Earlier this year, General Motors rolled back changes it made to its purchasing contracts that included terms that may have left suppliers exposed on warranty liability. The changes would have allowed the automaker to recoup safety recall costs from suppliers past the consumer product warranty, and required uninterrupted supplies during "any foreseeable or anticipated event."
Dave Andrea is the senior vice president of industry analysis and economics at the Original Equipment Suppliers Association. Aftermarket Business World interviewed him about GM’s decision.
What can we learn from GM's decision to alter its supplier terms after the backlash?
GM's move to change its terms and conditions only six months after their release shows GM listened to its supply base. It also shows how competitive it is with the vehicle manufacturers and the major automotive suppliers to get their supplier relationships correct and be the customer of choice.
What do you think is the biggest challenge suppliers face in the coming year?
North American suppliers face a duel challenge in 2014: Supporting the launch of a record number of new vehicles while producing the necessary components for an incremental 500,000 units of light-duty production. There is no room for error as people, plant and equipment are running nearly full-out in capacity utilization.
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