General Motors outsourcing big time from China
General Motors is the worldâ€™s largest automaker. However, the attack of the Japanese auto giants like Honda and Toyota have made their American operations quite complicated. Consumer is no longer looking for gas guzzling mini trucks. They are now favoring fuel-efficient Japanese automobiles. This is resulting in huge losses for the GM in their home market.
As a result, they are looking at ways to cut costs and one good way is to outsource the work to cheaper nations like China. The latest news reports in claims that the company is looking at outsourcing 80 Billion USD worth of auto components in China. Most of these imports are to support the development of a new model of pick-up truck to be launched soon in the North American market.
The China Business News who quoted unidentified sources saying that the automakerâ€™s North America unit will send a team of about 200 staff to China to supervise the production of its Chinese suppliers released the news. No timeframe for these outsourcing has been released. Until now, the Chinese suppliers only interacted with the localized branches of the company.
In fact, a research report by the McKinsey Quarterly claims that the company can cut huge costs by outsourcing their auto parts development from countries like India and China. Looks like General Motors is finally implementing those ways.