GME Quality Assurance Management Our Turnaround in Quality Peter G. Dersley, Vice President GME Quality

Multibrand-Event In the 90’s Opel’s reputation for Quality – no longer true Profit maximization at the expense of quality The decline of a brand GME at a crossroads GME’s quality ratings were not good

Multibrand-Event GME reports back impressively Product again takes center stage Strong new models from Rüsselsheim Success only a question of time if GME maintains this course GME quality recovery exceeds expectations Approaching the present

Multibrand-Event Quality pays off – less warranty claims 1 Year old cars 65 %66 % Number of customer complaints * 3 Year old cars * 3 Years: Model year 2006 Prognosis based on selected warranty data (high mileage cars)

Multibrand-Event 3,34 2,70 3,60 Renault Alfa Fiat VW Saab Audi Toyota Chrysler Seat Mazda Ford Smart Porsche Peugeot Mitsubishi Honda BMW Jaguar Skoda Mercedes Volvo Opel Hyundai Daihatsu Subaru Opel among the best in dealer satisfaction Source: DSI Study Germany – FAW University Bamberg (5 = best score/very satisfied) Satisfaction – Overall – with quality – with model line-up OPEL

Multibrand-Event Continuous progress in bi-annual Car Check Study Source: Bi-annual Car Check Study / Customer Complaint Index by Model Opel  

Multibrand-Event Gold Medal for the Meriva in the annual German TÜV Report 2007 Meriva scores best among 113 cars across all segments The majority of the GME models improved significantly vs. last year’s report Source: TÜV Report 2007 – Germany

Multibrand-Event Yes, GME quality recovery has exceeded public expectations What has changed? What has driven the turnaround in GME quality performance? What has changed? What has driven the turnaround in GME quality performance?

Multibrand-Event Leadership attitude: What must I do to “be the best”? Transition process in quality awareness Role/ Responsibility Systems/ Processes Culture: Worrying about quality Leadership attitude: What is the minimum I must do to stay out of trouble? Role/ Responsibility Systems/ Processes

Multibrand-Event Transition process in quality awareness Step 1 Provision of prerequisites Step 2 Enable transition People involvement Capable organizational structures Capable business processes Reasonable resources Clear targets and objectives Leadership involvement Coaching and support No compromises, no excuses Customer orientation

Multibrand-Event Quality is defined by customers’ expectations Fundamental dimension of quality: Workmanship and finish Freedon from faults Reliability/durability Perceptual quality Q Q

Multibrand-Event Implementing the GM Global Quality System Manufacturing Supplier Development Aftersales Comprehensive approach covering all areas Objective World-class quality World-class quality

Multibrand-Event First priority was the improvement of initial quality delivered to our customers 1. Rapid Improvement 2. Quality Launches Today Model Year Warranty Claims Past Setback in quality with model launches Minor Improvement

Multibrand-Event Structured problem resolution and tracking process for rapid improvement Prioritization of problems Personal accountability Rapid decision making Carline specific action plans Tracking and alert system Process control Cornerstones of the GM-PRTS System Lessons Learned Implementation SolutionFeedback ConfirmationRoot Cause Problem Detection

Multibrand-Event Source: GM Global Problem Resolution Tracking System (PRTS) Higher problem solution throughput Structured problem resolution and tracking process for rapid improvement Continuous lead-time reduction until improvement implementation more than 2000 p.a.Four times faster Objective

Multibrand-Event GM Global Launch Process to ensure production readiness Traditional Industry Approach Start of production Pilot 1 Pilot Line Pilot 2Pre-Prod. Plant Line Starting late Late plant involvement No integrated approach Months prior to SOP High quality risks through ramp-up of production GM Global Launch Process Pilot 1Pre-PilotPlant Training Input for optimization Bucket Build Process validation Training of employees Stable processes at ramp-up to ensure quality

Multibrand-Event Significant improvement in launch quality Start-up warranty blips after launch Introduction Global GM Launch Process Quality run-out of predecessor Launch peak-successor Recovery to previous quality level Warranty Cases Source: GME warranty system – total Europe data / Vehicles 2 months in service

Multibrand-Event Implemented in all assembly plants Zero defect approach through GM-Global Manufacturing System (GM-GMS) People Involvement Standardization Build-In-Quality Short Lead Time Continuous Improvement Elements Product quality standards Manufacturing process validation In-process control & validation Quality feedback / feedforward Quality system management Fundamental GM-GMS principles Source: GM Global Manufacturing System (GM-GMS)

Multibrand-Event Quality Andon System at each work station to ensure Build-In-Quality Correction Andon Cord Previous production step Don’t accept any defects Don’t accept any defects Don’t pass any defects Don’t pass any defects Prevent Defects Following production step Source: GM Global Manufacturing System (GM-GMS)

Multibrand-Event In-line quality checks according to the GM Standardized Inspection Process (SIP) Body Shop End of Line Check Dyn. Vehicle Testing Water Test Final Check Squeak & Rattle Test Audit Shipping CheckPre-Delivery Check (Dealer) Paint ShopAssembly Vehicle delivery to our customers Source: GM Global Manufacturing System (GM-GMS)

Multibrand-Event Voice of the Customer Wall in each GME Plant External Quality Results > Key Metrics Follow up on details we need to work on

Multibrand-Event Implementing the GM Global Quality System Manufacturing Supplier Development Aftersales Comprehensive approach covering all areas Objective World-class quality World-class quality

Multibrand-Event GM Global Supplier Quality Improvement Process Continuous Improvement Performance Monitoring Problem Reporting / Resolution Level I Controlled Shipping Level II Controlled Shipping Quality Workshops Improvement Meeting Global Sourcing Early Production Containment Rate Production Part Approval Prototype Sample Approval Pre-Production Meeting Advanced Product Q-Planning Sourcing Decision Supplier Assessment Escalation Steps Problem ResolutionQuality Planning Time Line Start of production

Multibrand-Event Two metrics confirm improved supplier quality Supplier caused quality disruptions Source: GM Global Quality Tracking System (GM-GQTS) - 94 % NOK parts per million delivered - 87 %

Multibrand-Event Implementing the GM Global Quality System Manufacturing Supplier Development Aftersales Comprehensive approach covering all areas Objective World-class quality World-class quality

Multibrand-Event Paradigm shift: Use potentials in product design Reactive Design QualityPredictive Design Quality Quality Tested In Evolving design requirements Extensive design rework Product performance by ”build and test” Performance & “producibility” – problems fixed after product in use Quality Designed In Disciplined CTC flowdown Controlled design parameters Product performance modeled and simulated Designed for robust performance & “producibility” FromTo

Multibrand-Event Paradigm shift in product design and development In the 90’s – Fix Initial Quality Problems Current Engineering group established Statistical problem solving introduced 2000’s – Robust Design (Quality in development) Focus on Long Term Quality and Perceptual Quality Design For Six Sigma Improved validation Quality function verifies design

Multibrand-Event Vehicle Line Executive Team: Vital for fast and balanced problem-solving  Full responsibility for project deliveries  Makes key trade-off decisions Core VLE Team Finance Product Engineering Manufact. Engineering Quality Extended VLE Team Finance Product Engineering Manufact. Engineering Quality Vehicle Line Executive (VLE)

Multibrand-Event Quality means more than just defect free cars Perceptual Quality Process  Styling (Harmonious flowing lines and contemporary)  Materials (Organic-feel, harmonious and practical)  Ergonomics (Comfortable and understandable at 1st glance)  Functionality (Usable space as well as Surprise & Delight)  Good Fit & Finish (Attention to detail and sturdiness)

Multibrand-Event Perceptual quality... when the senses pipe up The new Corsa – a class of his own Car of the Year 2007 (What Car, UK) Best Small Car (ADAC, Germany) Family Car of the Year (Belgium) Autobest 2007 Award (Central / Eastern Europe) Topauto 2007 Award (Jury: 140 Journalist)... and others

Multibrand-Event Implementing the GM Global Quality System Manufacturing Supplier Development Aftersales Comprehensive approach covering all areas Objective World-class quality World-class quality

Multibrand-Event Direct customer feedback to the dealer All customer verbatims are scanned and provided in the Aftersales database. Dealer

Multibrand-Event World-class quality approach Manufacturing Supplier Development Aftersales Next Steps / Opportunities Next Steps / Opportunities

Multibrand-Event Optimization of... Production Systems... Design Systems World-class quality approach Inspection and Repair Function Orientation Problem Prevention >Minimize in-process defects Perfection > Zero in-process defects > Fulfillment of customer expectations Early 90’s Industry Average Today Improvement of quality and customer satisfaction Our objective GM Quality System