Now we've heard it all: General Motors Corp. might help its rubber components suppliers by using its clout to cut deals on raw materials they need. That's a far cry from the company that brought you Ignacio Lopez, the purchasing czar who personally crushed the spirits if not the financial health of hundreds of suppliers to GM. To be fair, GM is trying to shake its reputation as a bully to its suppliers. If it helps the rubber parts makers get a price cut on raw materials, all the better.
We'll have to see it to believe it, though.
What's good for GM is good for the country, we've all been told: What's good for GM's suppliers might not be perceived as good for GM, if the prices of natural rubber, carbon black, etc., zoom upward. GM as the benevolent despot, ready to suffer financial pain for its suppliers? It doesn't ring true.
With various Asian countries in economic disarray, perhaps GM is looking to take advantage of the short-term situation. The auto maker has advised its suppliers to jump into Asia now while the currency is deflated and conditions are ripe for economic exploitation.
If that makes sense for its suppliers, maybe it's a good idea for GM to do the same with raw materials. The company claims this approach has worked for steel and, to some extent, plastic suppliers.
Members of the raw material supply chain, however, can't be too happy with the news the 2,000-pound gorilla may be visiting them. And for many rubber product makers, the unique nature of their compounds may make intervention by GM unworkable.
Finally, the auto companies generally require their suppliers to cut the price of their products throughout the life of their contracts. On occasion, these same customers demand outright discounts from suppliers to help their bottom line.
That attitude doesn't sound typical of traditional vendors to the rubber product industry.