problems of common interest. Sloan noted a gap in the GM model spectrum between Chevrolet and Oldsmobile in 1926. He decided to make a car largely from standard Chevrolet parts to ﬁll the void. Sloan suggested combining an Oldsmobile engine and a Chevrolet chassis, to be assembled in Chevrolet plants. The new car was called a Pontiac and the strategy proved to be a proﬁtable success, because of the small capital investment involved due to little or no need for new tools, jigs and ﬁxtures. Sloan’s concept of scale economies yielded great proﬁts for GM, especially during the Great Depression. By the mid-1930s, Buick plants were making chassis and engine parts for use in Oldsmobile and Pontiac vehicles. All three brands also shared similar body shells. In fact, GM’s plants in Linden, NJ, and Southgate, CA, assembled cars under the Buick, Oldsmobile and Pontiac nameplates. At the same time, Chevrolet shared many under-thehood parts with Cadillac and LaSalle, which was introduced in 1927 to ﬁll a price gap between Buick and Cadillac. “The common parts strategy enabled GM to meet [the] competition with lower costs,” claims Raff. “GM’s rise to dominance really began with economies of scope in production. Only then did model changes, and the multi-product line along with them, become an important force in the evolving industry and ﬁrm structure.” www.assemblymag.com ASB09074Baltec.indd 1 | July 2008/ASSEMBLY | GM - 7 8/22/07 2:54:45 PM http://www.baltecorporation.com http://www.baltecorporation.com http://www.assemblymag.com

Table of Contents Feed for the Digital Edition of Assembly Planbook - July 2008

Assembly Planbook - July 2008 Contents Editorial Quality in Assembly Station to Station Assembly Lines Assembly in Action Surviving the Roller Coaster The Human Side of Manufacturing Do Your Fasteners Need a Preapplied Thread-Locker? Manufacturing Innovation A Century of Progress Trendsetting Plants Pulse Tools Get Smart Plastics: Design for X Product Reviews Products Advertisers Index Classified Leading Lean

Assembly Planbook - July 2008

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