Contract law change limits buyers' freedom

16 October 2009

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8 October 2009

The former head of procurement at Chrysler has rubbished the efforts of General Motors (GM) to improve supplier relations.

Speaking after GM announced a number of supplier relationship management reforms, John Campi told SM the supply base has no trust in the company and GM "doesn't have the capability to change".

But GM hit back, arguing it is beginning to improve vendor perceptions and relationships. In the past month the company has unveiled plans to pay suppliers once a week in an effort to improve cash flow in its supply chain. In addition, GM will split cost savings evenly with vendors that submit successful ideas on cutting the costs of car parts.

Experts said the savings scheme could transform strained supplier relations in the US automotive industry (News, 10 September). But Campi, who left Chrysler in December after under a year, and is now a procurement consultant, argued: "The rhetoric sounds good, but what is really changing? Paying suppliers every week doesn't necessarily mean it will help them."

A GM spokesman said: "We know we have issues we need to overcome, but things like our cost-sharing scheme are real changes. We are committed to collaborating with suppliers, but accept it won't improve overnight."

 

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