Ford and GM Crossover Production Halted Due To Indian Labor Strife
By Edward NiedermeyerOctober 29, 2009
Well, the “what makes an American car American” debate just got a little more interesting (and a lot more interesting than the “who ‘won’ the CTS-V Challenge” rigmarole). Automotive News [sub] reports that Ford’s Oakville, Ontario plant and GM’s Delta Township plant have ceased production of Flex, Edge, MKX, MKT, Acadia, Traverse and Enclave as supplier Rico Automotive is unable to supply key transmission components. The reason for the parts stoppage: labor violence… in India. Turmoil at Rico’s plant in Gurgaron (30 miles from New Delhi) came to a head on the 18th, when clashes between temporary workers and factory staff left an employee dead. Now GM stands to lose 7,200 units of production, while Ford admits “several thousand” units won’t be built over the next week. This striking illustration of how globalized the auto industry is, is causing some analysts to question the wisdom of using Indian suppliers. They argue that labor unrest like this is common in the subcontinent, compounding already-challenging logistical and shipping-cost issues. But GM and Ford aren’t exactly about to stop investing in Indian firms and production capacity either, since that market shows more growth potential than the US. One thing is for sure: there’s no such thing as an “American car,” let alone an “American car company” anymore. Government ownership notwithstanding.
Posted in News Blog | Overseas | Suppliers | Union News | 24 comments 
Suppliers Still Looking For Bailout
By Edward NiedermeyerOctober 9, 2009
“There must be increased access to capital through the entire supply chain — from the largest tier one to the smallest family-owned firm,” Dave Andrea, vice president of industry analysis and economics at the Original Equipment Suppliers Association told the Senate Banking Committee [via The Freep]. “Without assistance this country will needlessly lose manufacturing capacity, technology development and jobs.” Which is about what suppliers have been telling congress since bailout mania struck. What the Freep fails to properly explain is that the supplier bailout passed earlier this year was an unmitigated disaster for suppliers and their relations with OEMs.
Posted in Bailout Watch | Chapter 11 | News Blog | Suppliers | 4 comments
Delphi Exiting Bankruptcy
By Edward NiedermeyerOctober 6, 2009
After four years in Chapter 11 protection, GM’s largest supplier Delphi is returning to the land of the living. For now. Along the way, though, Delphi racked up some impressive bills. Automotive News [sub] estimates that GM has spent $12.5b on Delphi during its bankruptcy, and has pledged a further $1b in debt assumption, $2b in forgiven claims and $1.75b in investments in the new company. For these (taxpayer funded) sacrifices, GM will get Delphi’s money-losing US operations and steering unit business. Delphi’s new owners Elliott Management and Silver Point Capital walked away from $3.5b in debt to assume control of the company, and $6.25b in pension obligations were dumped by Delphi and had to be assumed by the Pension Benefit Guarantee Corporation. Delphi’s bankruptcy alone cost $400 million in legal and professional fees. The new company’s manufacturing base has been migrated outside the US, and its main business will be in supplying electronics and air conditioning systems. Expected annual revenue is $10 billion compared to the $22.59 billion the firm earned in 2005, before entering bankruptcy. But rather than tut-tutting the waste, greed and ineptitude that has marked Delphi’s bankruptcy, let’s take this moment to remember the thousands of employees and retirees Delphi has cast aside in the name of rescuing the US auto industry. For, as the Sibyl of Delphi foretold in the 9th Century B.C.E., love of money and nothing else will ruin Sparta.
Posted in Chapter 11 | News Blog | Suppliers | 7 comments
Daimler Suit Imperils New Chrysler Launches
By Edward NiedermeyerOctober 5, 2009
The Detroit News reports that nastiness between Chrysler and its former overlords at Daimler could prevent the much-needed (by ChryCo) launches of new versions of the 300/Charger and Grand Cherokee/Durango. Apparently production of these new products can’t take place until Daimler and Chrysler agree to terms for Daimler-supplied components. Chrysler needs to resolve its legal differences with Daimler within 20 days in order to prevent delays to the roll-out of the Grand Cherokee/Durango. If the conflict continues, Chrysler admits it won’t be able to find a new supplier until January 2011. The Grand Cherokee/Durango and 300/Charger are planned to be Chrysler’s only 2010 debuts.
Posted in Law and Order | New Cars | News Blog | Suppliers | 32 comments
Suppliers Opt Out Of Chrysler’s Product Revolution
By Edward NiedermeyerSeptember 29, 2009
Any hippie will tell you what Chrysler is finding out as it tries to kick-start its product development to life: karma’s a bitch. In the pre-bailout era, Old ChryCo held the dubious distinction of having the worst supplier relations in Detroit. Now, for some odd reason, suppliers aren’t wanting to shoulder the cost of developing components for new Chrysler vehicles. The Wall Street Journal reports Chrysler isn’t making any production volume promises for future products (an ominous sign in its own right), which means cash-strapped suppliers aren’t rushing in to spend their money developing parts. “Why would we want to tie ourselves to Chrysler when GM and Ford are a known factor?” asks one interior-component supplier. “We’re already financially strapped so we have to be more choosey in where we will spend our money.” Meanwhile, this supplier recalcitrance is making it hard for Chrysler to plan anything.
Posted in News Blog | Suppliers | 23 comments
Delphi Stealth Bailout Approved By China
By Edward NiedermeyerSeptember 29, 2009
Chinese T-bill buyers may have provided the capital for GM’s bailout (and by extension, GM’s bailout of Delphi) but American taxpayers will have to pay them back eventually. Meanwhile, the Chinese government gets to yea-or-nay GM’s rescue of its spun-off supplier. And the yeas have it. Automotive News [sub] reports that GM will assume more than $1b worth of Delphi’s debt, while waiving $2b in claims against its largest supplier. Additionally, GM will invest $1.75b in Delphi and provide an unspecified amount of new debt. China’s only concern was that Delphi set up firewalls between GM and its other Chinese clients in order to protect the intellectual property of Chinese firms. With that measure taken, and Chinese approval secured, Delphi appears on track to end its four year sojourn in bankruptcy by month’s end. Can GM afford this kind of outlay to keep Delphi alive? Shouldn’t Delphi have been given its own separate bailout to keep costs transparent? No matter, it’s fait accompli at this point. At least the Chinese government was kind enough to approve the deal (oh, and back its financing in the first place).
Posted in Bailout Watch | China | News Blog | Suppliers | 9 comments
Quote Of The Day: Least Necessary Use Of The Word “Obviously” Edition
By Edward NiedermeyerSeptember 24, 2009
We obviously were micromanaging our cash — down to the penny, down to the minute — because that was our lifeblood
GM Spokesman Dan Flores in an Automotive News [sub] story on GM’s decision to pay suppliers weekly instead of monthly. The savage irony? By making payments monthly, GM actually had a harder time managing its dwindling cash pile during the bad old days referenced by Flores. And now? “We’re not going to save money by doing this,” says Flores. “But it’s a better, more reasonable, smarter way to run the business.” On the downside, the changes won’t mean suppliers will get paid any sooner as GM plans on maintaining the 47-day lag between supplier delivery and payment. Plus ça change…
Posted in News Blog | Quote of the Day | Suppliers | 4 comments
Positive Post of the Day: I Wish I Were a Big GM Supplier Edition
By Edward NiedermeyerAugust 27, 2009
Yes, that is what I’d truly like to be. For if I were a big GM supplier, they’d pass the big old savings on to me. And if that doesn’t make you want to break into song, you’ve never dealt with a Mr. Bo Andersson. Yes, now that Andersson has taken his fight to make the world a less cheerful place to Russia (where such causes are far better rewarded), GM’s supplier relations are going swimmingly. Andersson’s replacement, Bob Socia, has told GM’s suppliers that under his benevolent reign, GM purchasing will split any future cost savings on parts even-steven with the supplier. Of course, it’s up to the supplier to come up with the cost savings, but c’mon. Really. Just, c’mon. “We think this decision will help generate enthusiasm in the supply base for doing business with the new GM,” say GM spokesfolks. And guess what? They’re right! [via Automotive News [sub]]
Posted in News Blog | Positive Post Of The Day | Suppliers | 11 comments
UPDATE: Supportthebigthree.com Run by Toyota Supplier
By Robert FaragoAugust 12, 2009
After our post on the “1000-DAY BIG THREE PLAN” to save the domestic automakers, TTAC commentators have been wondering about the man behind the website supportthebigthree.com. I’ve just got off the blower with site founder Sid Taylor who, it turns out, is the CEO of an automotive supplier named Set Enterprises. Scanning the site, it turns out the campaigner who would have Americans buy only Chrysler, Ford and GM products has a contract with Toyota. When asked about the apparent contradiction, Mr. Turner said the money involved is so small as to render the contract meaningless. “If I didn’t have Toyota it wouldn’t have any impact on my business.” Besides . . .
Posted in News Blog | Sign of the Times | Suppliers | 45 comments
Ford Seeks Supplier Concessions
By Edward NiedermeyerJuly 13, 2009
While GM touts its less-than-revolutionary “interbuildability” scheme, Ford is approaching global product rationalization from another direction: on the backs of suppliers. Automotive News [sub] reports that Ford is requesting that its suppliers turn over component information to other firms if they are unable to supply a given assembly plant. These so-called “transfer agreements” involve handing over specs and technical drawings to other suppliers, which would then assemble the parts designed by the original supplier. Ford’s supply firms are understandably nervous about the initiative, arguing that it would allow Ford to use competition to squeeze suppliers on price. Also, the possible transfers to overseas firms could allow them to remarket the original suppliers’ designs and other intellectual property to other firms.
Posted in News Blog | Suppliers | 22 comments
POWERED