GM is working with suppliers to reduce costs

Article by Anita Panait, on February 18, 2014

While General Motors benefited from the strong pricing of its revamped vehicle lineup, it will try to get more profitable this year by squeezing its suppliers, albeit in a gentle way. GM is asking its 2,700 suppliers around the world to comb their own supply chains and distribution networks.

"We're not just saying, 'This is in your contract, you go figure out how to do it,'" GM global purchasing chief Grace Lieblein told Automotive News last week. "Let's work together to understand the cost drivers in your business." GM's relations with its supplier have been improving steadily since 2005, according to annual surveys by research firm Planning Perspectives.

Lieblein remarked that GM's latest cost-cutting drive will not be a return to the old-school strategy of going after suppliers' margins. The carmaker made an offer of peace with its suppliers last week by getting rid of several controversial terms and conditions it added in 2013 to its base purchasing contract, terms that suppliers felt have exposed them to greater liability.

According to Lieblein, the standoff with suppliers distracted the parties from "talking to them about technology and quality and driving waste from the system." Lieblein acknowledged that the US carmaker made a "misstep" in 2013 when it revised the contract terms without getting some input from suppliers and implementing them without notice.

Only a few, if any, suppliers went to forgo GM's business due to the concerns, but Lieblein decided to get rid of the contentious conditions as a gesture of trust in the carmaker’s suppliers. She remarked that many suppliers already are collaborating with GM to cut costs. "It could be waste in the specs we provide for the part. It could be waste in [the supplier's] operations, or waste in our operations," she remarked.

Topics: gm

If you liked the article, share on:

Comments

Recommended

One of the executives at Volkswagen tagged in the so-called Dieselgate scandal has pleaded not guilty to a list of allegations surrounding the carmaker’s actions to cheat emissions regulations in...
by - February 27, 2017
When the Crown De Luxe saloon was first released in 1972, it was at that time the most lavish Toyota model available to British customers. Both unusual and exclusive, one...
by - February 27, 2017
The ride-sharing fleet of sharing Lyft Inc. will soon include thousands of specially fitted self-driving Chevrolet Bolt electric vehicles, courtesy of General Motors. If plans push through, Lyft’s clients would...
by - February 27, 2017
J.D. Power has officially released the 2017 Vehicle Dependability Study, an annual list of the most dependable brands in the auto industry. Once again coming on top is Lexus, the...
by - February 26, 2017
Citroen revealed that its entry to the Chinese market is moving forward with the planned release of the new generation C5. While still on sale on this part of the...
by - February 26, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries