H2-Oh! The "little Hummer" combines the best of GM's T800 parts bin and sourcing with lean manufacturing

Automotive Industries, Dec, 2001 by Gerry Kobe

When General Motors Corp. bought the right to market and distribute vehicles under the revered "Hummer" name in June 1999, it drove a stake into the heart of its reputation as a plodding and ultra-conservative automaker. Just three months later it unveiled a hastily cobbled Hummer concept vehicle called "Vision," and in January 2000 had a more production intent concept truck at the North American International Auto Show in Detroit.

Save but for a few minor changes, that vehicle will launch in April 2002 as the Hummer H2, the first offspring of the unique agreement between GM and Indiana-based AM General. Though not a joint venture, the contract gives GM use of the Hummer brand name and responsibility for design, sourcing of components and tooling, production engineering, and marketing and distribution. AM General is responsible for manufacturing engineering, assembly and brand management. It also retains the right to market and distribute military vehicles such as the H1, known to the army as the "HUMVEE."

Essentially, the H2 is a GM-designed product, built by AM General and then sold back to GM at an agreed manufacturing fee per vehicle.

The Genesis of H2

Concurrent with the H2 concept vehicle being shown in Detroit, AM General was planning an all-new 630,000-square-foot assembly plant in Mishawaka, Ind., near its existing H1 plant. It had already begun construction when, in May 2000, H2 program manager Ken Lindensmith urged AM General CEO James Armour to set up a meeting with GM to consider adopting its Toyota-inspired Global Manufacturing System (GMS) as away of improving efficiency.

"Armour gave it some thought and came to us and said that he wanted to do it," says John Molesphini, director of body and metal for GM's Manufacturing Integration Center (MIC) and project leader for H2. "So beginning that July we had Assistant Plant Manager Jim Dolan co-Located with us along with managers from key areas in the plant. Then in August, we hosted Armour, his VP, senior management and UAW people. It was a two day immersion into the principals of GMS, including working in a simulated work environment so that they knew what it was like to work in a lean factory."

Over the weeks and months that followed, AM General slowly started to adopt the key principles of GMS, which include globally common strategies for people, safety quality, customer responsiveness and cost. The training included GM-sponsored trips to its highly efficient Eisenach, Germany, facility, which is one of the model plants for GMS. It even culminated in a simulated GMS work environment being built onsite in Mishawaka to show those from the existing workforce what the new process would be like and how that would be different from what they were used to.

"The H2 program is very different from the rest of AM General," Armour admits. "I had to hire new management for this program, experts from Ford and Nissan. GM is training them now at its MIC. Our new H2 plant manager is the ex-plant manager of Ford's Louisville, Ky. plant; our quality assurance chief is from Nissan's Smyrna, Tenn., facility."

It is unfortunate that plans for the new plant were well underway before GMS was considered because some things are less than optimized. For example, the paint shop went in a bit too early for GMS to have any impact on its footprint or flexibility. Also, GM wasn't able to use its "virtual factory" model for the plant, which would undoubtedly have helped in process engineering and material handling.

There were however, several successes.

"Our analysis helped reduce the amount of materials in the plant," Molesphini says. "These elements even transferred back to the H1, which opened up space where we put in our simulated work environment. We also had input on body build and general assembly. We didn't actually reduce capital investment, but we balanced it. We identified opportunities for capital reduction and reallocated the capital for other needed things."

Other areas positively impacted by GMS include safety, which was of great concern because the plant has more manual operations than most There are only about a dozen robots in the body shop, so Molesphini made that area a priority. As well, the concept of preventive maintenance was emphasized, as was plant flexibility. Each station was analyzed with the thought in mind of making the operator successful because, as Molesphini puts it, "that is who pays the bills."

Off the Shelf, But Improved

Many of the working components in H2 are from GM's full-size-truck (T800) program but tweaked to Hummer's level of ruggedness. The frame, a three-section unit with hydroformed front and rear modules from Magna's Formet facility in St. Thomas, Ont., is a perfect example.

"This program combines the best structural elements of two other T800 frames," says Scott Turner, VP of business development and finance for Magna Structural Systems. "Its front module is from the one-ton T800 and its rear is a modified Suburban module. GM mandated that the H2 be fully capable of tackling the Rubicon Trail -- they tested there extensively. So the H2's frame has rods fitted under the rockers to serve as skidplates in extreme off-road situations."