General Motors Still Assessing Viability of Japanese Suppliers

Although General Motors Company has been re-sourcing parts affected by manufacturing and transportation in Japan, there are still concerns according to the company’s CFO Dan Ammann.

Speaking with industry analysts at a dinner on Thursday, Ammann reportedly said that a team of several hundred GM employees is currently working to identify at-risk suppliers and find alternative providers.

According to General Motors’ spokeswoman Reneé Rashid-Merem, a “small number” of GM employees is on the ground in Japan. She said the crisis team is made up of employees from management, manufacturing, supply chain and purchasing and that the assessments are being performed as part of their regular job duties.  “It’s a cross-functional team that is closely monitoring the situation and making changes as necessary,” she said.

Ammann also said supply shortages will likely result in reduced incentives and higher vehicle pricing industry-wide. Ford Motor Company and Toyota Motor Corporation have already said they will increase prices on some models.

Last week, General Motors’ vice chairman Steve Girsky declined to provide any specific details about how the company is helping Japanese suppliers affected by the March 11 earthquake and tsunami, and the crisis caused by failures at a number of nuclear reactors in the northern part of the country.

GM has reportedly concluded its assessment of Tier 1 suppliers in Japan and is now assessing its smaller suppliers in the region. Based on the preliminary assessment, the automaker said it had discovered “no major issues” with its Tier 1 suppliers.

GM has assigned parts to one of five categories. They include unaffected parts, parts from damaged facilities they expect to reopen soon, parts that are currently not being made but are already in large supply, parts that will have to be produced a different location run by the same supplier, and parts that will have to be re-sourced to new suppliers.

Thus far, GM has not been forced to cut back significantly on production because of parts shortages. In March, the automaker was forced to idle a compact pickup plant in Shreveport, Louisiana for one week due to a parts problem. The company neither denied nor confirmed that the problem was directly related to the crises in Japan.

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