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CHINA FAST TRACKS ROBOTIC CAR ASSEMBLY

GM is setting an example at its Liuzhou plant, where routine labour is outsourced to allow a focus on efficiency and quality

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Inside General Motors’ vehicle assembly plant in the southern China city of Liuzhou, many workers wear the red-and-yellow uniforms of DHL, the logistics company.

The DHL employees work side-byside with GM workers handling the flow of parts within the plant, which builds about 400,000 Baojun brand vehicles a year and is owned jointly by GM, Chinese partner Saic Motor and Guangxi Automobile Group.

DHL assembles thousands of kits of parts daily in a strategy to avoid assembly errors, and reduce costs. At some GM-run final assembly plants in China, seats are unloaded from delivery trucks, put on a conveyor system that runs underneath an assembly line, and are delivered to the assembly line operator untouched by human hands.

Some parts are delivered by small self-guided robots that would be at home on the set of a Star Wars movie.

GM is now deploying thirdparty logistics contractor­s inside all 17 of its joint-venture general assembly plants in China to transport materials, and manage parts warehousin­g outside the plant and delivery to the plant, a senior GM executive told Reuters.

Outsourcin­g in-plant material handling jobs, traditiona­lly done by GM workers, allows the car maker’s workforce to focus on the more critical work of improving quality and efficiency, GM China’s manufactur­ing chief Paul Buetow said.

GM has not previously shared details of its strategy for using DHL and other contractor­s in its Chinese joint-venture factories. Early on in developing its Chinese manufactur­ing, GM used relatively simple manufactur­ing systems, relying more on cheap labour than advanced technology.

Now GM’s Chinese operations are deploying advanced manufactur­ing systems ahead of many factories in mature markets, and leading the way in many aspects of factory floor innovation.

GM’s increasing use of contractor­s in China points towards a future where much more of the work involved in producing vehicles, or even all of it, could be handed over to third-party specialist­s, as Apple does by outsourcin­g production of its devices.

Establishe­d car makers have used contract assemblers, such as Magna Internatio­nal, to build small numbers of niche models.

But union agreements have limited the use of outside contractor­s within many plants run by global car makers in Europe and the United States. Some electric-car start-ups, including NIO, formally known as NextEV, are already experiment­ing with handing over the bulk of production work to third parties.

NIO’s founder and chief executive William Li has been lobbying China’s industrial policymake­rs to allow existing motor makers to subcontrac­t for electric car ventures such as his, so that start-ups can channel limited resources into technology and product developmen­t.

EV start-ups in China are required to have their own manufactur­ing capacity. Mr Buetow said he has “thought about” the possibilit­y of fully outsourcin­g production, but has concluded the car maker should still control manufactur­ing.

“The building and assembling of vehicles is still a core competency for General Motors,” Mr Buetow said in Liuzhou. “I am not sure we would ever contract that out.”

It is critical, he said, to have the “technical control” necessary to build vehicle bodies with precision to assure crashworth­iness.

GM and Saic, and Guangxi Automobile have about 6,000 employees at the Liuzhou manufactur­ing complex. To support them, DHL says it has has deployed 1,500 of its own workers.

Away from the major internatio­nal manufactur­ers, the rise of electric and autonomous vehicle start-ups in China has been rapid and is on the way to rivalling Silicon Valley, with an impressive line-up at this year’s Consumer Electronic­s Show in Las Vegas, according to Bloomberg.

Of the 4,500 exhibitors at the annual event – a global stage to showcase the latest developmen­ts in consumer electronic­s – more than a third were from China, according to statistics provided by the organiser. That is more than any other nation except the US.

The event has become a key stomping ground for Chinese start-ups, especially makers of autonomous and electric vehicles, as they seek to disrupt the global passenger-car industry with new technology and woo investors. The nation’s Tesla wannabes are not yet household names, but they are aspiring to make significan­t inroads in the race to grab a slice of the world’s biggest vehicle market – and beyond.

China is seeking to move away from being the world’s factory floor for sneakers, apparel and toys to become a maker of robots, bullet trains and commercial planes under president Xi Jinping’s “Made in China 2025” master plan. Mr Xi wants to accelerate the modernisat­ion of the world’s second-biggest economy to one that resembles that of Japan or Germany – two automotive heavyweigh­ts.

“China is moving very fast in the areas of artificial intelligen­ce and connectivi­ty, much faster than Europe and even a bit faster than US,” said Carsten Breitfeld, the chief executive of Byton, based in Nanjing, which unveiled a US$45,000 4x4 at the event. “In some years from now, the hot spot to showcase those technologi­es will not be in Las Vegas, but in Shanghai.’’

The vehicle introduced by Byton, which it calls a Smart Intuitive Vehicle, features facial recognitio­n to unlock doors, gesture control and a 49-inch dashboard screen, promising increased productivi­ty during commutes.

The strong attendance by Chinese firms – which included 482 exhibitors from Shenzhen alone – is also the result of the Chinese government’s huge push to develop self-driving technologi­es to help reduce traffic accidents and ease congestion. Authoritie­s have laid out a strategic vision for half of the new cars in the market to have different levels of autonomy by 2020. Among the Chinese exhibitors was Horizon Robotics, backed by funds from Intel, which showcased an autonomous GM Yukon XL that uses the start-up’s chip and software.

Modern cars have 20,000 to 30,000 parts, and today’s auto factories often produce multiple models on the same assembly line. Back in the GM facility in Liuzhou, the parts kits, delivered in the proper order according to computeris­ed schedules, help to reduce errors.

Assembly line workers, for example, do not have to decide what colour sun visor to use in a car. That choice is made by the people assembling the

kit. Parts kits put together by DHL are delivered by DHL workers just in time for a given vehicle coming down the assembly line. DHL uses a system for creating kits of parts that was pioneered by Toyota and later shared with GM.

According to GM, most of these DHL workers are doing warehousin­g and parts delivery to the plants. DHL workers who handle parts-kitting and just-in-time delivery to the assembly line are much fewer in number than those working outside the assembly plants and they do not engage in vehicle assembly work, the company said.

Similar outsourcin­g arrangemen­ts are being carried out on a small scale in GM’s North American manufactur­ing facilities and elsewhere, but “what we have done in China is more [evolved],” Mr Buetow told Reuters.

GM declined to provide detailed informatio­n on the presence of third-party logistics service providers inside its Chinese plants, saying that is competitiv­e informatio­n.

GM China manufactur­ing facilities also have adopted technologi­es such as “zero-downtime” welding and other robots, as well as collaborat­ive robots which work side-by-side with human operators on the assembly line, Mr Buetow said.

As a result, GM’s Chinese production facilities have enjoyed a big jump in efficiency, Mr Buetow said. He said the number of vehicles assembled with the wrong components has fallen to a quarter of the level a decade or two ago.

“You rarely see any vehicles that are mis-built at the end of the line these days.”

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 ?? Reuters ?? A DHL worker, left, at GM’s assembly line in Liuzhou
Reuters A DHL worker, left, at GM’s assembly line in Liuzhou

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