Shipping cost may cut into overseas outsourcing at GM

Automakers have long tried to reduce the cost of parts by sourcing more items from suppliers in low cost countries. Until now, the cheap labor overseas was enough of a savings to cover the cost of shipping parts back to North America. But, the increased cost of fuel means that it suddenly costs a lot more to send components from places like China, India and elsewhere to the U.S. GM VP of Purchasing Bo Andersson has said the company will look on a case by case basis at sourcing suppliers closer to its assembly plants to help reduce transportation costs. Smaller parts like radios that don't cost much on a per piece basis may still come from overseas, but larger, heavier items like wheels probably won't. Fuel costs aren't the only deterrent to importing parts. The plummeting value of the U.S. dollar also makes domestic suppliers relatively cheaper now.
[Source: Reuters]

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