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GM to Unveil Executive Revamp : Autos: Restructuring will create two ranks of senior officials to oversee product development, marketing. Move is latest bid for efficiency.

August 10, 1995|From Reuters

DETROIT — General Motors Corp. is expected to lift the curtain today on a sweeping and long-awaited plan aimed at significantly improving how the world's largest auto maker develops and sells cars and trucks.

Arvin Mueller, vice president of GM's North American vehicle development and technical operations group, is expected to brief auto industry executives on GM's decision to establish two new ranks of executives: vehicle line executives and brand managers.

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The move represents GM's latest attempt to make its bureaucracy more efficient and sharpen the brand images of its many car and truck models.

Mueller will deliver his remarks at the University of Michigan's annual automotive conference in Traverse City, Mich., GM spokeswoman Linda Cook said.

GM's new product development and marketing structure is the centerpiece of a strategy devised by G. Richard Wagoner, president of GM's North American Operations, and Ronald Zarrella, the outside marketing man GM hired last year to help clarify its brand image with consumers.

The brand managers are an import from the consumer products industry, where Zarrella and GM Chairman John Smale spent most of their careers.

The managers will be responsible for defining the market and product image for a particular car or truck model.

The vehicle line executives (VLEs) are viewed by many observers as among the most powerful positions GM has created in years.

The idea is to set up a single manager responsible for shepherding a vehicle through the often-contentious development process.

The system is patterned after one employed by Toyota Motor Corp., said David Cole, director of the Office for the Study of Automotive Transportation at the University of Michigan.

"Brand managers really represent the market input, but the VLEs are the ones who are responsible for the design, development and manufacture of the product," Cole said. "It should get a lot of the bureaucratic quagmire out of the process," he said.

Chrysler Corp. was the first of the domestic auto makers to adopt such an approach in the early 1990s, with each basic vehicle developed by a "platform team" that employed executives from all disciplines, including marketing, design, engineering, manufacturing and finance.

Under that approach, conflicts, such as those between design and manufacturing, can be resolved early, avoiding costly delays and product changes.

Cole said some elements of the effort were begun under ousted GM Chairman Robert C. Stempel and ex-President Lloyd Reuss, who are often associated with the company's slide into complacency.

But some wonder whether the new structure will actually add more bureaucracy and create conflicts with the general managers of GM's seven vehicle divisions.

"My biggest concern with this redefined structure is that you are adding layers that could slow things down, complicate things and lead to bad product decisions," said Lehman Bros. auto analyst Joseph Phillippi.

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Cook said GM does not plan this week to name the executives who will fill the estimated 10 to 18 vehicle line executive posts. No date has been set for publicly releasing the names of the new executives, but Cook said it will occur before the end of the year.

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