Thursday 17th Aug 2017 - Logistics & Supply Chain

GM looks for supply chain savings in Europe

General Motors Europe expects to see supply chain savings from its alliance with PSA next year, the group said, as it revealed that it expects to lose between $1.5bn and $1.8bn in 2012.

The two organisations are in the process of finalising a joint purchasing effort that will leverage their combined scale.
GM had previously announced it would assign the majority of GM Europe’s logistics needs to PSA’s Gefco subsidiary. GM expects to start seeing measurable savings in 2013.

In a move to focus on fixed costs and cash preservation, GM Europe has reduced company and dealer-owned inventory by 100,000 units since February. It expects to see a further reduction of 20,000 by the end of the year.

GME’s fixed costs are expected to be down approximately $300m in 2012. An additional $500 million is targeted from 2013 through 2015.

Steve Girsky, GM vice chairman, said the group expected to break even in Europe by the middle of the decade. It plans to deliver 23 new models and 13 new engines by 2016.

Like its rival, Ford, GM  has been rationalising production capacity in Europe. It said that in 2015, GM would launch its next-generation Opel Astra in two plants with each operating three production shifts, compared with the three under-used plants that build the car today. Additionally, there is no allocation of future product to the Bochum site planned after run-out of the current Opel Zafira – subject to consultation.

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