If you’re a parts supplier to General Motors, you have two choices: bid for business as it comes up or open your books and factories to skip the bidding process.
According to Automotive News, the latter option is part of GM’s One Cost Model launched in 2013, allowing the automaker to analyse a supplier’s internal cost data to identify cost-cutting opportunities. In exchange, suppliers can receive exclusive parts contracts that can last the lifecycle of a model and GM will not put that particular piece of business up for bid.
This all requires a significant amount of trust from suppliers, a commodity which has been lacking at GM since the ’90s.
Tesla Motors, Inc. released its first quarter financial results yesterday, which featured a number of milestones for the auto maker. Among them, Tesla’s revenue rose 83% from the last quarter to $562 million, a record high for the company.
After we posted our take on the reported ouster of EV startup Aptera’s founders, Popular Mechanics jumped in to deny the charge. The magazine dutifully reported that Aptera’s founders had conveniently decided to take a vacation, unquestioningly citing the assertions of Aptera CFO Marques McCammon. But it seems the underlying conflict– whether to go to market with the existing product or cut costs while waiting for federal funding to produce a redesigned vehicle– has been resolved in favor of Aptera’s new auto industry insiders. A company press release confirms that the 2e has been delayed until 2010, indicating that the lack of federal funding (or some unanticipated private investment) is the stumbling point. The situation with Aptera’s founders, however, is still something of a mystery. And it’s not the only curiosity to be dredged out of Aptera during this challenging interlude.
Were you looking forward to GM’s first post-bankruptcy financial report, set to be released on Monday? We sure were. Right up until we read that the earning statement won’t be compliant with a little something called Generally Accepted Accounting Principles. Automotive News [sub] reports that GM will use so-called “managerial accounting,” (do we have an accountant in the house?) until Q1 2010 results are filed using SEC-approved “fresh start accounting.” The SEC is apparently aware that GM is still transitioning to the post-bankruptcy accounting system, and has reportedly approved GM’s timetable for compliance. Meanwhile, GM’s 3rd quarter results will be announced in two parts, for the period it was in bankruptcy (June 1- June 9) and after (June 10- September 30). GM’s spokesperson is kind enough to explain:
In some cases, it’s not comparable to do a year-to-year comparison. Anything with a cost component to it, won’t be comparable. For sales and revenue, it will be comparable. It’s going to be kind of complicated this time around. There’s no way around that. It’s not a standard situation.
Don’t you just hate it when that happens? You try and you try to be transparent, and then your financial results come out all unintelligible because it takes the better part of a year to switch accounting systems. No wonder Whitacre is downplaying talk of a Summer 2010 IPO.