How about a “screw you very much”?

Hey! If your an auto supplier for General Motors, just shut down your US operations, find a few barges, and float your factories in the Pacific. With that cheap island labor, fresh Pacific air, and cleansing salty sprayyou’ll be raking in the greenbacks!

GM puts squeeze on suppliers
Automaker wants parts makers to open plants in low-cost countries, a move sure to spark fury.

By Brett Clanton / The Detroit News

DETROIT — General Motors Corp. is launching a three-year cost-cutting plan that will stress the need for U.S. parts suppliers to open more factories in low-cost countries and to become more competitive on costs and price.

The new plan, designed to save GM billions of dollars over time, could increase already simmering tensions between the struggling automaker and its supplier network.

Bo Andersson, GM’s purchasing chief, is expected to roll out the plan to 250 top suppliers at a Sept. 22 meeting at the automaker’s proving grounds in Milford.

GM is wrapping up a separate three-year program aimed at reducing by 20 percent its $85 billion global purchasing bill as rancor among suppliers over the automaker’s cost-cutting demands is reaching a fever pitch.

In an interview with Automotive News last month, Andersson said suppliers have shouted at him and even grabbed his tie to vent their frustrations. “I see much more emotion in our supply base and nonprofessional businessmanship in the last two years than I’ve seen in my whole career,” he said.

While it’s nothing new for a Detroit automaker to push suppliers to reduce costs, GM is under particular pressure to find additional savings after losing $2.5 billion in North America this year. GM also is pressing the United Auto Workers to consider higher out-of-pocket health care costs.

The new cost-cutting plan for suppliers is likely to widen the rift between GM and its U.S. auto parts makers, who in a recent survey said their trust in GM had fallen to a 15-year low. Parts makers are struggling to eke out profits because of high raw material costs, weakening sales by Detroit automakers and global pricing pressures. Several large players have been forced into bankruptcy.

In such an environment, GM needs to be careful how hard it pushes, said Jim Gillette, an industry analyst with CSM Worldwide in Grand Rapids.

“There are a lot of fragile suppliers out there,” Gillette said.

A little birdy once told me that we shouldn’t worry too much about our automotive industry. Cause ol’ America is the LAND OF INNOVATION and will always find new industries. I mean, like, we’re just busting at the seems in new industries that will employ many Americans. Right? We should just shrug off old industry (job security, long-term employment, good benefits, etc) and get with the new industry (”everyone’s a consultant”, contract employment, benefits on the blink).

Sounds like a rockin’ good time my fellow Americans. I promise to play you some soul-stirring tunes on my battery-powered keyboard while we’re waiting in that ol’ soup line.

OK… OK… Sounds defeatist, right? Let’s spin it this way: the Japanese auto makers are just trying to make sure that a sizable number of American auto workers turn to healthy soups and stews in their diets. Yeah, that’s the ticket!

Seriously, can we just afford to concede automobile making supremacy to the Germans, Japanese, Koreans, and possibly Chinese? Car making is the essence of American industry. Look at the rich traditions and brands. The stories. The legends. The lore. And it has all come down to the dollars. I say we lower the standard of living across the board so we can compete at home with the overseas auto makers. Uh oh! I said a dirty thing. Lowering the standard of living? By government means? I’m a socialist! Bad, bad T-Steel. But is the future of America purely service driven? Are we going to abandon manufacturing totally? I don’t know about you, but a service driven economy only scares me.

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