General Motors Company (GM) has entered a $4.5bn irrevocable payment undertaking programme designed to shield its parts supply chain from disruptions including severe weather and cyberattacks.

The arrangement was formalised through a master agreement between GM and its subsidiary General Motors LLC, which will act as coordinator.

Procura Auto Parts, a firm specialising in inventory management and component sourcing, will serve as paying agent under the deal.

Under the structure, Procura will forward funds to GM’s suppliers, who will use the money to purchase and store inventory on the automaker's behalf until it is required for production.

In return, GM will issue irrevocable payment undertakings (IPUs) to Procura.

An IPU is a written, unconditional promise by a buyer to pay a specific monetary obligation or approved invoice to a finance provider or supplier.

Procura, in turn, will draw its funding from a bank syndicate that includes JPMorgan Chase Bank and Banco Santander, with GM's IPUs serving as backing.

GM will settle payments on the IPUs once the corresponding inventory has been used, with a final deadline of 6 August 2029.

The facility caps outstanding IPUs at $4.5bn at any given time.

Issuance will be permitted during a 12-month window starting 7 August 2026.

GM intends to treat the programme as a product financing arrangement in its accounts.

Supplier prepayments will be booked as a company asset, and each IPU recorded as unsecured debt.

Payments made by Procura on carmaker’s behalf will show up as an operating cash outflow in the company's consolidated cash flow statements, offset by a matching financing cash inflow – mirroring the treatment as if GM had paid suppliers directly.

These amounts will stay outside GM's adjusted automotive free cash flow figure until the company itself purchases the inventory.

Separately, GM and China's SAIC Motor this month agreed a 20-year extension to their joint venture in China, extending the partnership through to 2047.