GM working with suppliers to boost SUV production
Warren — General Motors Co. has been working with key suppliers the past few months to speed parts manufacturing so the Detroit automaker can boost production of popular selling trucks and SUVs, a GM executive told reporters here.
Steve Kiefer, GM’s vice president for global purchasing and supply chain since 2014, told reporters Tuesday he personally called about 30 top suppliers — including asking CEOs for help — about two months ago to seek solutions with them to increase production in a hot sales environment.
“Frankly, we did not expect the demand to be as high as what we see right now in full-size SUVs,” he said. “So we have actively worked with every one of our suppliers to make sure that we meet this higher demand.”
SUVs and truck sales are soaring given low gasoline prices. Cadillac Escalade sales, for example, are up 117.1 percent through the first three months this year compared to the first quarter in 2014 and Chevy Suburban sales are up 76.6 percent. The Escalade, Suburban, Chevrolet Tahoe, GMC Yukon and Yukon XL SUVs are built at GM’s Arlington Assembly Plant in Texas, where GM is considering a more than $1.2 billion expansion.
Kiefer said solutions reached with suppliers have included overtime, assisting suppliers’ with capital investment and premium shipments. GM also has declared a “critical event status” that allows GM to relax some overtime rules to temporarily run production for six to seven days a week at its Wentzville Assembly Plant to help build production of the midsize Chevrolet Colorado and GMC Canyon.
“We’re finding some very creative solutions,” he said. GM did not identify any of the suppliers it is working with, but Kiefer says some have been able to help immediately.
In January, Cadillac President Johan de Nysschen said GM would work to boost production of the Escalade this year by about 2,000 vehicles. But that won’t be at the expense of other vehicles built at the plant, Mark Reuss, GM’s head of global product development, purchasing and supply chain, said in January.
GM is working to improve supplier relationships as it expects to award hundreds of billions of dollars in new contracts with suppliers over the next 18-24 months as the company refreshes its vehicles, engines and transmissions, Kiefer said. The company currently works with more than 20,000 global suppliers and annually buys about $90 billion a year in materials.
The Detroit automaker finished last a year ago in the 2014 North American Automotive-Tier 1 Supplier Working Relations Index study conducted by Planning Perspectives Inc. in Birmingham. The new study, which ranks the six largest carmakers, is due within a month or so. Kiefer said he expects GM to fare better.