GM Suppliers Balk At Being Held Accountable For Quality Parts

GM Suppliers Balk At Being Held Accountable For Quality Parts
Auto suppliers signing new contracts with General Motors Co. are seeing a curveball: a contract provision that makes suppliers liable for half of GM's warranty costs.

The provision could put suppliers collectively on the hook for more than $1 billion in annual warranty costs. GM expects to owe $3.1 billion for policy, product warranty and recall campaign liabilities in 2010 and another $3.2 billion in 2011, according to its most recent 10-K filed with the U.S. Securities and Exchange Commission.

GM announced the new policy in mid-April and began to roll out the program to suppliers in North America.



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dumpstydumpsty - 6/2/2010 11:08:58 AM
+4 Boost
Wow. This goes back to the Ford-Firestone tire blowout disagreement from the 90's. Though a Judge made a ruling or they agreed to disagree and just settled...nobody really knows who was at fault. Was it a heavy vehicle that was then overloaded with additional weight? Or were the tires unable to support the maximum load they had been designed to carry? Did an ill-advised (unwise) driver maneuver cause a shift in the vehicle's weight effectively overloading 1 or 2 tires causing an immediate blowout?

Since suppliers provide parts that the automaker either specifically designed or parts that the supplier designed, that should determine fault. But when parts are not use as they were designed to be used, it shouldn't be the supplier's responsibility.


Agent009Agent009 - 6/2/2010 11:56:05 AM
0 Boost
But also in the case of the CTS gas pedals, were they defective by design, or poor quality control on the assembly line or both?




Joe_LimonJoe_Limon - 6/2/2010 12:02:57 PM
+2 Boost
In the case of the CTS gas pedal, if the design was good, and the problem occurs, it lies on Toyota quality control to only accept conformance parts. If the design was bad, it lies on the Toyota design team.


Agent009Agent009 - 6/2/2010 12:30:22 PM
-1 Boost
I agree if it was always that clear cut. But then again we get in a pissing match of did poor design, material choice, or out of spec assembly causing the issue.

It gets messy real quick, especially in a "sue me sue you" environment


pennfootballpennfootball - 6/2/2010 12:11:56 PM
+4 Boost
It's about time someone held these suppliers responsible for their quality because they also co engineer the parts with the OEM's and they also try to cut corners and make them as cheap as possible....good for you GM! Let these be a lesson to these little companies/fiefdoms that have been ripping off car companies for years with crappier and crappier parts to improve their own bottom line!


dumpstydumpsty - 6/2/2010 4:33:09 PM
+2 Boost
I do agree with GM for wanting to share product and materials responsibility in the issue of warranties. I think just the act of signing the business agreement will force many suppler/mfg shops to review their specs and try to shore up any wide ranges of product variances. I think the new agreements will work out well for each side. GM will receive better quality parts and GM will be expected design better quality components.In the end, the consumer gets better quality vehicles.


uaw_laxuaw_lax - 6/2/2010 12:46:40 PM
+1 Boost
Good move I think we will see all other brands follow suite.


stonestone - 6/2/2010 1:23:55 PM
+2 Boost
So suppliers want the revenue but not the liability, no big surprise there. They will cave, there's always another supplier waiting in the wings to move up the food chain. I think sharing in the liability will make the eventual product that much better if suppliers have something to lose quality should go up.

It should be a simple matter for an independent body to determine if a failure is due to a design flaw (suppliers fault) or implementation flaw (manufacturers fault) and therefore who might be liable in any given case. I think this is a good thing for the consumer but as always, there will be a ton of finger pointing before anything is settled **cough** BP & TransOcean **cough**


Agent009Agent009 - 6/2/2010 2:21:11 PM
0 Boost
By having a stake in the quality you are going to make sure whatever has your name on it is the best.


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