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Automotive Industry

Another Piece Of The Puzzle - General Motor's new Thailand plant

Automotive Industries, Sept, 2000 by John McCormick

GM'S new plant in Thailand is cranking out Opel Zafiras -- and setting the stage for other "common footprint" plants to come.

The official launch last month of anew $640 million plant in Thailand completes a key element in General Motors' global manufacturing strategy. And it signals the direction of the next phase in the automaker's radical plan to reinvent its production facilities.

In the pipeline for the next two to five years are the brand-new Delta Township and Lansing Grand River plants in Michigan, as well as a massive investment in a fresh facility at Opel's mammoth Russelsheim, Germany complex (see box). All these and more to follow will benefit from the lessons learned in Rayong, Thailand and its three sister plants, in Poland (Gliwice), China (Shanghai) and Argentina (Rosarlo).

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This "gang of four" in turn took their inspiration from GM'S plant in Eisenach, Germany, which established the Toyota-influenced principles of lean, flexible manufacturing guiding all GM'S production operations from now on.

In the case of the 190-acre Rayong site, located on Thailand's eastern seaboard, the flexible aspect of GM'S manufacturing strategy became especially critical. GM revealed its plans to build the Thailand assembly plant in 1996 not long before the Asian financial crisis virtually killed the regional new vehicle market. The plan was to produce Opel Astra sedans at Rayong for local consumption. Instead in May, 1998, GM opted to build the Opel Zafira minivan, primarily for export. Today, the decision looks inspired, as demand in Europe and other markets for the small people-mover is soaring well beyond the capacity of the existing Zafira plant in Bochum, Germany.

That said, there's no question that Rayong is a much more modest operation than originally envisaged by GM. Since start of production in May this year, output of just 8,000 cars is forecast for 2000. Officials say that will ramp up to 60,000 by the end of 2001, an increase from 40,000 previously planned, but still less than half the output forecast back in 1996. And with around 700 employees, Rayong is well below its predicted workforce of 1,550.

Keep The Template Simple. Flexible

The good news for Rayong, according to Bill Botwick, president of GM Thailand, is that the economic situation in the region is steadily improving. After plunging by 75 percent from a peak of 600,000 sales in 1996, the Thai market is gradually picking up, and is expected to top 340,000 vehicles sold in 2001. And with new, different models on the way, such as a pickup truck in 2001, production capacity at Rayong will rise to 130,000.

"I have no doubt we will reach this level by 2004," Botwick tells AI. "By the end of this year we will have 1,200 employees on two shifts."

At the Rayong inauguration, GM chairman Jack Smith endorsed the positive long-term prospects for the region. "We expect more than half the global growth in vehicle sales over the next decade to be in eight countries," he says. "Most of them are in the Asia-Pacific region, and one of them is Thailand."

Rayong has already started exporting on a small scale, with a shipment of Zafiras (badged as Chevrolets) to Chile. Smith praises the plant for achieving ISO 9002 certification shortly after start of production. And regarding quality, Smith claims the standard of Zafiras from Rayong matches that produced in Germany. "Local content is at 38 percent, so a lot of the vehicle is sourced from Europe; quality will not be a major issue." As well as European markets, Rayong will also send Zafiras to Africa, the Middle East, Australia and South America. The vehicle will be branded as a Chevrolet, Holden, Opel or Vauxhall depending on its destination.

Compared to its three sister plants, Rayong shares the same T-shaped final assembly layout, with a stamping shop, body shop and paint shop. The stamping shop has one semi-automated tandem press line, is prepared for a second line, with a full-service machine shop in support. The body shop features fully integrated, semi-automated welding with the flexibility to produce multiple body styles in right- and left-hand drive form.

Currently the plant is running on one shift at 10 jobs per hour. The rate will hit 15 jph by the end of 2000 and then move to two shift operation.

"We have followed the template established by the other plants and kept it very simple and flexible," said Rayong manufacturing director Derek Armour. "For instance, we don't have many pits so it is easy to move machinery around." With a heavy reliance on manual labor (pay starts at $150 a month plus allowances), the 40 robots in the plant "are only used for quality or safety reasons, such as in the transfer presses or welding operations," notes Armour. "When we go to 60,000 annual production, we will introduce more robots in the stamping and body shop." Armour came to GM from Nissan's highly regarded Sunderland plant in the U.K.

Aside from major components, such as powertrains shipped in from overseas, most of the locally sourced parts come from suppliers located in the Rayong industrial park, which is also home to Ford's pickup truck assembly plant. The vendors include TRW (front suspension and rear axle), JCI (seats) and Securit (glass).

Automotive Industry

Another Piece Of The Puzzle - General Motor's new Thailand plant

Automotive Industries, Sept, 2000 by John McCormick

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