Auto Service World
News   April 6, 2006   by Auto Service World

Is GM pushing offshore outsourcing?


According to reports in a Detroit newspaper, some of U.S. auto giant General Motors Company’s parts suppliers, are being sent a very clear, if not explicit message: outsource to cheap labour nations, or lose the business altogether.
After an internal investigation by GM, it was learned that a single employee sent out the policy in question and had suggested that suppliers find parts form a list of countries such as China and Namibia.
GM global purchasing chief Bo Andersson immediately released a statement to all employees suggesting that the automaker should not “direct suppliers where to source” parts. In his comments he wrote: “GM’s suppliers must determine how to compete in this hyper-competitive market.”
However, after GM lost some 10 billion dollars last year, some auto parts manufactures say the message is still clear; outsource or else.
Despite the controversy over the issue, GM maintains that it purchases 99 per cent of its parts from North American sources. However, that stated number includes parts that are only assembled on this continent, even if the vast majority of their components are imported from low-cost countries.


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