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The Epsilon solution: GM's fresh interpretation of the global-car gambit aimed at winning back lost mid-size customers. (Cover Story).

Article Excerpt
General Motors has had quite enough of the punishment Honda. Toyota and others have been doing out for years. Throughout most of the 1990s, GM's mid-size car market share bombed-from nearly half of that critical segment's volume to less than a third. Since 1988, GM has squandered some four million sales to competitors. Something had to be done to keep the world's largest vehicle manufacturer from devolving into a pickup truck and SUV specialist.

The something is Epsilon, a massive initiative that will eventually involve 1/6th of the cars GM builds around the world or 1.4-million units annually. Eight brands will sell Epsilon products. The program will eventually encompass over a dozen distinct body styles, up to eight manufacturing plants on three continents, stickers ranging from below $20,000 to over $40,000, and approximately 10,000 employees. European plants are already working overtime to fulfill demand for the first models out of the chute, Vectras sold by Opel and Vauxhall and Saab's 9-3.

Epsilon is certainly the grandest world-car umbrella in GM's history but it's hardly the first trip down global lane. In 1976, Chevrolet tried to stave off the Japanese with its Chevette, a subcompact spun off an Opel-engineered T-car platform. Two decades later, Cadillac took its turn with the Catera, a mid-size sport sedan riding on Opel Omega underpinnings. Both of those projects were miserable failures. Nevertheless, GM is betting on the global approach again, though this time with an obvious difference. Since Epsilon is a hundred times grander than any previous international project, the risks involved are staggering, even to GM.

To find out how Epsilon can succeed in the wake of global car designs that failed, we tapped two experts on the subject. One of them, GM vehicle line executive Gene Stefanyshyn, was not only present at Epsilon's 1997 creation, he's also the architect of several of GM's key global strategies.

Formulating the Epsilon solution began six years ago. Stefanyshyn notes, "The planning began in 1997 among German, Swedish and American engineers at the (Warren) Tech Center. The first step was acknowledging the Catera was not the way to do a global car design. We realized that bringing all parties to the table early was essential to success. We found that everybody's got to be in the mood to...

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