Contractors for General Motors Corp. spent much of the Christmas holiday moving more than 700 tool sets from about 15 suppliers that were struggling to meet the terms of their agreements, the auto maker's purchasing chief says.
“We don't do this because we like to do it,” Bo Andersson, group vice president-global purchasing and supply chain, tells journalists.
“We are also helping suppliers restructure within. They need our support, for instance, to move from two assembly plants to one in their operations. We are very happy to do that.”
Not all of the affected 15 suppliers were in bankruptcy or on the way there, Andersson says. “Some of them were owned by hedge funds that lost their interest.”
The most visible of the 15 was Cadence Innovation, which filed for bankruptcy in August. The company supplied instrument panels for GM's successful Lambda cross/utility vehicles, such as the Buick Enclave.
GM says it tried without success to help Cadence sell the business. In December, the auto maker sued when the supplier said it intended to liquidate assets. GM says it had to move the tools to another supplier to protect its interests.
Some 80% of the Cadence business remains based in Michigan at other supplier facilities, while the rest has moved to plants in Virginia, Georgia, Ohio and Ontario, Canada.
Andersson describes GM's supplier relationships, overall, as more constructive and stable than they were three or four years ago, due in part, ironically, to the enormous challenges facing the North American supply base.
“I think we have been able to establish a better level of trust because we are in a much tougher situation,” he says. “People see the difference.”
When queried whether suppliers will be asked to do more as part of the government-supervised restructuring of GM, Andersson says, “We do it every day, and we will continue to do it.”
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