GM parts supplier declares ch 11 . . .
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Lexus Champion
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GM parts supplier declares ch 11 . . .
They're saying if they stop making parts, it will cause ALL GM factories to grind to a halt. Kind of crazy that they make parts that go in ALL GM vehicles.
http://www.thetruthaboutcars.com/201...goes-bankrupt/
http://www.thetruthaboutcars.com/201...goes-bankrupt/
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Clark-Cutler-McDermott Co. stopped making acoustic insulation and trim pieces for GM vehicles on Friday after declaring Chapter 11 bankruptcy, a situation it blames on money-losing contracts signed with the automaker, a source told The Detroit News.
Lexus Champion
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So let me see--GM squeezed them on their contracts so that they weren't making any money, while GMs accounting dept was probably high-fiving all around for the money they saved the company. Nice play, GM--maybe you really will put them out of business, rather than get a restructured contract at a price that would have been fair to begin with.
Agreed. This is not the way to treat suppliers and not the way to do business.
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So far, courts have sided with GM on temporary restraining orders on the contractor, keeping the parts and supplies coming. But, of course, those orders are only temporary, and, sooner or later, the bankruptcy courts will take over.
Lexus Champion
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If an automaker wants something from a supplier, like lower-cost parts, Dr. Deming said that the buyer should work together with the supplier to figure out how to do that, to the benefit of both supplier and buyer. An automaker should not dictate "Lower your costs or else!" because the supplier may then be forced to sell at money-losing prices, the supplier eventually goes bankrupt and the automaker must stop assembly lines while they are forced to wait for the supplier. In the end, it is bad for the supplier and bad for the automaker.
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Instructor
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It will be interesting to see what the bankruptcy court will approve. Under bankruptcy law a company can reject contracts and leases outright, or have them restructured to current market terms.
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The Japanese automakers treat their suppliers differently than the American automakers. The Japanese learned from the American Dr. W. Edwards Deming, now revered as a quality guru, that you should work cooperatively with suppliers rather than dictating to them; the Americans refused to learn from their own. In study after study, suppliers consistently say that they prefer to work with the Japanese automakers rather than the American ones because the Japanese treat them with more respect.
If an automaker wants something from a supplier, like lower-cost parts, Dr. Deming said that the buyer should work together with the supplier to figure out how to do that, to the benefit of both supplier and buyer. An automaker should not dictate "Lower your costs or else!" because the supplier may then be forced to sell at money-losing prices, the supplier eventually goes bankrupt and the automaker must stop assembly lines while they are forced to wait for the supplier. In the end, it is bad for the supplier and bad for the automaker.
If an automaker wants something from a supplier, like lower-cost parts, Dr. Deming said that the buyer should work together with the supplier to figure out how to do that, to the benefit of both supplier and buyer. An automaker should not dictate "Lower your costs or else!" because the supplier may then be forced to sell at money-losing prices, the supplier eventually goes bankrupt and the automaker must stop assembly lines while they are forced to wait for the supplier. In the end, it is bad for the supplier and bad for the automaker.
in a normal system a manufacturer creates a product and sets the price for their product. Wal-Mart and Home Depot are two of the worst as they dictate what they will pay and if you want your product on their shelves you will sell it to them at their asking price, on top of that they will automatically discount their invoice to manufacturers if the manufacturer doesn't send the EDI billing within expected time frames, or if there are errors on the billing. Additionally while typically they are on NET terms with manufacturers they will not pay on time, and will always carry a balance in the rears, it is not uncommon for them to pay a NET30 term at 90-120 days out and then discount it 10%-15% because they feel your billing was inaccurate.
Last edited by mjeds; Jul 15, 2016 at 02:31 PM.
The Japanese automakers treat their suppliers differently than the American automakers. The Japanese learned from the American Dr. W. Edwards Deming, now revered as a quality guru, that you should work cooperatively with suppliers rather than dictating to them; the Americans refused to learn from their own. In study after study, suppliers consistently say that they prefer to work with the Japanese automakers rather than the American ones because the Japanese treat them with more respect.
Instructor
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it's not just Automakers. it's most American companies. Home Depot, Lowes, Wal-mart, etc all dictate the price they will pay for a product.
in a normal system a manufacturer creates a product and sets the price for their product. Wal-Mart and Home Depot are two of the worst as they dictate what they will pay and if you want your product on their shelves you will sell it to them at their asking price, on top of that they will automatically discount their invoice to manufacturers if the manufacturer doesn't send the EDI billing within expected time frames, or if there are errors on the billing. Additionally while typically they are on NET terms with manufacturers they will not pay on time, and will always carry a balance in the rears, it is not uncommon for them to paid a NET30 term at 90-120 days out and then discount it 10%-15% because they feel your billing was inaccurate.
in a normal system a manufacturer creates a product and sets the price for their product. Wal-Mart and Home Depot are two of the worst as they dictate what they will pay and if you want your product on their shelves you will sell it to them at their asking price, on top of that they will automatically discount their invoice to manufacturers if the manufacturer doesn't send the EDI billing within expected time frames, or if there are errors on the billing. Additionally while typically they are on NET terms with manufacturers they will not pay on time, and will always carry a balance in the rears, it is not uncommon for them to paid a NET30 term at 90-120 days out and then discount it 10%-15% because they feel your billing was inaccurate.
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More than likely GM will reserve the right to take over the equipment and run the plant on their own. I cannot see GM shutting down any plants.