In a speech recently to a leading automotive industry conference, Global Engine Manufacturing Alliance (GEMA) President Bruce Coventry outlined how his Dundee, Michigan- based engine plant is creating a globally competitive American manufacturing model.
As part of a panel addressing “World-Class Manufacturing: Manufacturing Strategies and Technologies for Enhancing Global Competitiveness,” Coventry explained how GEMA leverages its three-way alliance between DaimlerChrysler, Hyundai Motor Company and Mitsubishi Motors Corporation to reach economies of scale that make the “World Engine” the largest operation of its kind.
With a combined annual production capability of 1.8 million engines between five plants in three countries, the World Engine program takes advantage of a common base engine design, global sourcing, common manufacturing procedures and benchmark lean processes.
“So, how does GEMA target value? We extracted the benefits of volume bundling on almost 2 million units per year,” Coventry said. “We utilized an efficient investment strategy: we didn’t buy a block line, we bought three block lines, utilizing the best engineering inputs from Mitsubishi, Hyundai and DaimlerChrysler.
“By agreeing to standardization and commonization of component designs, we leveraged the strengths of the partnership,” Coventry added. “For example, we pursued open-book pricing, shared sourcing and volume bundling. Additionally, partners have shared best practices and lessons learned from past and current experiences in an effort to enhance and refine the technology.”
Coventry explained that the Global Engine Manufacturing Alliance offers its partners key advantages. A common base engine design allows any one of five World Engine plants to supply any partner, essentially making the engine a commodity.
Before closing, Coventry turned his attention to Michigan’s work force. “A few automakers are building in the South,” explained Coventry. “They’re saving a few dollars, but sacrificing the highly skilled work force found in the Midwest. Simultaneously, Michigan has experienced a loss in population over the last 10 years. Many of these are members of the highly skilled workforce for which we’re known.
“To retain Michigan’s competitive advantage, businesses must be involved with their local schools and communities. We must provide opportunities and incentives for our skilled workforce to stay in Michigan and help forge the future of manufacturing.”