General Motors fails in bid to fix ties with suppliers

Article by Christian A., on June 24, 2014

While General Motors' global purchasing chief Grace Lieblein has been doing the right things to fix its ties with suppliers, the carmaker ranked at the bottom of a survey of six largest automakers in terms of supplier relationship.

According to a report by Detroit consultancy Planning Perspectives, while GM has a good leadership, its fatal flaw was poor execution by company buyers who interacts with suppliers on a daily basis. Lieblein told Automotive News in an interview that there was difficulty in getting her message of nurturing supplier relationships clear on GM's 6,000-strong purchasing unit.

Lieblein said that she is highlighting greater collaboration with suppliers on technical innovation and cutting waste. She remarked that GM is trying to understand -- from the suppliers' viewpoint -- the big issues, so the carmaker can go after them.

She quipped there is a need for a cultural change across the organization. John Henke, president of Planning Perspectives, remarked that Lieblein’s struggle is a microcosm of GM's broader cultural problems, noting that what executives have been preaching is not heeded by the rank and file.

Henke said that while GM chief executive Mary Barra has been talking about cultural change, the struggles at its purchasing organization shows how difficult that would be. He quipped that Barra is facing “impenetrable walls at several stages going down" through levels of management.

Lieblein managed to improve some relations with suppliers in February, when she struck down some controversial contract terms and conditions implemented last summer.

Supplier felt that those terms and conditions made them exposed to increased warranty liability and placing their intellectual property at risk. Since February, GM has commenced its Strategic Supplier Engagement program, which goal was to improve relations with its largest 400 suppliers by offering a number of perks.

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