Global development is key for GM

General Motors Corp. expects to preserve its crucial global product development process despite the financial troubles that the automaker and its far-flung subsidiaries face, GM President and CEO Fritz Henderson said Wednesday.

GM may relinquish control of its cash-strapped Adam Opel subsidiary, but the German carmaker that developed the architecture for the Chevy Cruze compact and other cars will remain a part of GM's global development process, he said.

"When we talk to the German government about it, and they've been public about it, they want that," Henderson said in an interview with The Detroit News. "If Opel were developing an Opel Insignia only for Opel, it's 150,000 units. If we develop an Insignia for across the globe, it's a million units -- a much more efficient way to do it."

Under the global development plan that GM established a few years ago, the automaker has entrusted different regions with the development of the architecture for various vehicle segments.

For instance, GM Daewoo & Technology in South Korea develops the architecture for all of GM's subcompacts across all brands under the system, which was intended to save time and money. GM Europe is responsible for the architecture for compact and midsize cars, while GM North America produces the architecture for pickups.

Henderson headed the company's Asian and European operations before returning to Detroit in 2006.

"That makes sense to try to preserve the global-ness because you have to try to preserve as many efficiencies as you can in today's market," said Rebecca Lindland, a Boston-based analyst with consulting firm IHS Global Insight.

GM has requested financial assistance for Opel from Germany and other European countries, where Opel has factories, in exchange for a share in the carmaker.

"If we move to a minority position, it's not clear who's responsible for running the company," Henderson said. "Whoever that investor is might say, this is the governance process we would want, and they would want to negotiate it with us. That hasn't been determined."

But, he added, "What wouldn't change would be the global development process," which benefits both GM and Opel.

Henderson said he didn't expect changes in GM's big China operations, notably its partnership and ventures with Shanghai Automotive Industry Corp., or at its GM Daewoo in South Korea.

"The China business is highly profitable, it generates a significant amount of cash and funds all of its requirements," Henderson said.

"There's no reason that there should be any fundamental changes" in those operations.

GM Daewoo, 51 percent-controlled by GM, has been more affected by the global slowdown.

"It has been an integral part of GM's global strategy. It's therefore hurting today because the contraction in Europe, the contraction in Latin America, the contraction in all these markets -- you basically find it right there in GM Daewoo," he said.

"But they're taking some very aggressive actions to ... reduce cost and get through this difficult period," Henderson said. "I wouldn't see major change there."

In a broad-ranging interview, Henderson discussed the possibility of a further reduction in the number of GM's U.S. brands.

Until the White House said GM needed a more aggressive restructuring plan, the automaker had proposed focusing on four core brands -- Chevrolet, Cadillac, Buick, GMC -- while Pontiac would become a smaller, niche brand.

"I'd say we obviously need to sit back and look at it all the time," Henderson said. "But I don't see any changes in, certainly, the four core brands. You always have to assess but we don't have anything new to report today."

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