Gm Powertrain Case Analysis

2564 words 11 pages
GM Powertrain:
Case Study

Shannon Mitchell
Regis University
October 30, 2011
History
The General Motors (GM) manufacturing plant located in Fredericksburg, VA was purchased and renovated by GM in 1978. Although this is a small plant comparatively to many of GM’s other plants it is a staple within the small town of Fredericksburg. As a major producer of the Torque Converter Clutch (TCC) for GM’s automatic transmission worldwide the Fredericksburg plant plays a key role in GM’s manufacturing line. In the late 1980’s to the mid 1990’s the plant struggled to meet budgetary goals and was faced with potential closure. These struggles stemmed from the plants inability to increase efficiency and reduce cost. Reducing labor
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Additionally, GM could outsource the production of the TCC causing there to be no need for the Fredericksburg plant. If the plants that Fredericksburg currently delivered to started producing their own TCC’s they could reduce their own production costs, reduce the price of the parts and potentially attract new customers, all of which would take business away from the Fredericksburg plant. Luckily GM invested $30 million into the improvement of TCC and into the Fredericksburg plant. This could buy the plant the time needed to improve its numbers. In addition to the threat of plant closure the company as a whole needed to be competitive within the automotive industry. Like many other companies, in the early 1990’s GM was pressured to prove its ability to provide superior quality and highly reliable products through the QS 9000 certification. With its competitors, like Ford and Chrysler, also working to attain their QS 9000 certification, GM and the Fredericksburg plant where facing higher competition and higher pressure to attain the certification. If other automotive companies were able to improve quality and reduce cost before GM they would likely suffer due to lost customers and decreased revenues. As mentioned previously, the impact that the plant had on the town of Fredericksburg is enormous. If the plant where to shut down it would not only effect

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