General Motors set to cut purchasing bill by £2bn

13 August 2006

14 August 2006 | Rebecca Ellinor

General Motors is on track to save $2 billion in global purchasing costs this year, according to Reuters.

Bo Andersson, GM head of purchasing, said in an interview that the company was "still inside those brackets" and working hard to offset the rise in raw material prices. He said GM hopes to reduce its annual $86 billion global parts purchasing bill by $2 billion every year indefinitely.

As reported on supplymanagement.com (Web news, 28 June 2006), reducing spend on materials - GM's largest cost item - is a critical part of the plans. It hopes to do this in part by sourcing more parts from low-cost countries and reverse the trend of buying almost all parts for the North American market in North America.

In January, SM reported that GM was understood to be restructuring its senior purchasing team and replacing top commodity buyers (News, 19 January 2006). At that time, GM spokesman Tom Wickham said the company did not comment on personnel issues but confirmed a three-year savings target set for the purchasing operation had not been met.



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