GM to Outsource Windshields from Asia?

by Penny Stacey

Despite a report from Ward's Automotive that General Motors Corp. is considering outsourcing its windshield production from Asian manufacturers, Deborah Silverman, manager of GM global purchasing and supply chain communications, says the auto manufacturer is reviewing a number of factors surrounding this possibility.

"At GM, we purchase commodities on a best total landed cost basis," she said. "That means we look at the total cost of delivering a part to the manufacturing site, including logistics. When evaluating the cost of purchasing windshields from Asia, logistics becomes an important factor, but remains just one factor in evaluating the total landed cost."

Silverman could not comment on what suppliers the company might utilize, should it make the move to Asian suppliers.

"For competitive reasons, we don't disclose the specifics of which suppliers we are considering for future business," she said.

As for possible cost savings, she noted that this would be determined by a number of factors.

"[The question of cost savings] is difficult to answer given all of the dynamics that go into our sourcing decisions," Silverman said. "Regarding windshields, while Chinese manufacturers, for example, are about 10 percent below North American suppliers, the U.S. supply base in automotive glass is becoming more competitive."

Location also comes into play.

"Remember, we source for GM's manufacturing facilities around the world, so we are sourcing both for domestic operations in countries where we build cars and trucks as well as for export, when it makes sense," she said. "Our first priority is to source for domestic production. It's not as simple as sourcing from Asia for North American production."

While the outsourcing of windshields currently is only a consideration, Silverman added that the company also is looking at outsourcing a number of other products from Asia.

"Asia is a good source for a number of vehicle components, but specifically electronics and emblems/decals (sun visors, door handles, etc.)," Silverman said.

CLICK HERE to read the text of the story from Ward's Automotive (subscription only) .

CLICK HERE for an update on GM's profits for the second quarter of 2007.

Penny Stacey is the editor of glassBYTEs.com™/AGRR magazine.