Majority of parts suppliers prefer not to work with GM

Milwaukee Journal Sentinel -AP ^ | May 30, 2005 | DEE-ANN DURBIN

[Hank Rearden]

Unions must, and will, die. And that will be a happy time.

[linkinpunk]

But salespeople might also have other reasons for being mad at GM. (loss of commissions, etc.)

[oldbrowser]

Fifty-three percent of suppliers said they prefer not to work with the world's largest automaker, saying the company has little regard for suppliers' financial stability.

If anyone has been abused it is the GM independent dealers who have to sell their product to the public.

After being squeezed out of any profit on the sale of the vehicle the dealers would come up with other profit centers such as after market accessories or service agreements or financing and GM would promptly usurp by making it standard or offering a similar product at a lower price.

They then insist that the dealer maintain a high customer satisfaction percentage even though most of the customers dissatisfaction is with the product.

GM also saturated markets with dealerships on every corner thus splitting up markets to the point that dealers cannot provided the advertising or customer service that is necessary to compete with imports.

There is much more, but you get the picture.

[DancesWithTrout]

Seen it happen here first hand. Unfortunately, as the unions die, so do the manufacturing towns they support. This was a Delco, Guide Lamp, GM Powertrain headquarter town for decades. Now, there is only a satellite warehousing facility for Delco Remy and hundreds of thousands of square feet of empty manufacturing facilities. The new rust belt.

[Last Dakotan]

The blunt instrument GM, the other Automakers, and those who have adopted their purchasing strategies has been the China factor.

I walked out of a meeting with a company that makes big red tractors in Racine and elsewhere that threatened to take the business we were doing with them offshore if we couldn't guarantee a 5% per year price reduction. Though the thought in the back of your mind is how you are going to make your mortgage payments, we resolved to never do business with them in the future.

We are now more profitable with better customers and I hear they are fighting line outages and quality problems.

[Enterprise]

Reminds me of a story about a farmer from the Central Valley in California. He had shipped some produce to New York City. He expected a certain price because the produce was good quality. He was told he was getting a lower price. He called and asked why, and someone mumbled something about quality not being good. He got on a plane, flew to New York City, and went to the facility where his produce was sitting. He took a picture of the truck, which showed that the shipping seal had not been broken, proving that as at that time, the produce had not even been inspected. THAT stirred up a hornets nest - for a while anyway.

As for the man who was cheated because of "shortage" I don't know what he could have done other than to have put out more money by hiring private detectives to somehow monitor the shipment.

[DancesWithTrout]

Funny you should mention that big red tractor manufacturer. We walked on them as well when they wanted us to make wiring harnesses for less than material cost to keep the business from going to China. A new contract and a simple line re-tooling and we were up and running with a new customer and making better profits as well.

[jec41]

This is funny. The goose that laid the golden eggs is dying and everyone wants to pluck the last feather. Yea, we supplied great parts but the car turned out bad. Most of these supply companies would not exist except for the former big Three. If GM goes under many will cease to exist. GM products are not my preference but I hope they can hold on.

[Adiemus]

Gee, and I thought Wal Mart was the poster child of "evil" companies in the USA... /sarc

[Hank Rearden]

Sounds like a ready-made opportunity for creative people without the union-goon attitude.

[Oberon]

it's the miserable products they offer!

There are a few bright spots in the morass. For example, any large or mid-size GM product that uses the 3800-series V6 is a keeper. These cars hold their value well, and top the charts at Consumer Report year after year.

My 2001 LeSabre is a great example. It seats six, has 200 horsepower, gets 30 mpg on the highway if I keep my foot out of it, and it cost me 6500 bucks. I let somebody else pay the depreciation. =]

[hiramknight]

My company supplies equipment to GM. As a service engineer, I can attest to that fact whole heartedly. They always ask for more than stipulated in the perchase order and expect modifications to our equipment, software etc., to facilitate changes in their requirements free of charge.

They also threaten to not do business with you unless you comply with their demands.

The socialistic atmosphere has caused them to cut corners the only place the union will let them...suppliers

Not a good company to deal with.

After seeing how they do business, in their plants, first hand. I won't buy GM again.

[Eric in the Ozarks]

Sounds like Cargill.

[TChris]

Yet, their finished products cost more every year.

The union payoffs have to come from somewhere. :-)

[hosepipe]

Poor old General Motors is what happens to a capitalist enterprise when a blood sucking union and socialist democrats as management run a money machine into the ground..

Multiplied many times in various other companys. Its kind of like what happened to the public school system except the blood sucking goes on and on and on and on.. i.e. taxes you see.. Gov't bailout is EXPECTED, not lamented..

[spetznaz]

Do you think they will get a government handout when (and they will) ask for it? I know Chrysler got assistance once upon a time (different times), and I know the airlines have been sucking deep from the tit, but will GM receive similar help? Thanks.

[Southack]

I don't know if GM will get Billion$$ in a taxpayer bailout, but I'm confident that they and the UAW will beg and plead for such handouts.

What *will* happen is that GM will declare bankruptcy in the next 3 years...that will move their unfunded pension liabilities off their books into the federal pension bailout fund...saving GM billions.

Various GM divisions such as Buick will be sold or shuttered. Bankruptcy or new federal legislation will probably be required to break the healthcare benefits for each of those divisions.

Keep in mind that GM is a mere $15 Billion company...that owes $300 Billion in corporate debt, $57 Billion in unfunded pension liabilities, and pays $5 Billion per *year* in healthcare benefits.

It would take a taxpayer bailout the size of our annual defense budget to prop up GM.

That shouldn't be allowed to happen for a mere $15 Billion (stock value) company.

GM's time has come and gone. RIP.

[HamiltonJay]

GM is notorious for NOT paying in any sort of timely fashion its vendors.... I can't blame any of them for not wanting to deal with them... Delivering 2 Million parts doesn't do you a lick of good if you get paid net 360.

[Realism]

The socialistic atmosphere has caused them to cut corners the only place the union will let them...suppliers

They do it to the suppliers because they can, they would do it to the employees also if the union didn't exist.

The socialistic atmosphere

Labor Unions provide strength in numbers, without them we would have a out cry for even more government labor laws or suffer the same working conditions as China, Inc.

[Last Dakotan]

Funny you should mention that big red tractor manufacturer.

We, and others, got to referring to their purchasing department as "The Professional Liars Guild". Among other stunts they would ask for quotes for 1000 pieces and PO 300 at the same price. Net 30 became whenever we damn well feel like paying.