Intier inside - Supplier Strategy/Magna and GM - 2003 Cadillac CTS, Intier Automotive's vehicle interiors - Statistical Data Included

Automotive Industries,  Jan, 2002  by John Shea

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When the 2003 Cadillac CTS hits the road this month, it will be the first major volume GM vehicle to have its interior coordinated by a single supplier. Magna's Intier division rides shotgun in this high-risk, high-reward venture.

When consumers get behind the wheel of Cadillac's 2003 CTS, they will be surrounded with an historic innovation they may appreciate but not fully recognize.

It's the interior. For the first time ever, GM has handed off responsibility of coordinating the interior of a high-volume vehicle to a single supplier. On the CTS, it's Intier inside -- Magna's interiors company, Intier Automotive, has total responsibility for this critical product differentiator. On upcoming GM programs worldwide, Johnson Controls Inc., Lear Corp., Visteon and Venture will get their own opportunities to show what they can do.

In theory, the "mega-supplier" strategy should bring GM significant quality, cost and innovation gains, while providing the Tier 1 suppliers with more volume, stability and revenue. In practice, though, both GM and Intier are seeing that some enormous challenges must first be overcome before realizing those gains.

The Beginning

In January 1997, GM asked several leading interior suppliers to bid on complete interior coordination for a new entry-level luxury vehicle. GM felt it had fallen behind in interiors and that a coordinated effort by a single supplier might help close this gap.

Intier officials say they anticipated this trend a full year early. "We actually targeted the CTS because it was an upcoming vehicle that fit well with our process," says Elizabeth Griffith, Intier executive director of program management and advanced development While new to the integration business, Intier started building its credentials a year earlier by undertaking the interior for the Ford Navigator (the 98MY program), and by conducting consumer clinics to learn more about market expectations and price points.

"For the GM proposal, we put together the complete package on how we would design, validate and launch the vehicle," says Mark Bauer, Intier's executive director for GM supplier integration. The plan included a commitment to build an assembly facility near GM's Lansing Grand River plant in Michigan so that Intier could deliver its interior systems on a just-in-time, sequenced basis. In isourcing for Tier 2 partners, Bauer says, "We tend to be entrepreneurial We don't pronounce to be experts in every field, so we went out and identified what we thought were best-la-class partners."

To support its bid presentations to GM, Intier brought in more than 25 experts from different companies, all of whom outlined their capabilities and how they would fit into the total project "From the start, the entire GM entourage was from Missouri," says Griffith. "It was like, 'Show me.' Well, we did."

Intier won the business after an exhaustive five-month bidding process. In return for Intier's financial commitment with its assembly facility, GM gave the supplier all of its business on the new Sigma platform. For Intier, the arrangement meant more volume and stabilized business for at least five years.

Still, because this was its first time working with Intier on a project of this scope, GM imposed two conditions for the CTS business. First, GM would be actively involved in "shadowing" Intier engineers, and Intier would also have to work with "directed" Tier 2 suppliers that GM preferred for quality and/or cost considerations. However, Intier officials declined to talk about specific Tier 2 suppliers out of confidentiality respect GM officials say they mandated Lear for seals and trunk trim, Denso Corp. for the HYAC system, Delphi for the radio systems and steering column, and Siemens VDO Automotive for clusters, along with several others.

Intier officials say they welcomed working with these partners. If there was any resistance or reluctance from the traditional Tier is to serve as Tier 2s, no one is talking about it "With capital being constrained, people don't want to spend another $5 million to $10 million on a line," says Bauer. "The marketplace is demanding this kind of approach, and people recognize it's the smart thing to do." Intier itself is doing just that by serving as a Tier 2 supplier on an upcoming Lear integration program.

Design Collaboration

At the design phase, the general direction was always the same. "We wanted a serious interior, a 'driver's car' interior," says GM's Hampten Tener, international product manager for the CTS. "Drivers want a more European feel, where there is exceptional detail to fit and finish, and treatment of edges and interfaces. Also, there's this notion of perceived quality. Does it feel rock solid? Does it feel top quality and well engineered? As a total vehicle, does it all come together as a well-integrated piece. We pushed hard for that."

Nine Intier design engineers worked side-by-side with four GM engineers to deliver on this. John Calabrese, executive director for GM'S North America interior engineering, calls the GM engineers "shadow" personnel, there to provide the Intier team with any necessary help. "We wanted to play a strong coaching role," he says.