GM creates crisis team to solve parts shortage, price hike to be expected

Article by Christian Andrei, on April 9, 2011

Although General Motors has been able to re-source many parts affected by the Japan disaster, Barclays Capital analyst Brian Johnson still doesn’t think that things will be back to normal as it’s likely that prices of vehicles will be raised. Last Thursday, GM CFO Dan Ammann addressed analysts and told them how the company dealt with the Japan crisis.

Johnson sent a note to analysts, saying that GM has created a crisis team composed of hundreds of staffers in purchasing, manufacturing and supply chain management.

This team is tasked to recognize at-risk components and find replacements for the parts that are affected. According to GM spokeswoman Reneé Rashid-Merem, a "small number" of its workers are in this team in Japan and that most of those who are there are fulfilling their normal job duties. She describes this team as “cross-functional” and she also emphasized that GM is doing monitoring and making only the necessary changes.

Johnson said further than the responsibility of the team members that are at the supplier plants is to help restart and resource component production and to guarantee that GM gets the same treatment given to Japanese carmakers when it comes to component inventory.

Ammann also told the analysts to expect a reduction in incentives as well as higher pricing throughout the industry as the result of parts shortage in Japan. Both Ford Motor Co. and Toyota Motor Co. have confirmed that they will be raising the prices of their vehicles.

Topics: gm, united states

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