General Motors this year likely will dump as many as 160 suppliers world-wide that it considers poor performers, the motor industry newspaper Automotive News reported, adding that the move is part of the vehicle maker’s strategy to reward top suppliers with business.
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Industry consultant Craig Fitzgerald told the paper the programme is several years old, but GM is showing “a new exuberance in executing the strategy”.
Automotive News said the crackdown comes at a key time because, in the next year or so, GM is introducing 15 redesigned or re-engineered models and purchasing chief Bo Andersson has made it clear to suppliers that he expects “zero disruptions at launch,” according to a GM letter dated June 19.
The paper said that GM groups its suppliers into three colour-coded categories.
Automotive News said that the estimated 160 vendors represent 30% of GM’s red, or most poorly performing, suppliers, according to company documents the paper obtained. About 555 companies fall into GM’s red category, suppliers briefed by the car maker told the newspaper.
“GM’s goal is to grow the best-performing suppliers and provide assistance to support suppliers that want help,” GM spokeswoman Renee Rashid-Merem told Automotive News.
The paper said some of the 160 red suppliers that GM has targeted this year could improve to the [mid-range] yellow or [top performing] green category.
“GM (says), ‘We will fix you, or we will dump you,’ ” the CEO of a supplier that ranks in the red category told Automotive News.
Industry insiders told the paper that 15% of GM’s supply base fall into the green category.
