Platform Sharing Takes The Auto Industry To Another Level
Friday, February 09, 2007JEFF YASTINE: All this week we have been looking at the auto industry, specifically the foreign auto makers building manufacturing plants in the southern United States. It's a move that has brought jobs and boom times to rural southern economies. Many of those plants have something called platform sharing, which lets companies build similar vehicles for different markets. As Diane Eastabrook reports, it's a growing trend that could play a key role in the auto industry's future.
DIANE EASTABROOK, NIGHTLY BUSINESS REPORT CORRESPONDENT: The Astra made its U.S. debut this week at the Chicago auto show wearing General Motors Saturn label. Two years ago, GM rolled out the Astra in Europe under its Opel label. By using one platform or chassis to build two compact cars for two different markets, GM was able to save millions of dollars in product development costs. G.M Vice Chairman Robert Lutz says global platform sharing is the wave of the future for the world's largest auto company.
ROBERT LUTZ, VICE CHAIRMAN, GENERAL MOTORS: We believe very strongly in the regional model that every region running its own automobile company. And let's face it, that worked for us for decades. It's just now that the business has become global, it doesn't work anymore.
EASTABROOK: In what is becoming an increasingly crowded and cutthroat industry, auto companies say platform sharing is a way to expand their global footprint. Troy Clarke, president of GM North America, says technology has made it possible.
TROY CLARKE, PRESIDENT, NORTH AMERICA GENERAL MOTORS: Realistically, the folks down in Australia working on a future model, they can kind of ship that data up real-time to us and we can work on it and send it back. All of that can take place during the course of one shift or one normal eight hour working period.
EASTABROOK: Platform sharing isn't really new. For years now, Toyota has been building similar vehicles for multiple markets. Nissan is also doing it. The Versa goes on sale in the U.S. in July. But a couple of years ago, Nissan rolled out a similar product in Europe called Tiida (ph). Nissan's Rogue crossover vehicle, which goes on sale in North America later this year, has a European cousin called the Quashquai (ph). Nissan North America Vice President Larry Dominique says it's possible to build several different vehicles for different markets with one platform.
LARRY DOMINIQUE, VICE PRESIDENT, NISSAN NORTH AMERICA: All look very different. They can have different wheel bases. They can have different driving dynamics. But the constraints of a platform primarily limit you to maximum engine size or maximum size of the vehicle.
EASTABROOK: But selling similar vehicles in different markets has its challenges. First, consumer tastes can vary from one region to another. And government regulations can differ from country to country. GM, for instance, had to lengthen the front of the Saturn Astra by a couple of inches to meet more stringent crash requirements in the U.S. Experts say future platform sharing could also meet resistance from labor unions. The Saturn Astra will be made in Belgium along with the Opel version. Morningstar auto analyst John Novak says platform sharing could be an issue in upcoming contract negotiations with the United Auto Workers and US auto companies.
JOHN NOVAK, AUTO ANALYST, MORNINGSTAR: It's going to be a tough fight. I mean, ultimately, this means jobs that are not going to be located in the home countries, so it's going to be a contentious negotiation point. I think it will come up this year and it's ultimately good for the auto makers.
EASTABROOK: Novak says platform sharing gives auto companies the flexibility to stay competitive and possibly stay in business. Diane Eastabrook, NIGHTLY BUSINESS REPORT, Chicago.
