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The Way I See It!

I am an Ultra-Conservative, Alpha-Male, True Authentic Leader, Type "C" Personality, who is very active in my community; whether it is donating time, clothes or money for Project Concern or going to Common Council meetings and voicing my opinions. As a blogger, I intend to provide a different viewpoint "The way I see it!" on various world, national and local issues with a few helpful tips & tidbits sprinkled in.

Squeezing Suppliers With an Threat?

GM, Cars, Wal-Mart

No, not that evil Wal-Mart, General Motors (GM).

 

GM's Flawed Cars Born as Engineers Pushed Suppliers for Low 'China Cost'

 

At the time, around 2000, GM's profit margins were shrinking as worker- and retiree-benefit costs rose and its U.S. market share leadership was eroding. GM's grand plan to make money on small cars, by developing them jointly with Fiat SpA (F), was crashing.

 

As it became clear that GM's planned Chevrolet Cobalts and Saturn Ions wouldn't get made on a money-saving global design, Gary Altman, the models' chief engineer, told the group they needed to find other ways to reduce costs, including a suggestion to pull parts from existing models, said a person who was at the meeting in the automaker's suburban Detroit technical center.

 

Altman's message, while by no means a directive to build unsafe vehicles, reflected the environment at GM: The cars were the product of a culture of cutting costs and squeezing suppliers, as described by five people with knowledge of the automaker's engineering, management and suppliers in the decade preceding its 2009 bankruptcy.

 

‘China Cost'

 

GM also began pressing its supplier and former parts division, Delphi Automotive Plc (DLPH), to shave pennies off the price of every part to match what several of the people familiar with GM called the "China Cost" -- a rock-bottom price pegged to cheap Chinese labor.  If suppliers couldn't match it, these people said, GM would threaten to outsource production overseas.

 

http://finance.yahoo.com/news/gm-supplier-squeezing-days-gave-040114931.html

 

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