In the world of automotive suppliers, the words "profit" and "General Motors" can seem almost mutually exclusive. The automaker is trying to change that by offering its "preferred" suppliers a chance to cash-in on the GMT900 program, with the top 20 suppliers making somewhere around 5-10% margin on the parts they sell for use on the new full-size trucks and SUVs.
That may not sound like much to those in other industries, but such margins are quite healthy in the automotive world - especially on such a large program. There are still plenty of potential pitfalls, of course. If volumes are less than expected, or if GM continues to operate in a state of constant financial duress, many of the program's suppliers could end up in serious trouble. The initial reception of the Tahoe has been extremely positive, though, and an equally-strong performance by other models as the line-up is fleshed out could brighten the mood in what has been an extremely gloomy industry in recent days.
[Source: Automotive News]