GM Changes Engineering Structure : Autos: Company says it will cut vehicle development costs by 25% and require fewer jobs.

TRAVERSE CITY, Mich. — General Motors Corp. said Thursday that its new North American engineering structure will cut vehicle development costs by 25% and will require 5,000 fewer jobs at the auto maker and its suppliers.

“We’re looking at, in terms of the cost improvement to do a program, on the order of a 25% cost reduction,” GM group Vice President Arvin Mueller told reporters at the University of Michigan’s annual automotive conference here.

The gains will mean fewer jobs, Mueller said. GM anticipates cutting about 5,000 of the approximately 30,000 GM and supplier-based engineers who now work on its new car and truck programs. Most of the reductions will be accomplished through attrition, not layoffs, he said.

Under the new structure, dominated by new vehicle line executives and brand managers, GM expects to be able to reduce the time it takes to develop new cars that are approved after Jan. 1, 1997, to 38 months from the current 46 months, Mueller said.

Other auto makers already take less time to develop new cars. Chrysler Corp. can start production of a new car 31 to 36 months after its board approves it, although that time period does not include some pre-approval reviews incorporated in the GM process.

Mueller said GM will appoint 16 to 18 executives as vehicle line executives by the end of this year and plans to identify 30 people as brand managers.

The executives in the new posts will be responsible for implementing a more focused and integrated system for how GM gets its cars to market, Mueller said. In the past, GM’s product development process has often been muddled and fraught with turf wars.

Vehicle programs that have international components will be incorporated into the new organization as required, but the auto maker is not embarking on a major international reorganization.