GM engineering rethink aims for savings of $1 billion a year

By Jamie LaReau, Automotive News

Detroit, Michigan - Unlike auto executives who seek a bigger budget for their divisions, Jim Queen is creating his own savings.

Queen, the 57-year-old vice president of global engineering at General Motors, estimates GM will save more than $1 billion annually with the latest changes to its global engineering program.

GM cut several hundred white-collar jobs last month, mostly at its engineering center and proving grounds in suburban Detroit and its headquarters.

The cuts are the first since GM said in November that it would slash 7 percent of its 36,000-person white-collar work force in an effort to cut costs. GM lost $10.6 billion in 2005.

GM can make the reductions in part because its global product development organization is cutting overlapping engineering work.

CEO Rick Wagoner tapped Queen to take over as head of global engineering in March 2005.

Queen was a fighter pilot in the U.S. Marines and still loves to fly. That heritage and need for speed helped him bond with another former Marine pilot, GM Vice Chairman Robert Lutz.

Queen is married to GM vehicle line executive Lori Queen.

Less duplication of effort

One of Queen's primary tasks has been to end GM's habit of doing the same engineering tasks over and over, sometimes only slightly differently, in different parts of the world.

"We want to continue to grow our technical competency, and we want to continue to learn from each other around the world," he said in an interview.

Queen has created 15 executive director positions to give GM engineering consistency.

GM engineers -- who once reported to regional directors -- now report to a global executive director, Queen said.

He said the move will result in a 20 percent material cost savings from having fewer vehicle architectures, which cuts parts costs by increasing volumes of common components.

GM also will see a 25 percent savings in engineering costs by reducing redundant work, Queen said.

"This isn't taking creativity out," he said.

"It is standardizing work. We've studied this for many years, and there's a considerable amount of structural cost associated with not doing standardized work. So it's a real important issue."

From Automotive News (A Crain publication)