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GM concerned about suppliers’
GM concerned about suppliers’ viability
Posted Monday, Oct 26, 2009, 3:36 pm in Employee News
General Motors Co. expects more parts suppliers will struggle financially and is monitoring about 150 companies as the auto industry tries to recover, The Detroit News reported.
Bob Socia, Vice President of GM’s global purchasing and supply chain, expects some suppliers will have trouble surviving as industry volumes increase next year, when GM estimates North American production could rise to 2.8 million units from about 1.8 million this year, the paper said. “Our concern has to do with liquidity as some of these suppliers may be still in a weak financial position and would have to go and try to secure additional funds to shore up working capital and may not be able to get it,” Socia told the News. “I do think we’ve got some troubled waters out in front of us for next year.”
Historically, GM has paid suppliers once per month and an average of 47 days after parts are delivered. But last month, GM said while the 47-day average will remain in place, payments will be made every Tuesday starting with Nov. 1 deliveries.
Socia has aligned purchasing with engineering to improve communication and hasten decisions affecting suppliers. He also has focused on improving relationships with suppliers. (The Detroit News)
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