HAMILTON -- Senior executives of General Motors Corp. vowed yesterday that the world's largest auto maker will lead the quality rankings by 2005.

"We have to be best in class in every segment," GM North America president Gary Cowger told representatives of the auto maker's Canadian suppliers gathered in Hamilton for the company's supplier-council seminars, held every two years.

The first key measure that GM intends to lead is the annual initial-quality study done by consulting firm J.D. Power and Associates, which measures buyers' first 90 days of ownership of a new vehicle and records the problems those consumers report.

The next step will be to jump to the top of the long-term quality rankings by 2006, Kevin Williams, GM's vice-president of quality, told the group.

The final step is to lead in what he and Mr. Cowger called perceived quality, which generally refers to how the market regards the quality and reliability of vehicles.

"For the first time, we're absolutely saying we're in this game to win," Mr. Williams said.

GM ranked fourth in the J.D. Power initial-quality study this year, with 134 reported problems for every 100 new vehicles sold in the United States.

Among major auto makers, that was one worse than the industry average of 133 and put GM behind Toyota Motor Corp., BMW AG and Honda Motor Co. Ltd. in North America.

"We are not satisfied with fourth place," Mr. Williams said.

A General Motors of Canada Ltd. assembly plant in Oshawa, Ont., that makes Chevrolet Impala and Monte Carlo passenger cars ranked first in the J.D. Power survey among all North American assembly plants.

An internal tracking study shows that GM has reduced its problems per 100 vehicles to 127 so far this year, Mr. Williams said, adding that 115 problems for every 100 vehicles should be enough to lead the rankings in 2005.

One of the keys to improving quality is making sure there are no problems from parts makers when new vehicles are launched, he said.

"Great products, poorly launched, become poor products," Mr. Williams said.

This will be critical in the next year as GM launches 22 new or redesigned vehicles, a figure Mr. Cowger sees as crucial to reducing the company's dependence on six-year, interest-free loans and other incentives to move the metal off dealers' lots.

"I think you'll see a mitigation of this incessant incentives increasing year over year," Mr. Cowger said, with new vehicles such as the Cadillac SRX and SLR being sold without incentives.

GM intends to boost its purchases from Canadian parts makers to $20-billion by 2005, he added, up from $16-billion in 2002 and $3-billion in 1991.

"Four-billion dollars is there for the taking," Mr. Cowger said.

He added that those parts suppliers that meet the standards of quality, on-time delivery and price demanded by GM will win more business.

Mr. Williams said Canadian suppliers have improved their quality performance from two years ago, when he criticized their operations as subpar.

Friday, Nov. 7, 2003, Page B2