US General Motors diesel engine plant planned for Rayong
By Jon Fernquest |
General Motors (GM) is planning a new factory in Rayong to manufacture diesel engines for small pickup trucks. The new factory will produce 100,000 engines annually and will employ 340 workers initially.
The new plant is part of GM's strategy to strengthen its flagship Chevrolet brand in Southeast Asia. GM is still the world's top automaker though Toyota may become number one this year.
This will be GM's first diesel engine plant in Southeast Asia. GM opened an assembly plant in the year 2000 that now employs 2,000 people.
(In photo on right a car being built on the GM assembly line at Rayong)
Here is the article in full:
GM plans $445m plant in Rayong
Carmaker needs more sales in AsiaSANTAN SANTIVIMOLNAT
Thursday August 14, 2008
General Motors is preparing to invest US$445 million (15 billion baht) in a diesel engine plant and production line retooling in Thailand as part of its strategy for growth in emerging markets.
The new plant in Rayong will supply diesel engines for Colorado pickup trucks, taking the place of the local Isuzu diesel engine factory, as GM has divested its holdings in the Japanese automaker.
Slated to begin production in 2010, the plant will make 2.5- and 2.8-litre engines for small pickups and would have a capacity of more than 100,000 units annually. It would initially employ 340 workers.
The 14,492 square-metre facility will be GM's first diesel engine plant in Southeast Asia. It will be located next to the assembly plant that opened in 2000 and now employs 2,000 people.
GM said the remaining investment would be used for engineering development and retooling of the vehicle manufacturing plant in Rayong as well as production of the next-generation Colorado small pickup for sale in Thailand and abroad.
The new investment would enable GM and its flagship Chevrolet brand to become stronger players in Thailand and across Asean, GM chairman and chief executive Rick Wagoner said at a groundbreaking ceremony yesterday in Rayong.
"This plant is an example of how we are proactively pursuing two key aspects of GM's global strategy," he said.
"The first is the accelerated application of alternative fuels and propulsion systems to reduce global dependency on fossil fuels. The second is growth in the emerging markets, including the Asean region, as a key factor in our continued global leadership."
Industry Minister Mingkwan Sangsuwan, who attended the event, said Thailand would be in a position to produce two million vehicles annually within five years, given the continued investment and rising demand for locally built vehicles in Thailand and export markets.
He said the government's long-term plan aimed for Thailand to become a leader of the next generation of vehicles and fuels for local and global marketplaces. It includes the production of eco-cars that use less fuel, and the increased promotion of alternative fuels.
Toyota Motor Corporation, poised to overtake GM this year as the world's top automaker, announced two months ago that it would invest 5.4 billion baht to expand its diesel engine plant in Thailand to 350,000 units per year from the existing 200,000 units. The plant is scheduled to begin commercial production in 2010. Toyota projected demand for diesel engines would grow to 300,000 units in 2010.
Speaking about the global rivalry with Toyota, Mr Wagoner refused to concede that GM might fall into second place.
"This year is not over yet," he said. "We don't worry about coming back to be No. 1, but we want to be driven by outstanding cars and trucks, the latest technology and participating in the world market overall."
Although GM has increased its market share in Asia, by its own calculations, to nearly 7% from 5.9% in the last three years, it sales remain small compared with North America, where it still makes one out of every five cars sold.
"GM needs Asian markets more than other automakers do to offset sluggish demand at home," said Matthew Kong, associate director of Fitch Ratings in Beijing.
In Thailand, GM has benefited in the last decade from its partnership with Isuzu. GM has kept costs down in Thailand by cutting the number of expatriate managers to about 10, from 40 earlier in the decade. It has instructed its workers to follow the Japanese formula of "kaizen", or continuous improvement, and the plant uses the just-in-time production system.
Entry-level workers earn about 8,000 baht a month at the factory.
(Source: Bangkok Post, business, 14-08-08, SANTAN SANTIVIMOLNAT, temp-link)
Vocabulary:
General Motors (GM) - a multinational corporation founded in 1908 and headquartered in the United States. As of January 1, 2008, GM is the world's largest automaker as measured by global industry sales, and has been the sales leader for the last 77 calendar years. As of 2008, General Motors employs about 284,000 people around the world. It manufactures its cars and trucks in 35 different countries and sells them under the brands of Buick, Cadillac, Chevrolet, GM Daewoo, GMC, Holden, Hummer, Opel, Pontiac, Saab, Saturn and Vauxhall. As of 2007, General Motors is the fifth largest publicly traded company in the world (See Wikipedia)
a diesel engine - the engine used in most large vehicles such as trucks, diesel locomotive trains and SUV's (See Wikipedia)
retool, production line retooling - changing the production capabilities of a factory (for example, by installing a new set of machinery and tools for making different parts)
a pickup truck - a small to medium sized truck with an open-top rear cargo area (See Wikipedia)
an assembly line, a production line - manufacturing process in which parts are added to a product in a sequential manner using optimally planned logistics to create a finished product much faster than with handcrafting-type methods (See Wikipedia)
emerging markets - a rapidly growing but not fully industrialised and developed economy, examples include China, India, and Thailand (See Wikipedia)
divest - sell stock that you own
divested its holdings in the Japanese automaker - sell the stock that it owns in the Japanese car maker
slated - planned for the future (See glossary)
slated to begin production in 2010 - plans for production to begin in 2010
capacity - quantity that can be produced with available equipment and resources
(See glossary)
flagship - the most important in a group of things owned by a company
the flagship brand - the company's most important brand
groundbreaking ceremony - the ceremony held when a new building or factory begins operation
proactive - acting in advance to cause change and improvement, rather than merely passively reacting to events (See glossary)
proactively pursuing X - acting in advance to get X done, rather than waiting for deadlines or to be told
alternative fuels - ethanol fuels from agricultural products (sugar cane, plam oil, taro, corn)
propulsion systems - a system that provides the force that moves a car forwards (driving force, propelling force, new hybrid electric vehicles combine traditional gas powered engines with battery)
dependency - need, can't live or operate without
global dependency on fossil fuels - the world needs and cannot operate without oil
poised to Y - about to do Y, will do Y soon (after a short period of time)
X overtakes Y - X passes Y, X goes beyond Y
poised to overtake GM - will do more business than GM soon
market share - the percentage of sales in market that the company has (See glossary)
sluggish demand at home - no one is buying car's back in the US where GM is based
offset sluggish demand at home - sell cars to make up for or replace cars not sold in the US becayse the economy is slow
expatriate managers - managers in the country who come from foreign countries
kaizen - a Japanese business philosophy that focuses on continuous improvement of all aspects of a business, improving standardized activities and processes to eliminate waste started in post World War II businesses such as Toyota (See Wikipedia)
just-in-time production system - a production strategy of reducing inventory, improves the return on investment, must have signals of what is going on elsewhere within the process (See Wikipedia)
