Positive Post of the Day: I Wish I Were a Big GM Supplier Edition
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]]
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During my employment at an automation supplier GM stood for "Generous Motors". Typical tactics from GM purchasing included such gems as a fax saying "as part of our cost saving measures we are now going to pay you 90% of the value of your contract". You can bet the "new" GM will determine the cost savings and cram it down their suppliers' throats. My employer stopped quoting to GM in 2003 and went bust the year after. Lucky for me since I was well clear of the industry by the time it all came crashing down, but I got me a double dose of hate for GM, the product is inferior AND they're arrogant jerks to deal with.
As if. GM regularly pistol-whips its suppliers just for entertainment as many a former supplier will tell you. Nonetheless, there never seems to be short line at the door to sell them goods and services.
Let me add a few things: 1. With so many companies willing to do business with them, GM has gotten the idea in their head they are a desirable company to do business with and therefore they are being too generous with the suppliers. Time to exert pressure on these overpaid, unwashed companies. 2. The companies lining up at the door usually do not know their true, extended costs. What they have calculated is commonly one-third short 3. These people do not suspect what GM has written into the details. What they do read, they believe it means something other than what it actually reads. 4. Companies risk the company buying the tooling to fulfill the contract. The final piece is just being put in place when GM starts showing them contracts from other companies that are willing to supply the parts for 20-30 percent less. The hell with the contract, either drop the price or the contract is cancelled. Anyone who wants to be a supplier to General Motors has never been a supplier to General Motors.
CarPerson +1