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Ausgabe 3: Nick Reilly
Ausgabe 3Ausgabe 3
Nick ReillyPresident General Motors Europe
Duisburger Gesprche Herausgeber: Universitt Duisburg-Essen Fakultt fr Ingenieurwissenschaften Lotharstrae 1 47057 Duisburg Telefon: 0203/ 379-3254 Telefax: 0203/ 379-1654 Internet: www.uni-due.de/iw Nachdruck und sonstige Verbreitung (auch auszugsweise) nur nach Rcksprache mit dem Herausgeber Fotos und Gestaltung: Daniel Przygoda
Nick Reilly President General Motors Europe
I was able to get here two hours ago. The Dean and the Professors of the Engineering Faculty have been very kind to show me some of your facilities. I have to say that I am very impressed with the state of the art equipment and the skills of the people. What I liked most was that the research going on here is not purely academic or theoretical. It is very much connected to the real world. That might sound obvious to do, but I can tell you it is not always the case. The work on nano-materials will definitely be used in mainstream production quite soon, learning from fuel cell research will be invaluable and some of the features on the driving simulation equipment are very inter-esting. There is only one problem for me. At Cam-bridge, 40 years ago, I was an undergradu-ate, first studying mechanic engineering. But this is like night and day, the difference from my university days, so I am a bit con-cerned about speaking to such a well in-formed audience. Difficult questions, Ill de-fer to the Professors... I would now like to discuss the automotive industry and I have picked two topics. First, Id like to look at the industry from a 30,000- ft-perspective and discuss how the current trends and developments impact the indus-try and change our fundamental approach of how we do business. And then, Id like to talk specifically about electric mobility which indeed provides an entire new playing field for the OEMs. During the recent global economic crisis, European economies and the auto industry suffered heavily.
In the auto industry we were helped tempo-rarily by scrappage schemes but they dont last. Economies are recovering slowly with the exception of Southern Europe. Russia is strong. GM and Opel also went through very diffi-cult times as you know, not just because of the global crisis but because of our own crisis. GM has recently been reporting strong prof-its due to a turnaround in the US and very strong performance in China. GM in Europe (which is largely driven by O/V) posted its first quarterly profit in many years in Q1 2011, well ahead of original expectations. It shows our major restructur-ing is paying off and our top revenue line is increasing due to growing market share and success of new products.
General Motors Company Gegrndet: 2009 (aus der insolventen General Motors Corporation) Mitarbeiter: 202.000 (2010)
Umsatz: 135.592 Mrd. US$ (2010)
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In the first 4 month of 2011, O/V has been the second fastest growing brand. So I feel a lot better than 12 or 15 months ago. Last year, just over 75 million vehicles were sold around the world. This year and in the years to come, the market is expected to increase by four, five or even six million vehicles per year and by 2015 or 2016, we might actually hit 100 million new vehi-cles sold in a single year around the world. Unfortunately, Western Europe will not con-tribute much to this growth. We will see a rather modest increase in our region here. In fact, throughout the next 5 years, the market is expected to stay below its 2007 peak of just over 17 million vehicles. The biggest growth rates in that time period of 40% and more are expected for Asia, South America, Eastern Europe and maybe as a surprise to some, North Amer-ica. By 2016, Asia is expected to make up for 40% of the world market, with Europe at 22% only slightly ahead of North America. That obviously poses the question of where OEMs will need to manufacture in the fu-ture. Most volume manufacturers have rec-ognized the need to be close to the cus-tomers and the markets where they sell. But there are different ways of approaching this. GM, for a long time actually, has pur-sued a strategy whereby we transfer our proven manufacturing processes, standards and techniques to new markets in Asia, in Eastern Europe and in Latin America. That doesnt mean that all our plants are identical blueprintprints of
each other there are differences depend-ing on local content, legal requirements, labor cost, and logistics, for example. But there are many benefits from using a common manufacturing approach around the world. Irrespective of where we are, our employees enjoy one of the best health and safety records in about any industry. The work environment has been analysed for years for potential risks and our employees are encouraged to raise safety concerns to their leaders. Frequent safety-trainings, safety-talks and safety-observation-tours, further enhance awareness and reveal po-tential hazards. This is actually not limited to Opel/Vauxhall employees but includes all contractors working on our sites. As a result, our Opel/Vauxhall plants here in Europe are now the safety benchmark for industrial manufacturing operations not just in the auto industry. This is not an area where we have any dif-ferent standards, even in emerging markets where the requirements are less. As we share our best practices among plants, customers around the world benefit from the excellent quality levels that are confirmed by independent organizations, whether thats JD Power in the US or Dekra here in Germany, where Opel has now
led their quality ranking for the second year in a row, this time with the Meriva. Economies make a huge mistake if they believe they can sustain based on a service industry only! A very robust quality process is an integral part of the plant operation. At the core of it is the quest to avoid errors proactively. All our employees are highly focused on this. In addition, there are many other quality initia-tives, such as dealers reporting back any pre-delivery-inspection findings directly to the assembly line. And our internal quality audits are not only based on technical met-rics but increasingly on real customer feed-back. And while we believe that it is important to bring modern manufacturing know-how to
developing markets, it is not just a one-directional street. Any great ideas, lean manufacturing
ciples, and improve-ments coming out of the new mar-kets will be im-plemented right away in our existing plants.
recent example is a new approach to mate-rial handling which was first perfected in one of our plants in China. We are now supplying 50-70% of all parts of a given vehicle as part of a single kit that is even carried within that vehicle as it progresses on the line. Beyond Safety, Quality and Productivity, we are also continuously improving the cost structure of our Manufacturing plants. As an example, we have a strong focus on energy conservation. During the Easter holidays this year, we were able to save 1.33 Giga-watthours of power. This is approximately the energy consumption of 350 family households per year and cost savings of 130,000 Euros and at the same time has a marked impact on the environment. Especially in West Europe, with high labor costs/hour, we need to maximise productiv-ity and minimise indirect costs. Even though there is generally more manu-facturing in lower cost countries, also to be closer to the growth markets, it is important to maintain a manufacturing base and a balanced economy in West Europe. Economies make a huge mistake if they believe they can sustain based on a service industry only. Sadly, it is my home country, the UK, that did allow this to happen in the
1980s. The need for a mixed and bal-anced economy which
cludes a vibrant opment and facturing sector is crucial to Western European econo-
mies like Ger-many, the UK, France, Spain, etc. It is a point drilled
Duisburger Gesprche Ausgabe 3
Nick Reilly besucht die Uni Duisburg-Essen to us once again during the recent eco-nomic crisis. The sales shift towards new markets not only brings change to manufacturing and overall economies, there is also the ques-tion of how OEMs can handle the many different customer requirements in devel-oped and developing markets. To that extent, GM set up a Global Product Development Process that works hand-in-glove with our Global Manufacturing and Global Purchasing systems. Combined with our local Marketing expertise, it allows us to fully leverage our size and our resources and at the same time offer the best possible technical solutions and features to our indi-vidual customers. For every category of vehicle, small cars, large cars, mid-size SUVs, etc., we develop a common set of components that we call architecture. Any product in that vehicle category will use this component set as a basis, irrespective of whether it is offered in the US, in Brazil, in Germany or in China. This does not mean that all our vehicles are identical, quite the contrary. The architec-tures are so flexible that they can easily accommodate specific brand requirements or regional tastes. An Opel Astra and a Chevrolet Cruze, for example, have entirely different designs to express the different brand characters. And
they also have entirely different driving dy-namics and can accommodate different engine line-ups. Another trend that we need to respond to or even better anticipate is the growing ur-banization that we are experiencing just about everywhere. Whether its major cities in China, India, elsewhere in Asia or in Latin America, or even here in Europe, where cities such as London or Paris are continu-ously expanding their territories and in-creasing in population: the effects are the same everywhere. There is an increasing amount of traffic jams, people spend more time in the car, and there are concerns about air quality, just to name a few. This is not a new phenomenon, but is accelerating. This development, in fact, is a major driving force for the electrification of the automobile which I will touch upon shortly. Another trend is for a growing segment of younger people to not consider a large car as a status symbol anymore. They may still be interested in convenience and safety options, features, and equipment, and they may have a particular interest in in-car con-nectivity, but size does not matter for them as much as it did for previous generations. In fact, the reverse is often true. That is why Opel has decided to launch a new entry which is smaller than the Corsa and which is geared at exactly that cus-tomer segment. The car has a project name Junior. Today there are around 900 million vehicles in operation worldwide. By 2020, this number will reach 1.1 bil-lion, according to current calcula-tions. We believe there is sufficient room for a new chic and urban car next to the Opel Agila which is of more utilitarian nature and serves customers who are more cost-conscious. And once again, it is our flexible development and manufacturing system that allows us to engineer the Junior using a maximum of existing components and to produce it in an existing plant in Eisenach alongside the Corsa. Years ago, it would
have been impossble to profitably launch such a niche model. These kind of societal trends lead me to my second topic today, which is somewhat more specific but could quite easily repre-sent one of the biggest paradigm shifts weve seen in the auto industry for a long time. Today there are around 900 million vehicles in operation worldwide. They operate al-most exclusively on the basis of fossil fuels. According to current calculations, this num-ber will reach 1.1 billion vehicles by 2020. It is heavily influenced by increasing individual mobility in developing countries, such as China, India, and Russia. It doesnt take a lot of imagination to realize what this means for our environment, on the one hand, and for securing the freedom of individual mobility on the other. It is clear that a paradigm shift is in order. Our overriding mission now must be to make progress in identifying, developing and using renewable sources of energy and in developing viable ways of storing this energy. In its White Paper titled Roadmap to a Sin-gle European Transport Area Towards a competitive and resource efficient transport system, the European Commission states, The challenge is to break the transport systems dependence on oil without sacrific-ing its efficiency and compromising mobil-ity. At Opel/Vauxhall, we have fully endorsed this challenge and are committed to explor-ing and developing a range of technologies that can reduce and ultimately displace de-pendency on oil, minimize CO2 emissions and encourage energy diversity. The electri-fication of propulsion systems is of key im-portance to achieving this goal as it allows for the use of renewable sources to gener-ate electricity. Of course, given the still high percentage of sales of conventionally powered cars we need to continue to optimize conventional powertrains and vehicles with features such as start/stop, active aero-shutters in the
front grille, optimized underbody-aerodynamics, gasoline direct-injection, reduced mass and so on. In the longer run, however, it is clear that cars will be powered electrically. Our operations in Germany and specifically our R&D centre in Mainz-Kastel are co-operating daily with other GM centres to accelerate our capabilities.
We have devised a three-pronged strategy called e-mobility unlimited. It includes: small battery electric vehicles for people
who drive short distances, town and city driving
extended-range electric vehicles for peo-ple who want a single car that can cover short as well as long distances and that can transport the entire family and their luggage and
hydrogen fuel-cell electric vehicles for driving long distances with zero emis-sions and no limitation on vehicle size or function
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Tec-Tower in Duisburg Neudorf When you look at the technical aspects of on-board energy storage as well as the ex-pert predictions of what lithium-ion batteries will ultimately be capable of, it is apparent that a pure battery-electric vehicle will be most suitable for short distances. Such a battery-electric vehicle can be very suitable for urban areas where range requirements are lower and air quality concerns are high. This is why we are currently developing a battery-powered vehicle on the basis of the afore-mentioned Junior. When you look beyond urban areas, how-ever, requirements are much different: When required, cars need to be able to
cover much larger distances They need to offer enough room for pas-
sengers and luggage They need to be available for use at any
time and not be restrained by long charg-ing times and special charging infrastruc-ture
In short, customers want an electric car to drive and perform like any other car on the road, and they dont want to compromise on comfort, safety space or range. This is where the Opel/Vauxhall Ampera comes in. When we launch the Ampera at
the end of this year, it will be the first electric vehicle with practical every-day use offered by a European manufacturer.
We know that
one of the big-gest customer
concerns regarding electric vehicles is to
get stranded some-where due to a flat bat-
tery. And when you look at recent press reports and sto-
ries posted on the internet, it is obvious that this concern is very real.
Independent research has shown that 80 percent of daily commutes in Germany are within a range of 50 kilometers, the question remains: What about the other 20 percent of journeys? The question is HOW to best tap re-newable energy sources, and cer-tainly not IF. The Ampera has a clear answer: no wor-ries. With a battery range of up to 80 kilometers, more than 80 percent of daily commutes can be covered purely electri-cally and without CO2 emissions. But when necessary, the Ampera can go far beyond that thanks to a small on-board combustion engine which operates a generator when the battery is depleted. This is achieved at a fraction of the weight and cost a corre-sponding battery would require. With a
full battery and a full gas tank, the Ampera can go more than 500 kilometers in total. And since its gas tank can be filled up eve-rywhere, it has a virtually unlimited range. Recently, Germany has categorised the Ampera with a 33 g CO2 rating, far below others. The actual data can be even much lower depending on individual driving hab-its. Consequently, the Ampera qualifies for tax credits existing in many European coun-tries. On a side note, one of the issues we had to address as we developed the Ampera, was to ensure that the fuel is not deteriorating in case the Ampera has been driven electri-cally for a long time and without the range-extender kicking in. To that extent, we de-veloped a so-called Engine Maintenance Mode that switches on the engine after ap-proximately six weeks of no or very limited engine operation. This ensures, the engine is always ready and in perfect condition when needed. The eco-friendliness of electric cars is largely dependent on how the electricity to power them is generated. One of our big-gest challenges down the road with electric mobility will be to get as much electricity as
possible from both familiar sources of re-newable energy like solar and wind power as well as from still vastly under-exploited renewable sources like tidal power. This is really a question of HOW to best tap renewable energy sources, and certainly not a question of IF. Electric mobility offers us an ideal opportu-nity to use renewable sources of energy and we must remain unwavering in our commitment to pursue and grow these op-tions together with energy providers and other stakeholders. As we keep thinking ahead, Opel is re-searching new recharging technologies and utilization concepts for electric cars. As part of the consortium involved in the MeRegio-Mobil (Minimum emissions Region) project in Baden-Wuerttemberg, we are looking at recharging methods with additional func-tionality such as a bi-directional connection of the battery with so-called smart grids. The basic premise of the project is that electric vehicles can also be used to store energy and feed it back into the grid via the bi-directional charging system when they are not in use. To implement such ideas, battery manufacturers need to make further progress in order to enable the charging and discharging of a battery several times a day without negatively impacting service life. And they need to make progress in terms of reduced battery size and weight, and lower battery prices. While we are working on these challenges, it is important to not lose sight of other highly promising solutions such as hydro-gen fuel cell vehicles. Fuelled by hydrogen generated from renewable sources, they present an excellent option for flexible, sus-tainable mobility. The field tests we are conducting as part of the Clean Energy Partnership (CEP) clearly demonstrate the viability of hydrogen. The ten HydroGen4 vehicles we have on the road in Berlin provide vital data needed to advance this technology. In the meantime the fleet, being driven by employees of leading companies from vari-ous sectors, has proven highly reliable. Af-ter more than ten years of research and
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development on this technology, we now know how a production vehicle can be technically realized. It is important to mention that hydrogen cannot only be used to generate electricity on board of the vehicle through fuel cells. Energy can be stored much more densely in the form of hydrogen than it is possible with a battery. So it would be quite natural to generate hydrogen from renewable energy sources such as wind or solar power and to transport it to fuelling stations. It is therefore much closer to what we are used to from gasoline or diesel. Being a leader in technological innovation and development is economically demand-ing. Especially in the beginning, with the absence of economies of scale, new tech-nologies are more expensive than estab-lished ones. While they create a competitive advantage for those leading this development, they also pose challenges. OEMs face long and uncertain terms of return on their invest-ment. The investment is being made in ex-pectation of long-term growth opportunities. We need support from other stakeholders. It is not only CO2 legislation that is the driv-ing force behind electric mobility the automotive industry will meet emissions limits it is government action and tives that create momentum and a critical
mass in orders to continue the huge in-vestment into Generations two, three and four. Governments in many European countries have already recognized this and are offer-ing quite significant incentives to consumers who are willing to make a change for the better. In Germany, the National Platform for Electromobility just last week presented its report to the German government. The findings and recommendations present a roadmap in order to get Germany ready for electromobility. However, we need to go further. The Chancellor said she would look again at the situation one year from now. It is indeed important to approach this as a long-term project. The current proposal in-cludes increased funds for national re-search and development, an education and qualification initiative, and some tax incen-tives. If we are serious about abandoning fossil fuels, any such incentive needs to be im-plemented as soon as possible. Other coun-tries, such as the Netherlands, Denmark, France, Belgium, Spain and the UK are markedly advanced in this respect and they go further in their approach. And going back to what I said earlier, gov-ernments can very well afford such financial support. As their tax revenues are currently
generated from existing gas and Diesel powered vehicles, the one billion car park on the road continues to be so large that any financial support for e-mobility is minis-cule compared with the tax revenues from conventional vehicles. With the necessary support, I am personally convinced that electric cars could establish themselves much faster in the market place than expected by some industry pundits. There is one other reason to aggressively create an appropriate framework for e-mobility in Europe: The speed with which Asia is developing battery and other tech-nology is amazing. For China, which is investing billions each year, for example, the driving force behind these activities is not the concern for the environment alone. The reduction of their dependency on oil imports is another rea-son. China is investing massively for their own need, because they have the volume and the domestic market. Despite early prob-lems, they are learning and getting ahead fast. At the current speed, they are going to take over the world market. Do we want to let them do that? Europe must not be com-placent or we will miss the boat. The question of how and whether govern-ments support the quick introduction of e-mobility thus is not only one of
mental and mobility concerns, it is also a matter of national economic and industrial objectives. E-mobility will bring such a huge paradigm shift that goes way beyond the auto indus-try. Think of the impact it will have on our homes, on energy generation, on urban planning, on education. E-mobility therefore brings a unique chance to rethink our indus-trial policies and to ensure we have a bal-ance economy that is prepared for global competition. I do hope that the EU remem-bers this as they develop legislation, as we need a deliberate policy to generate jobs in Europe. Unfortunately, one sometimes has the im-pression that Brussels is not fully aware of the risks and opportunities that exist. The paradigm shift towards fossil-fuel-free mobility, provides great opportunities: it will benefit the environment, enhance quality of life particularly in urban areas, it can gen-erate qualified jobs in a balanced economy, in short, life can become better and more sustainable for people living now and in future generations. Lets make sure that all stakeholders work closely together so that these opportunities become reality as soon as possible.