General Motors’ decision to close five plants and lay off tens of thousands of workers in the U.S. and Canada was a trending topic today in news. Lot of articles. You can find all of them online. My interests PLMitical and here is my favorite article from Forbes – GM Restructuring Moves Appear To Confirm Sergio Marchionne’s ‘Confessions’. The article speaks about the idea of car platform optimization. The topic isn’t new and GM news just sparkled the conversation up. Here is my favorite passage:
In 2015, the late, enigmatic CEO of Fiat Chrysler Automobiles shook up an otherwise mundane quarterly earnings conference call with financial analysts with a presentation he titled “Confessions of a Capital Junkie.” In the 25-page PowerPoint slideshow, he made the case the global auto industry was wasting money and resources on product development and manufacturing capacity with each company going it alone, blowing billions of dollars while, in many cases, performing redundant operations. Instead, he argued, the industry could save huge dollars by consolidating–sharing resources for many of those operations.
Check Sergio Marchionne presentation online here . I captured the following 2 slides.
It’s true that GM is partnering, in some cases, with other automakers and with technology and ridesharing companies in order to combine efforts and resources, but that falls short of what Marchionne had in mind. In fact, he called out automakers’ moves to reduce the number of vehicle architectures, greater commonization across product lines and what he called “one-off co-operations, JVs and other equity tie-ups“ But, he charged, “all this has produced poor results so far, as OEMs’ returns and valuations are still depressed.” No, the late FCA leader, pushed for sharing platform, vehicle and powertrain development as well as vehicle production capacity concluding. “the potential savings are too large to ignore.
The news and presentation are resonating with the question about what will happen with PLM platforms as manufacturing OEM will restructure platforms. Car OEMs are big consumers of PLM platforms from major PLM vendors. If car OEMs will restructure and optimize platforms, it can raise a question about what PLM platforms will be used and how PLM usage and licenses will be optimized. It can have potentially huge impact.
What is my conclusion? A potential outcome of automotive OEM restructuring and platform sharing can be a bad news for PLM vendors. Licenses will be optimized and it can impact revenues of major PLM providers. On the other side, reorganization is an opportunity for new vendors to come and introduce new solutions. What is clear that more collaboration will be required as companies will become more connected. Just my thoughts…
Disclaimer: I’m co-founder and CEO of OpenBOM developing cloud based bill of materials and inventory management tool for manufacturing companies, hardware startups and supply chain. My opinion can be unintentionally biased
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