New GM emerges from bankruptcy, will suppliers notice a difference?

“Business as usual is over at GM,” Henderson declared—a statement that I’d guess many of its suppliers hope is true. In the release, Henderson stressed the new GM would be characterized by “listening to customers, responding to consumer and market trends, and empowering the people closest to the customer to make the decisions.” One word conspicuously absent from the entire document was “suppliers”—a group that presumably would be integral to achieving the lofty goals laid out.

Going forward, Henderson that GM would be built around four brands—Chevrolet, GMC, Buick, and Cadillac—with just 34 U.S. nameplates by 2010. By the end of next year, the company will operate 34 assembly, powertrain, and stamping plants, down from 47 in 2008—a right sizing that the company believes will push it to 100% capacity utilization in 2011. Overall U.S. employment will be cut from 91,000 at the end of 2008 to around 64,000 at the end of this year.

A press statement might not be the appropriate venue for GM to lay the groundwork for a more collaborative relationship with its suppliers, and clearly the intent here was to instill confidence in the company among its new majority share holders (U.S. Department of the Treasury: 60.8%; UAW Retiree Medical Benefits Trust: 17.5%; Canada and Ontario governments: 11.7%), but hopefully GM understands how important its supplier partners will be in any turnaround.

A broadly accepted economic tenet in the ‘50s and ‘60s held that “As GM goes, so goes the country”, and while that may no longer be true, one could still truthfully say “as GM goes, so goes a large portion of the plastics industry.” Given that, here’s hoping an era of GM listening to its customers, also means an era of the company listening to its suppliers. — [email protected]