GM to its suppliers: Let's work together

[notacarguy]

Automaker seeks to ease strained relations with parts makers while still slashing costs.

By Brett Clanton / The Detroit News




As General Motors Corp. tries to get its North American auto business back on track, the automaker unveiled a new cost-cutting plan to its top U.S. suppliers that will push them to lower prices, improve quality and streamline operations.

The three-year initiative is also aimed at mending GM's strained relations with parts makers. The automaker struck a conciliatory tone during a nearly day-long meeting Thursday with 300 suppliers. But that goodwill will likely be tested next month when GM gives individual parts companies specific cost-cutting targets.

While the new plan stresses more collaboration, rewards top achievers and takes into account shifting market conditions, analysts said it may also give suppliers less flexibility in how they reduce costs and pressure them to open factories in low-cost countries such as China and India to meet tougher targets.


Source: http://www.detnews.com/2005/autosins...A01-325001.htm

[1BadPig]

When most of the GM tier 2 & 3 suppliers in financial brink, this will go over well. I still cringe whenever I think back to the Lopez days... "You will give us 12/6/6 and you will like it (12% price cut in the first year, and 6% in year 2 and 3). Oh, by the way, we gave your designs to cheap suppliers in Mexico and the Far East and you have to beat their price or else. Have a nice day."

[plane]

We want rich Corinthian leather and we want it for free!
Actually, we want you to pay us for the privelege of supplying parts.

Seriously though, if Delphi goes under GM's going to be in a world of hurt.
What's it going to take to reverse this slide? A lower cost structure. Can that be obtained with NA manufacturing? You bet. But it's going to take some serious arm-wrestling with the union to make that happen.

[tgagneguam]

I'm not a scholar in the understanding of GM's relationships with its suppliers, though my understanding is that even prior to Lopez, they might best be described as toxic.

I imagine suppliers want real action; anything less simply would be construed as another disingenuous offer from Detroit. And wouldn't that be irritating?

[SilverZ]

Originally Posted by 1BadPig

When most of the GM tier 2 & 3 suppliers in financial brink, this will go over well. I still cringe whenever I think back to the Lopez days... "You will give us 12/6/6 and you will like it (12% price cut in the first year, and 6% in year 2 and 3). Oh, by the way, we gave your designs to cheap suppliers in Mexico and the Far East and you have to beat their price or else. Have a nice day."

Anything to pressure the inefficient strategies today to move more inline with cost competitive strategies. We cannot be competitive working with high labour rates at inefficient plants. It is time for the fat inefficiences to go - One way or another.

[uujjj]

Originally Posted by SilverZ

Anything to pressure the inefficient strategies today to move more inline with cost competitive strategies. We cannot be competitive working with high labour rates at inefficient plants. It is time for the fat inefficiences to go - One way or another.

Yes, let's do that. Let's get rid of all those "inefficient" Americans from the production process. It will make all our cars way cheaper. In fact, let's get rid of these "inefficient" American workers from all parts of our economy. It will make everything way cheaper.

Only problem is now nobody can afford those cheaper cars!

The "free trade" fraud keeps rolling along . . .

[tombalas]

I'm not sure things are all that bad. This morning I attended an outdoor classic car show in Summit, NJ, and GM had its 2006 models on display (Solstice, HHR, Impala, Cobalt SS and Suburban) (only Volvo and Lotus had their new models on display at the show - the rest were classics). The amount of people checking out the GM display was impressive. But, I was even more impressed with how well the cars looked - they looked much better than prior models. The Solstice and HHR were really grabbing peoples' attention. My wife commented that GM is going to do just fine if they keep putting out such attractive and well built cars. Let's hope she's right. :-)

[paul3230]

Again, this is another area where Japan dominates and we don't...I just don't get why GM is just now coming the realization that beating your suppliers down isn't the best way to do business.

[Dizzer]

Here's one salesman's message to GM -

"We're through working with you".

I'll know you're serious about innovation and change when you give us engineers and designers to deal with instead of bean counters and pencil pushers at Worldwide Purchasing. I'll know you're serious when your product people stop telling me to "go talk to the buyer first". We don't sell to GM anymore because GM doesn't want to talk about anything except price. Period. Just ask the Tier 2 and 3 guys who go to a plant with a new process or product. Just watch what happens when the plant turns it over to Purchasing. There is no advantage anymore for most small to medium vendors to go after GM's business. In fact, we believe it is in our strategic interest to have them tie down our competition with work. We know that they won't be making any money at it.

[56 Starchief]

Only way to defeat the enemy is to work together---ahem--UAW--ahem man itchy throat.

[Smaart Aas Saabr]

Originally Posted by tgagneguam

I'm not a scholar in the understanding of GM's relationships with its suppliers, though my understanding is that even prior to Lopez, they might best be described as toxic.

I imagine suppliers want real action; anything less simply would be construed as another disingenuous offer from Detroit. And wouldn't that be irritating?

Originally, GM didn't have suppliers. GM owned all the suppliers... AC spark plugs, Delco electronics, Packard plug wires, American Axles, Rochester carbs and locks, etc etc

[01cavalier]

Id much rather see them all work together in a good way for a change, now if only the unions would be willing to do something good for a change...

[Gm786]

I think it will be a good move it GM does that with it's suppliers. A company or corporation's suppliers are very important of course.