We’ve been told again and again that pooled parts purchasing produces profits. Baloney, Opel interim-chief Thomas Sedran will say in an interview that Germany’s Tagesspiegel will publish tomorrow. He says something GM customers have known for a while: Parts from GM’s bin often are too expensive, and by sourcing them elsewhere, one can save a lot of money. “We are talking a significant order of magnitude,” Sedran will say tomorrow.
According to Reuters, which received an early copy, Sedran will say:
“GM has global requirements for parts and components that are unusual in the industry. A starter is tested at 40 degrees below zero, just as would be needed in Alaska, otherwise it fails the test.”
Sedran hasn’t been Opel chief for long. With a little more experience, he would know that he is on the right track towards the rest of the story.
“The profit is in purchasing,” is an ancient rule in the business, and not all profits generated by Purchasing in Detroit are passed-on to Rüsselsheim. Internal parts sales are a favorite way to shift profits elsewhere. Maybe that’s what Sedran is trying to say. But I doubt it will further his career.