The indefinable key
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Efforts to re-establish Bedford and develop GM as an international force centr( on the world truck. Alan Millar looks at its chances of success
"WORLD TRUCK" is one of those terms that trips off the tongue a little too easily. It was most probably coined by a journalist or a marketing man eager to express the indefinable, and it can mean almost anything you care to suggest.
To General Motors, notably Bedford Commercial Vehicles, it is a key to the corporation's future development, yet Des Savage, Bedford's worldwide marketing director, admits there probably is no such thing as a world truck, and there might never be one. So what is all the fuss about?
It is all about economies of scale, one of those basic principles of economics which firstyear students absorb early in their studies. GM wants to build commercial vehicles for sale throughout the world, and can do this at the lowest possible cost if it makes maximum use of the same components wherever possible.
The savings grow if it manufactures most of these components in its own factories throughout the world, and that is the beginning and end of the world truck.
If the same model can be sold throughout the world, that is a bonus, but if GM only standardises the propshaft or wheels it is still following the world truck principle.
To turn this into reality, the GM Worldwide Truck and Bus Group was formed in 1981, with headquarters at Pontiac, Michigan, and Bedford Commercial Vehicles has been separated from Vauxhall Motors to become an affiliate of the Michigan group.
Given that Bedford and Vauxhall were together for 50 years, it is easy to see why there are sceptics around who doubt whether the split is anything other than a paper exercise.
But Savage insists Bedford is being turned into a free-standing business, and its new management structure will be in operation before the end of this year.
It is a move he welcomes, and he says there are many at Bedford who wished it had been made 10 years ago as Bedford will now become master of its own destiny and will be able to make investment decisions based entirely on the needs of the commercial vehicle market. No more will Vauxhall's car priorities take precedence.
Instead, the American connection means Bedford will play its full part in developing a comprehensive range of GM commercials for world markets. It sees major growth opportunities abroad, especially in developing countries, but recognises that no single division of GM can realise these on its own.
Savage likens GM's approach to that adopted by Oaf, Saviem, Magi rus Deutz and Volvo in 1974 when they pooled their resources into the Club of Four. "Call us if you like, the Club of General Motors," he quips in his mid-Atlantic style fashioned after a career of being a European representative of an American multinational.
There probably are Savage sayings to motivate his managers for every occasion. Of the aims of the Worldwide Truck and Bus Group, he says: "If you've got a hot product, it's easy to be a hero. If not, you don't play much golf."
He is counting on being able to tee-off with the confidence that Bedford's expertise in such fields as diesel engine development will be harnessed to its full potential. There is no rigid plan yet about which part of the Group will build what, but Savage envisages perhaps Bedford concentrating on engine development, Chevrolet on axles and transmission, and someone else on front axles.
The first fruit of the world truck concept will be a medium van which, in Britain, will replace the Bedford CF which is now being outsold by both the Ford Transit and the Freight Rover Sherpa.
Final decisions on sourcing parts will be governed by exchange rates, and digests of these are circulated frequently at Bedford. GM believes it can lessen its vulnerability to violent changes in the international money markets if it sources units for each range of vehicles in three countries.
At the moment, the fall in value of sterling would make it attractive for entire vehicles to be manufactured from Britishsourced parts and for them to be exported throughout the world, but it is a safer bet for the long term to source around one thi; from each country.
There certainly is no questic of Bedford just becoming a European branch of an Arne; can corporation, building pt.; ducts according to the MichigE diktat. There are British enç neers and draughtsmen workir permanently in the USA and e gineering director Ian McEvvE spends much of his life flyir across the Atlantic. Market r search will determine whit vehicles are needed for inc vidual markets, and this will t be fed in before the final invef. ment decisions are taken.
Vehicles will be designed fro the start to be either left right-hand drive, rather than b ing one and converted to tl other for specific markets. B Savage illustrates the flexit approach by pointing out that the North American market co tinues to resist the Europe; trend of building forward contr models, there will be no cot mon investment in sheet met but much of the driveline will common to both markets.
The Detroit Diesel Allison di: sion is also part of tF Worldwide Truck and B; Group, and its driveline c velopments will form part of t world truck concept. But t
N.-riding consideration in its,
Bedford's involvement in policy of maximising the use in-house components is that tomers' wishes must prevail. ,ayage stresses that many ;ling component suppliers go on supplying to Bedford, I there is no question of reluct customers being compelled iccept GM parts just because y are GM parts.
Dr light vans, Bedford will bably continue to depend on xhall and Opel for the car igns from which they will be ved. The basic design will be led out by the passenger car Jp, which already works on world car concept with such leis as the J-car (Vauxhall alier/Opel Ascona) and T-car Jxhall Astra/Opel Kadett), but ford decides the specificafor van derivatives like the .a van built at Vauxhall's smere Port plant on Mersey.
adford is unlikely ever to take production of these models round six cars are being built avery van, nor will it design models from scratch. "It Id be mad to pull away from flume car plant," says Say
us could also involve Bedsourcing vans from GM's rush car plant if a van deriveof the S-car mini (Vauxhall a/Opel Corsa) is added to the mercial range. There are no s at present to sell such a but last year Ford imported Fiesta vans and Volksen nearly 700 Golf vans of size, and Austin Rover ched a Metro van, so there be scope for Bedford to in the appeal of its range.
e relationship with Isuzu is ?. tentative. GM holds a 34 :ent equity stake in the Japa nese company and has just formed a joint sales company (51 per cent GM, 49 per cent Isuzu) to sell commercials in mainland Europe, but Bedford is only using Isuzu to fill in gaps in its range.
Isuzu forms part of the overall product programme of the Worldwide Truck and Bus Group, but in line with general GM policy it will compete with Bedford in most markets.
Bedford's KB pick-up range is imported from Japan because the company has never been able to justify building its own one-ton pick-up. Last year, Bedford sold 900 KBs, while Ford sold 3,490 Cortina-derived P100 pick-ups in six months (and another 2,000 in the first three months of 1983), but Savage believes the Bedford figure would be better if it was not limited by the import quotas laid down by the agreement between the British and Japanese motor industries.
The fall in sterling value has made matters worse for Japanese manufacturers, so a permanent swing in this direction could prompt Bedford to build its own pick-up at a later stage.
To export successfully, Savage is convinced Bedford must have a strong domestic base, and the company is aiming to gain a greater share than the 11.3 per cent of the over-3.5 tonne market it won in the first quarter of this year.
GM's name is one of those which is known to be interested in buying Seddon Atkinson from International Harvester.
Seddon is stronger at the heavy end of the vehicle range, where Bedford is weakest, and Savage acknowledges that Seddon's distributor network would be valuable to it. He says no one is interested in buying a manufacturer at present for its production capacity, but says acquisition of Seddon would be "one interesting approach" to building up Bedford's home base. The two parties are still having talks.
Whatever happens on that front, Bedford is already making a determined effort to re-establish itself as an exporter, and is benefiting from the reduction in inflation in Britain and more favourable exchange rates.
It has taken over GM's responsibility for selling its vehicles and is setting up zone offices throughout the world. These are already at work in Singapore, Abu Dhabi, Jeddah and Africa, and another is being set up in the Carribean.
In all, there are around 25 Bedford sales staff working on the ground in these markets, negotiating with dealers and distributors and establishing contract prices. In many cases, vehicles are assembled locally, using locally-sourced parts.
The African zone is run from Bedford's Luton headquarters, as cross-continental communications are so poor as to make it impossible to run from any single African country. Each sales executive spends about two to three weeks at a time in Africa, and about 60 per cent of his time on the road.
Nigeria is Bedford's best African market, taking around 6,000 vehicles in a good year. The poor state of the Nigerian economy has cut this to around 3,000, but there are high hopes for expansion in other areas with, for instance, the imminent introduction of the TL to Kenya. In Asia, efforts are being made to recover its share of around 6,000 vehicles a year in Pakistan.
In Europe, the joint Bedford/ Isuzu sales company will give customers a wider choice of vehicles through the established dealer network. Before, the two makes were sold unevenly according to the relative strengths of national distributor networks.
The GM philosphy is that each of its divisions is a free standing free enterprise company which is expected to compete for its own business. In the LISA and Canada, they all cornpete against one another, and Bedford will compete against other GM divisions if it reckons it will make money as a result. It looks at each market, and will leave some to another division if that is better for Bedford, but would do the same if, for instance, Mercedes-Benz held a commanding share of a particular market.
Savage says he has never been more confident about Bedford's prospects, and is riding on the crest of a wave of optimism which was set in train by a record size export conference held concurrently with the Motor Show in Birmingham last year.
The market is likely to stay depressed for some months, but he expects to see a recovery by the end of this year, although world market leadership cannot be achieved until all new products have been introduced.
It looks fairly certain that Bedford will retain not only its name in its autonomous state, but Vauxhall's griffin as well. Both are probably too valuable to be sacrificed for the sake of a new and unfamiliar image.
But it is the efforts to re-establish Bedford and develop GM as a world force which will command most effort in the months and years ahead. It is summed up by another Savage saying. "If you don't sell trucks, you won't eat much steak."