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.
I’m still only three years into the car business and I still haven’t wrapped my brain around one thing: xenon headlamps. As a used car manager I’ve replaced plenty of xenon bulbs (pricey) and even some ballasts (really pricey).
Are you sold on their usefulness? To me it seems like a giant waste of money.
1,200 BMWs are sitting at German dealers and cannot be repaired. The reason: Missing parts. After a software change in BMW’s German parts distribution system, supply with needed parts has become sporadic and unpredictable, Automobilwoche [sub] says. BMW works council chief Manfred Schoch blames cost cuts by BMW’s management:
“There were other solutions, but they wanted to save money. Now it will be getting three times as expensive.”
BMW has started to provide customers with replacement cars. Even that cause problems. “If people want to go on vacation in a Touring, and they are given a sedan, they won’t be happy,” a dealer told Automobilwoche.
“Hey! What about me?”, screams the local electric company CEO. “We really need to double the monthly service charge for our local residents to manage our costs. But let’s also throw in a double digit rate reduction for those who use a lot of energy. Like the billionaire and his businesses. After all, they create the jobs out here!”
And the story drones on. The trash company that owns a multitude of companies that have virtually nothing to do with trash, wants to hike your bill. Because they need to hit their numbers. Just like everybody else. The insurance company. The gas company. The local government. The state government. Heck, every local monopolist and oligopoly is thrusting their well oiled lobbyist machines right at your shrinking wallet.
Guess who else is doing it now? The auto parts stores.
NOTE: I received the following email from Saab Automobile Parts North America. As I was not aware of the recent details behind Saab’s parts/service operation (my bad) I felt obligated to share this, unedited, with everyone. – SM
We read, with great interest, your latest Piston Slap post and the many comments in response to “The Last Saab = good Deal?” We wanted to take this opportunity to let you know about Saab Automobile Parts North America, the exclusive authorized provider of Saab Genuine Parts in North America. Venues like yours help us to get the message out that Saab Genuine Parts and Service are available. (Read More…)
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. (Read More…)