GM Sources More Globally, While "Trickle Down Despair" Strikes Ford

If GM was not hamstrung by labor contracts and its past North American management idiocies -- and how they limit the auto giant's ability to source globally -- I'd reckon that the Detroit giant would have a fighting chance to once again take on a leadership role in the industry. Now, don't get me wrong -- GM still has huge issues to overcome given its inability to build sustainable, satisfactory supplier relationships, at least in the US. But reading Tim Minahan's write-up, you can’t help but be impressed by how GM has enhanced its global procurement and supply chain operations. Tim writes that on a global basis, "GM now buys 32% of its parts from low-cost countries, such as Mexico, Brazil, Russia, South Korea, China, and Thailand. That’s up 20% from 2002. That may sound impressive, but in North America, labor rules have GM buying 95% of its parts from North American suppliers, with only about 16% of that coming from Mexico." Talk about being hamstrung!

If you take a spin through Detroit, sinking into the city's thousands of potholes -- they appear to add one for each round of layoffs, it seems -- you'll eventually arrive at the headquarters of GM's rival, Ford, when you reach Dearborn. And given the tenor at the place, if I were you, I’d head straight for the bar, just as Business Week did. At least when you're drinking, "Trickle Down Despair" becomes easier to take. According to the story, "One engineer who has worked for Ford for more than 20 years says it's common to find negative news stories circulated by e-mail, like a recent one headlined "Run, Forrest, Run" (referring to Forrest Gump), as a warning to quit or take a buyout offer before a mass layoff. If you wait for a buyout, the logic goes, you might end up among a bigger wave of workers, trying to sell a house in the already glutted real estate market of Michigan, a state with more than 6.3% unemployment." Given how Ford came in at the bottom of the barrel in buyer satisfaction in this pole -- well behind GM and Toyota -- I'd probably pack my bags and take any package I could. Oh yeah, and I'd probably ask Dr. Z if there's a way he could more quickly put me out of my misery.

Jason Busch

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