General Motors is aiming to save $US800 million to $US1.2 billion this year with a new program in which the world’s largest automaker shares the savings from cost-cutting measures with its suppliers, Bloomberg News reported today.
Bloomberg said that the Detroit-based company told suppliers in a letter sent last month it would give them 35 percent of savings from any ideas they suggested.
GM and other automakers are under pressure to cut costs and boost profit margins as sales of cars and trucks slow from their record pace last year. The company said last month it expected fourth-quarter profit from operations fall by about half compared with the year-earlier quarter.
“It’s really looking at the bottom line for the suppliers and for GM,” spokesman David Barnas told Bloomberg.
Barnas said General Motors’ chief of worldwide purchasing, Harold Kutner, intends to evaluate 100 cost-cutting ideas each month.