By on February 14, 2020

gm

We’re not talking about a digital threat here; no, it’s more just one more headache caused by the viral outbreak rampaging through the Chinese manufacturing heartland — the source of so many components crucial to domestic auto production.

At General Motors, a supply chain disruption is the last thing the company needs after weathering an expensive 40-day strike at its U.S. plants last fall. The automaker is now attempting to allay fears of idled plants in the wake of an ominous social media post.

As reported by Bloomberg, GM says the threat isn’t serious, suggesting it has other suppliers on the hook that could step in if necessary.

“We continue to monitor our supply chain and are in close communications with our tier-one suppliers to mitigate any risk to production in North America,” GM spokesman David Barnas said in an email to the publication. “The situation is still quite fluid, but GM, other automakers and suppliers have begun the process of restarting vehicle and parts production in China.”

The comment came after a UAW local representing workers at GM’s Flint, Michigan truck plant posted to social media, warning of potential production snags at truck and SUV plants in Flint, Arlington, Texas, and Fort Wayne, Indiana if parts shortages continue. The situation would be especially worrisome if supply doesn’t ramp up by March, the post said.

The message to members of UAW Local 598 reportedly stemmed from a report from the automaker’s materials department.

“However, if this continues in March, there will be more significant parts impacted. The first being trailer harnesses. The company is still trying to develop a process to run shy and still pass PTT and DVT,” the post stated, as reported by The Detroit Bureau.

“The company has leased two cargo planes and also been able to get the government to release two of them. They are hoping to improve shipments. The company has set Flint has a priority plant and will sacrifice volume at Arlington and Fort Wayne to keep us running.”

The three plants crank out key product for GM: full-size Chevrolet Silverados and GMC Sierras, as well as the company’s body-on-frame, full-size SUVs. Those SUVs were just revealed in next-generation guise; production has already begun ahead of a mid-2020 on-sale date.

Earlier this week, GM announced that its joint-venture plants in China would restart on February 15th, following extended downtime caused first by the Lunar New Year holiday, then by the virus.

[Image: General Motors]

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24 Comments on “GM Downplays Virus Threat to Lucrative Truck Lines...”


  • avatar
    Hummer

    GM deserves to burn to the ground for the amount of Chinese components going into American built vehicles for Americans. The sheer idiocy of having suppliers half way around the globe when local suppliers exist should cause a shakeup in exec branch of this company. Also this is some sweet justice for screwing up the redesign of the oldest automotive name plate in the market.

    • 0 avatar
      vvk

      This! American car manufacturers are by far the worst offenders. You say we have no Chinese made cars on the US market? They are just disguised as GM, Ford and FCA. They may be assembled in NA but a lot of the components and components of components come from China.

    • 0 avatar
      Lorenzo

      It’s not just GM. All auto companies turned to the cheap labor market in China for auto parts. It was part of a very dangerous trend of putting its supply chain into one authoritarian country.

      The global economy’s supply chain was well on the way to being a choke point under Chinese control, until the US/China tariff war convinced manufacturers of many products to move their supply chain to multiple other asian countries.

      Now it’s auto parts having to move out of China, along with much of the electronics industry – watch for shortages of Apple products caused by production shutdowns as a result of the corona virus.

      The biggest wake up call of all is in the pharmaceutical industry. Much of America’s drug manufacturing was moved to China, a huge strategic error. The recall of some tainted drugs was the first sign, but the corona virus has awakened drug makers to the danger of having their sole source or majority source supply chain run through China.

      The US will probably extend its economic boom by returning much of the auto parts, electronics, and pharmaceutical industry manufacturing, while China flirts with the prospect of a “Mandate of Heaven” event.

      • 0 avatar
        DenverMike

        It’s an insult that GM does it. You go ahead but I’d feel like an idiot buying anything GM.

        Plus Chinesium steel parts will fail early. It’s a further insult using Chinesium brake components.

        • 0 avatar
          Hummer

          The only reason I bought another GM, my SS was because it had an extremely high 1st world content, as in over 90%. About the same time I got my work truck Silverado with high Chinese parts and Mexican built VIN – quite a few quality issues that made me shake my head.

          One of which being a windshield delaminating with 15k on the clock – I haven’t seen a windshield delaminate outside of 1970s Mopars.

          • 0 avatar
            DenverMike

            Their big trucks are their star players, so of course GM guts their quality. Never mind lack of innovation on the fuglyist trucks ever.

            If they get anything right it should be their trucks.

          • 0 avatar
            DenverMike

            If I gotta have a C8 Corvette, if they ever come stick shift, I’ll make sure to be the 2nd or 3rd owner, and or insurance auction.

    • 0 avatar
      geozinger

      You folks amaze me. You think that only the US mfrs use Chinese parts? Think again. You must also think that your Japanese car is built in an airtight factory with each one being blessed by a Shinto priest as it comes off the line…

      Also, think about your replacement parts. I have to replace the headlight bulbs on my American (sourced and built car) again because I cannot find inexpensive replacement bulbs that are made anywhere else BUT China.

      As others have noted making China the sole source for all things inexpensive is the mistake here. Fiat and Hyundai are shutting down or idling plants because of parts problems. This will get worse before it gets better. Hopefully the Vietnamese don’t get Coronavirus, too…

      • 0 avatar
        Deontologist

        It’s been documented that the tundra, for example, uses less Chinese parts than the “American” trucks. As well as more American labor.

        • 0 avatar
          Art Vandelay

          Yeah my 30 seconds of googling says the most “American” truck is the Ridgeline with the Tundra coming in behind the F150 which was behind the GM midsized twins.

      • 0 avatar
        dukeisduke

        I’ve owned several Toyotas, and now Kias, too. I’ve yet to see any parts in either that are made in China. Most of the parts in the Kias are made in South Korea, and with Toyota it’s Japan, Thailand, Malaysia, or the USA. I just replaced a taillight on my Tacoma on Friday, and the Toyota OEM part is US made.

      • 0 avatar
        Hummer

        Actually iirc my 4Runner is 100% Japanese content, so yes, blessed and all.

    • 0 avatar

      Literally. The number of “made in china” stickers on my 2010 Caddy was disgusting. It was also the lowest quality build I’ve ever owned…and I once had a Yugo. Brilliant engineering wont hide lowest common denominator parts, and the ensuing ownership experience will eliminate repeat sales.

  • avatar
    SSJeep

    Given that just about every plastic component in GM trucks (which includes the new Silverado interior) along with most of the electronics and anything with a screen comes from China, I suspect that this will be a larger disruption than we are being led to believe.

    • 0 avatar
      redapple

      ssjEEP
      I think you are bang on.

      Take note. The rush to Chinesium will INCREASE in the future after this panic eases. Did you miss my ex classmate Mary Barra’s piddle last month. “We must increase share price.’

      How do you do that? Cut cost ! More Chinesium (deadweight, 2017. multiple postings)

      • 0 avatar
        mcs

        @redapple: ex classmate Mary Barra’s

        Did you know her at GMI? I’ve lost contact with some of my friends that went there at the same time. I think I even met Mary once at a social event.

      • 0 avatar
        SSJeep

        I wholly agree redapple – but GM can only cut costs so much until buyers start to look elsewhere. This has already happened with the Siverado/Sierra combo and their loathsome, budget interiors – even on high-end trims. Sit in a RAM and its like going from a Chevy Uber into a RAM limousine.

        Chinesium also increases warranty payouts notably (provided GM actually honors their warranties), which hits share price just as bad as a decline in revenue.

        Mary doesnt really need to get the share price up, nor should she kowtow to short term shareholders who want to know what they are getting “today” for their buck. The path to success in the car business is simple – build good cars. People will be willing to pay more for the product and a long term sustainable share price increase will naturally follow. Apple proves this.

        Of course, short term traders dont think that way…

        • 0 avatar

          GM deals with the Chinesium parts by giving good warranty to Caddy and Buick. My FIL has had parts quit on his XTS, but every time a part fails, they warranty it. Shocks, touch screen,alternator, etc….fail because the parts are junk, but for the first buyer, warranty cures all ills. The resale values tell the story after the first owner.

  • avatar
    dont.fit.in.cars

    Wall Street vs Main Street. It’s not just about cars. 60-70% of everything in big box stores is manufactured in China. US Corporations design products then send CAD files to China where raw materials are imported, production then logistics employed to ship across the world. The next wave will be food processing in Mexico shipped North.

  • avatar
    gasser

    How long does corona virus live inside a container of auto parts bound for the U.S.????????????

    • 0 avatar
      redgolf

      I would say a lot less than on a cruise ship loaded with people both workers and passengers spreading the virus around in one continuous loop, cruising, docking, visiting ports of interest, sailing, unloading, docking, repeat!

  • avatar
    golden2husky

    The reality is that all manufacturers are going to source from the cheapest place unless there is some mechanism in place to prevent it from happening. There are no scared cows in the consumer product market because price drives everything. The consumer had plenty of time to buy the fryer made in West Bend Indiana instead of the cheaper Chinese made one that sat next to it on the shelf back in the day. Overwhelmingly they opted for the lower price model so today West Bend is economically dead. What is really sad is when the item you buy is packed with components from abroad and the assembled here, yet it still comes with an exorbitant price tag. Looking at you Harley-Davisdson…

  • avatar
    dusterdude

    @gasser I wouldn’t worry about corona virus coming from ocean containers …. The worry with COVID-19 is a significant spread in direct person to person transmission. As noted in the media some possible scenarios are pretty severe.. Hopefully they don’t play out as they would be much more devastating than worrying about manufacturing plants shutting down..

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