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GM is weathering the recession by balancing headcount reduction, renovation, and community relations in its facilities planning.
The world's largest automaker is getting smaller, at least in terms of staff and facilities. General Motors will cut its North American white-collar headcount by about 10 percent annually, or an estimated 5,670 jobs in 2002.
Of course, GM isn't the only automaker to cut back. In January, Ford Motor Company announced it would eliminate nearly 22,000 jobs in the next two years and close five plants in North America. A year ago, Daimler Chrysler made plans to overhaul the Chrysler Group by cutting 26,000 jobs and closing up to seven plants.
"Overall, 2002 will be a very challenging year for the industry," GM chief financial officer John Devine said in January. "At GM, we are determined to continue building momentum."
Like most of America's largest companies, GM seeks momentum and higher profits by creating a leaner and hopefully more efficient organization. The company began lowering headcount and consolidating facilities in the mid-1990s with the help of its newly formed Worldwide Facilities Group (WFG), based in Detroit.
"In the early 1990s, the last time we saw one of these recessions, GM almost went bankrupt because of the high cost of everyone-Olds, Chevy, Pontiac and all the other divisions-doing their own thing," says Gerald Holmes, WFG's director of media relations. "This time we're weathering the recession by maintaining a positive cash flow. We've reduced headcount by increasing efficiencies and using buildings better."
Efficiency through consolidation
The strategy behind WFG's increased efficiencies is outlined in its Southeast Michigan Facilities Plan. Created in 1998 with the help of architecture consultant HLW Strategies, New York, the plan includes consolidating staff from 41 separate sites to five major campuses.
Says Charles Shapiro, principal, managing director of HLW Strategies, "Reducing headcount and therefore real estate was a primary aim of the plan. Headcount reduction couldn't have happened if the tenants stayed in separate facilities. Only by co-locating could they even contemplate meeting those headcount reduction goals."
As WFG centralized GM staff on a few campuses, facilities renovations and new projects were approved in accordance with the Southeast Michigan Facilities Plan, not the fortunes of individual divisions. "Capital Projects has...