TTAC Got It Wrong: GM Suppliers Wait 90 Days Plus for Payment

Robert Farago
by Robert Farago

After our story on GM’s letter to its non-core suppliers changing payment terms to 60 days, I received a flurry of emails that asked, in effect, are you out of your fucking mind? For example, “I do not know of anyone in the Supplier, Engineering, Consultancy or Technical world who has EVER been paid by GM in anything less than 90 days.” And “a friend that owns a Tier Two company has to be a real pain in the ass to GM Purchasing to get paid anywhere near 90 days. They told him once on the phone ‘We pay everybody 180 days payable…that’s our policy, what makes you so special that you think you should be paid in less than 90 days?'” (Interestingly, when he stopped shipping Just-in-Time parts to GM, they overnighted him a check.) In general, we’ve learned that The General’s suppliers generally get paid in 60 to 90 days. And “Even 60 days is not so bad from an OEM.” TTAC apologizes for any misconception created by our earier report.

Robert Farago
Robert Farago

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4 of 9 comments
  • Psarhjinian Psarhjinian on Oct 11, 2008

    I remember when this story broke. I was really surprised to see that GM paid in 30. I went a poked about our AR system as to GM's payment terms. I saw a lot of >90 day balances and a few >120s. They're not alone: very few large customers pay in less than 60. What's galling is that they'll put you over a barrel for credits on fill rates, delivery lead times, freight and quick-order/quick-pay discounts, but won't friggin' pay in less than 60, 90 or 120 days. Oh, and just try levvying late-payment charges. You'll get a call from corporate purchasing threatening to leave a horse's head in your bed the day the invoice is transmitted. Of course, they still claim "Oh, we can't possibly process invoices that quickly".

  • Anoldbikeguy Anoldbikeguy on Oct 11, 2008

    Sorry guys - I am an account executive at a supplier - over the last three years, GM has gone from mid-range to our largest customer. The change in payment terms means almost nothing. I have seen their needs for high technology products like we supply surge as they work to make themselves a truly global OEM. The newest platforms that they have and are continuing to introduce are simply the most advanced in the entire industry. The ones who are complaining about the change in payment terms are just the old guard losing their position with GM.

  • Geotpf Geotpf on Oct 11, 2008

    Am I wrong to suspect that Toyota pays their bills on time, every time? That is, if you send a bill to Toyota, you are guaranteed have a check in your hand 29 days later. If anybody has any knowledge to the contrary, please share.

  • Anoldbikeguy Anoldbikeguy on Oct 12, 2008

    @ Geotpf : GM, Ford, Chrysler, Nissan, Toyota all pay their invoices based upon payment terms that THEY specify, AND on time. Changing payment terms does not mean that they are paying their invoices late. With smaller customers, we can dictate payment terms, typically Net 30, but the larger organizations have their own accounting methods which dictate how they proceed. BTW, many (including GM) do not need to be 'invoiced' - they pay based upon receipt of the product.