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GM Spends Big to Save Big


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18. October 2013

The truism that you have to spend money to make money seems to be the basis, in part, of General Motors’ investment of some $200-million at its Arlington, Texas, manufacturing facility, where it produces Cadillac Escalades, Chevy Tahoes and Suburbans, and GMC Yukons. The money was spent on a contiguous stamping plant.

GMArlingtonStamping003.jpg

(GM Photo: Mark Stone)

That is, the company anticipates that the on-site stamping facility will save the company about $40-million per year on logistics costs, alone. (Prior to the new stamping facility, they were shipping parts from several GM sites, some 1,000 miles away from the plant that’s located west of Dallas.)

“The money we save can be reinvested in our products and technologies that add value to our customers,” said Tim Lee, executive vice president, global manufacturing, and chairman, GM China, earlier this week, when the plant was launched.

Lee also noted that “Arlington is the 10th contiguous stamping plant to come on line in GM’s global operations in the last five years.”

Tim Lee, GM Exec. VP of Manufacturing and Chairman of GM China

There is also a quality benefit of having the material stamped on site. Explained Lee, “Sheet metal is the first thing customers see when they enter a dealership. While we can have the best pain systems in the world, if the sheet metal the paint is applied to isn’t world class, our customers will be disappointed. Shipping these parts long distances increases the chance something can happen to the parts. Contiguous stamping plants help us eliminate that risk by moving parts a matter of feet from assembly, not miles.”

To say that Tim Lee has a big job would be to greatly understate the situation. In addition to his job of running GM’s operations in China—and it should be noted that Shanghai GM and SAIC-GM-Wuling manufacturing joint ventures reported a 11.1% increase in sales in China during the first nine months of 2013—he is also responsible for 171 manufacturing plants located around the world.

And speaking of the world, the full-size SUVs produces at the Arlington facility are produced exclusively in that plant and exported throughout the world. In the U.S., those full-size SUVs account for about 75% of the sales in that category, according to GM.

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