[HoosierRon]

Rising shipping costs may see GM source closer

DETROIT, June 26 (Reuters) - General Motors Corp (GM.N: Quote, Profile, Research, Stock Buzz) may look to source some materials or parts closer to the United States because of rising shipping costs, a senior executive said on Thursday.

Bo Andersson, group vice president in charge of GM's global purchasing, said the automaker may look at it on a "case-by-case" basis.

He said half of the cost of shipping materials or parts is based on the price of fuel.

"Example, typically it costs us $2 to ship a radio from Asia to U.S. It's not a big thing." Andersson said. "It costs us $20 to ship a wheel from China to US. So it's case by case."

Andersson said a weaker U.S. dollar was aiding U.S. suppliers, who have been hurting from high raw material prices and competition from low-cost foreign rivals.

"With the fall of the dollar, U.S. suppliers are more competitive on a global basis," Andersson said.

GM's global annual purchasing budget is about $94 billion, with $58 billion for North America, according to the automaker. The figure includes $33 billion for the United States alone.

 

[CJ Thunder]

I am glad that all this is happening. The US needs a kick in the shorts to realize nothing is free and that dominance needs to be a continually rising goal.

 

[PRO_USA1776]

I know I am in the minority of most Americans, but I put my money where my mouth is. I purchased a set of fly fishing gortex waiters from the only company in the United States that manufactures them here; in Montana specifically. $500.00 bones - yes expensive, however I am thinking long term. I will have them 50 yrs, 10 dollars a year. A small price to pay, especially when you pay more than that to see some garbage put out by America hating hollywood!

 

[MaxLegroom]

I've found it disappointing that the Japanese can source all the components for Japanese built cars in Japan, but that GM, Ford or Chrysler cannot do the same. I'd like to see them bring the manufacturing of these parts back home.

 

[camaro_freak]

about time GM... about time

Consumers need to realize we should not be so concerned over who has what product the cheapest (aka WAL-MART) and focus more on those goods that are still made here on US soil.

 

[Sal Collaziano]

Outsourcing in America is more expensive than outsourcing outside the country. This is why GM has done this until now. So, what's going to change? They're not going to gain financially from this.. Maybe they're feeling that since it's no longer a bargain to outsource, they'll pay the hefty fee for American labor... I guess it works out in the end..

 

[osv_alero]

I know I am in the minority of most Americans, but I put my money where my mouth is. I purchased a set of fly fishing gortex waiters from the only company in the United States that manufactures them here; in Montana specifically. $500.00 bones - yes expensive, however I am thinking long term. I will have them 50 yrs, 10 dollars a year. A small price to pay, especially when you pay more than that to see some garbage put out by America hating hollywood!

My wife and I are no different. We don't shop walmart, we check for the made in USA label and we avoid companies with bad employee relations. The best way for us to tell companies what we want is by putting our money to products that support our beliefs.

Example; The next time you buy socks check out where they are made. Nike makes socks in the US and China. They look the same and come in the same sizes. You just have to spend 5 seconds to read which one is made in a place that doesn't add to our billion dollar a day trade deficit.

 

[hotrod1949]

This is a good thing, but their logistics need to be brought into the world of $5+ a gallon fuel as well. Half loaded trucks, expedited shipments do to poor inventory control and other issues would save them many millions of dollars.Strict JIT doesn't work at these fuel costs.

 

[montrealvue]

This is a good thing, but their logistics need to be brought into the world of $5+ a gallon fuel as well. Half loaded trucks, expedited shipments do to poor inventory control and other issues would save them many millions of dollars.Strict JIT doesn't work at these fuel costs.

Good point. I think (and hope) JIT is going out the window as it jack up costs significantly. However, major retailers still want things on their shelves quickly an penalize suppliers severely if they cannot do so. I hope businesses will allow for rail shipping times instead of truck times to keep costs low.

 

[Ming]

Good.

The last thing we need is to become a country of Wal-Mart employees, Import-brand car salesmen and marketers without a means to manufacture things in our own borders. Having a solid manufacturing supplier base here in this country will help stave off that undesireable scenario.

On the other hand, Union-types should not get too happy about "returning to the old days", or Mexico will take up most of the slack.

 

[knicker26]

Ha ha ha ha ha

"We must buy all parts from low cost regions."

Ha ha ha ha ha ha

What a farce. Sounds good on paper. If all goes well you can do it, but it never goes perfectly.

Been there, done that.

 

[377Z]

So the 170 HP 3400 in the 2010 Equinox will be made domestically.

I wonder how overweight it will be...

 

[PRO_USA1776]

My question to you 377Z is when are you going to be a Mechanical or Industrial Engineer? It is easy to point out problems, how 'bout a solution?

 

[montrealvue]

So the 170 HP 3400 in the 2010 Equinox will be made domestically.

I wonder how overweight it will be...

Hey now, be nice....its 185 hp!.........lol. Don't hold your breath on it being "100% made in America"

 

[377Z]

My question to you 377Z is when are you going to be a Mechanical or Industrial Engineer? It is easy to point out problems, how 'bout a solution?

Well, the solution is easy. Either offer a competetive product at a lower price, offer a better product at a competetive price, or offer something the market demands that the competition does not offer at all at a price were the demand and supply curves meet. Simple enough?

I've been a Mechanical Engineer since 1998, not that my profession is in any way relevant to my ability to discern whether a product is competetive or not. The whole attitude that someone needs to be as good or better at something in order to point out shortcomings is absurd. Thats not how society works. Should only automotive designers be able to choose a car based on their looks? Do you need to be a good cook to tell when something tastes bad?

I desperately want GM to get it together & compete, & while I don't expect them to simply start making 3400's in the US instead of China, much less a weaker 3400, I wouldn't be surprised. I will wait until I am truly proud of what GM makes before I cheer for them & buy a GM product again.

But don't let me make you put down your pom-poms.

 

[377Z]

Hey now, be nice....its 185 hp!.........lol. Don't hold your breath on it being "100% made in America"

I was being a bit sarcastic, I had the 3800 in mind when I was typing, since the output has gone down in some cases.

I don't really bank on anything from GM being 100% made in America; I shudder at the thought of the price.

It would be nice to know the real content of each vehicle from each manufacturer; I don't have the content rules in front of me but I've seen them and believe me, they can be very misleading in terms of % domestic/import, not to mention it doesn't account for some sub-assembly/component point of origin. I've also seen stuff in other threads here that mentioned that our domestic purchasing dept's have regard only for price, whereas some of the import nameplates NA factories are better about sourcing locally. IIRC it was a steel distributor, though I can't confirm or deny that.

 

[PRO_USA1776]

377Z, I am not going to get into a pissing match with you. Being a Mechanical Engineer should at least give you an appreciation to the complexities of building an automobile and some of the political and global policies and forces against our companies! At least as good as some left coast celebrity wonk! But I digress, most Americans miss the point. American companies are different when compared to Asian manufacturers. Asian companies are treated as a national resource but ours? Our politicians have their heads so far up Asian company lobbyists it’s pathetic, one of the PREZ candiadates didn’t know that Cadillac was American! When it comes to Europeans we can keep up with them anywhere anytime, the trouble is with Asia we are kept out; we cannot keep playing the game by their rules. I read a lot about competition is good for the American market. Okay, so let’s see some of that same competition in Japan and Korea. What is good for the goose is good for the Gander and for me giving up control of our automotive industry to Asian automakers is no different than foreign oil!

 

[geozinger]

I'm glad to see that they're going to produce more here in NA, but potentially, that could mean Mexico, too..

That said, I too am one of those folks who looks where everything I buy is made. And, it's really damned hard to find a lot of the cheap (inexpensive) goods that are NOT made in China. Of course, it depends on where you shop, too. I haven't shopped in Wal-Mart in years. Oddly, not because of the China issue, it's because of the way they once treated a company I worked for. I felt we were unfairly dumped from their producer list and I swore them off, even though I got laid off shortly after we were no longer a supplier to them... The Chinese-produced junk just steeled my resolve...

I bought an American-made "lifetime" garden hose at a very competitive price at Meijer's this past weekend, and that really made me happy. I was glad to see that I could do that. Like I said before, it depends where you shop. I think that Meijer's (a Michigan-based retailer) tries to source more domestic stuff, but plenty of their stuff is from China. When in Rome...

I've long thought that with the exchange rates, shipping was virtually free. Now that oil has reached such a high price, I guess that's coming back to bite the outsourcers...

Plus, several of my client companies have tried outsourcing to China for parts only to have to deal with reluctant industrial brokers, late deliveries of parts and when the parts get here, they're damaged, rusted or the wrong specs. At least two of them have gone back to using domestic (and local no less) suppliers for their parts, as they find the difficulty and the amount of graft necessary to get their parts in a timely manner is not worth the effort. The additional shipping costs are the final nail in the coffin...

 

[377Z]

Being a Mechanical Engineer should at least give you an appreciation to the complexities of building an automobile and some of the political and global policies and forces against our companies! At least as good as some left coast celebrity wonk!

Thanks, I guess? You'll be happy to know tonights restful sleep is brought to me in part by your recognition.

For the record, I'm not a fan of pissing matches either; & its too bad discussion can degrade to that so frequently. It's a big reason I now avoid posting on some of the more technical discussion threads; most people posting don't have any technical background & are spec sheet jockeys.

Anyways, the complexities of building an automobile are challenges all manufacturers face, imports don't get a pass on this. I don't really subscribe to the but I don't buy the whole conspiracy-esque notion that NA manufacturers are poor red-headed stepchildren who just can't catch a break. Regardless, one never plays a better game by complaining about the rules. Perhaps it is the engineer in me, but the way I see it as making the best product you can within the constraints--i.e. you do the best with what you've got, and I KNOW they can do better than chinese 3400's in Equinoxes, or claiming it will take $8/gal gas before Americans stop buying trucks.

Adapt, or die.

Theoretically, it is good that outsourcing will be reduced (for now). But the way the domestic three do business with suppliers leaves the glimmer of hope very faint, and just wait until the dollar recovers.

 

[PRO_USA1776]

I believe Ford GM and Chrysler are responding to most Americans. Americans except for a small minority could give a rats behind where their stuff is made, unless it affects their job and family. That being said, I am not a conspiracy theorist, but I have witnessed some interesting cultural behavior in Japan. As for the Adapt or die comment, spoken like a true westerner. If we were Japanese there would be no question who we would be cheering for and we would be doing whatever to ensure their success!