Case Jose Lopez de Arritoua
Overview
The case study “Jose Ignacio Lopez de Arriortua” outlines the automotive’s executive success and tribulations among GM and Ford, known for his charismatic, competitive, innovative and controversial manufacturing practices and sourcing strategies. Lopez was responsible for the emergency of GM as one of the most cost competitive operations in Europe, by working with suppliers to cut component costs. Companies selected to do business with GM would have to bid among each other, being the lower bid the winner. This tactic enabled GM to build a large network of suppliers from an operation that was before limited only to German companies.
After working for GM in Europe, Lopez was appointed as Vice President for Worldwide Purchase in Detroit, where he worked closely with his assistants who he called “warriors”. Cost cutting was at the center of his tactic, and it was somewhat controversial to some that believed that he was eliminating GM core capabilities. Lopez developed the PICO (Program for Improvement and Cost Optimization of Suppliers) where suppliers would work against each other to achieve the lower costs as opposed to the lean manufacturing concept where suppliers work closely to manufacturers to lower costs.
Lopez had low regard for intellectual property, taking his suppliers plans and research to its competitors. Suppliers were forced to take the losses as for most of them GM was their main source of revenue, and as time passed they were getting more and more unhappy with GM practices. On 1993, Lopez left GM to join Volkswagen as Chief of Product Optimization and Purchasing and also nominated for the company’s board.
At Volkswagen, Lopez dream, The Plant X, had been given more attention by Ferdinand Piech the CEO of the company. In the past, he had presented the project to GM, but was refused. He envisioned a manufacturing facility such as the modular consortium where suppliers would perform the actual production assembly. This plant was later
The case study “Jose Ignacio Lopez de Arriortua” outlines the automotive’s executive success and tribulations among GM and Ford, known for his charismatic, competitive, innovative and controversial manufacturing practices and sourcing strategies. Lopez was responsible for the emergency of GM as one of the most cost competitive operations in Europe, by working with suppliers to cut component costs. Companies selected to do business with GM would have to bid among each other, being the lower bid the winner. This tactic enabled GM to build a large network of suppliers from an operation that was before limited only to German companies.
After working for GM in Europe, Lopez was appointed as Vice President for Worldwide Purchase in Detroit, where he worked closely with his assistants who he called “warriors”. Cost cutting was at the center of his tactic, and it was somewhat controversial to some that believed that he was eliminating GM core capabilities. Lopez developed the PICO (Program for Improvement and Cost Optimization of Suppliers) where suppliers would work against each other to achieve the lower costs as opposed to the lean manufacturing concept where suppliers work closely to manufacturers to lower costs.
Lopez had low regard for intellectual property, taking his suppliers plans and research to its competitors. Suppliers were forced to take the losses as for most of them GM was their main source of revenue, and as time passed they were getting more and more unhappy with GM practices. On 1993, Lopez left GM to join Volkswagen as Chief of Product Optimization and Purchasing and also nominated for the company’s board.
At Volkswagen, Lopez dream, The Plant X, had been given more attention by Ferdinand Piech the CEO of the company. In the past, he had presented the project to GM, but was refused. He envisioned a manufacturing facility such as the modular consortium where suppliers would perform the actual production assembly. This plant was later