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Supply chain risk a threat to rebirth of General Motors

24 Aug 2010

Source: Smart Planet

In an attempt to distance itself from its bankruptcy last year and shake for good its “Government Motors” nickname, beleaguered automaker General Motors has filed plans for an initial public offering with the U.S. Securities and Exchange Commission.

The company has slashed its brand offerings, now down to Chevrolet, Buick, GMC and Cadillac, dropping Pontiac, Hummer, Saturn and Saab, and turned over top management, replacing them with less seasoned executives.
According to analysts, one of the select risks for the new GM is supply chain efficiency. As the second largest automotive manufacturer in the US, GM needs to ensure that its size doesn’t get in the way of good business. A number of big auto suppliers have experienced financial difficulty or insolvency post-economic downturn, and GM needs to navigate this minefield.

A spokesman for GM has stated “suppliers have attempted to increase their prices, pass through increased costs, alter payment terms, or seek other relief…some have been forced to reduce their output, shut down their operations, or file for bankruptcy protection. Such actions would likely increase our costs, create challenges to meeting our quality objectives, and in some cases make it difficult for us to continue production of certain vehicles”.

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