GM gives suppliers chance to profit from new truck line

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]


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