Photo: General Motors
General Motors is attempting to acquire the equipment, tooling, and completed inventory from one of its suppliers.
We are writing about Clark-Cutler-McDermott Co. (CCM), a supplier for General Motors for the past 45 years, and a 105-year-old company. General Motors is their largest customer, accounting for over 80% of the company's revenue, but an unfortunate chain of unfortunate financial decisions has led to CCM filing for Chapter 11 bankruptcy.
In the wake of this situation, General Motors risks being left without an essential supplier, the only one it used to for dash insulators, wheelhouse liners, fender insulators, floor insulators, and pillar insulation.
The parts described above are just some of what General Motors bought from CCM for its North American factories, and the corporation has no other partner for the parts made by this company.
General Motors risks shutting down its North American plants until it finds suppliers for these products, as the company works with a just-in-time supply sequence for the components made by CCM.
The just-in-time strategy involves avoiding stocking parts, preferring to receive delivery of elements when they are supposed to be used on the production line.
Since GM does not have any inventory for the parts manufactured by CCM, the company risks not being able to assemble any new cars until a new supplier provides it with the required elements.
The American automaker has already requested relief from the US Bankruptcy Court District of Massachusetts, where it asked to take immediate possession of equipment, tooling, and finished inventory of the Clark-Cutler-McDermott Company.
According to Automotive News, CCM notified General Motors this year that it defaulted on a loan, and it required emergency funds. General Motors then provided the company with secured loans, but negotiations later broke down, and the factories operated by CCM were shut down on June 17, 2016.
GM won a restraining order, and managed to force the supplier to resume its operations and production, funded directly by the automaker. Unfortunately, this was just a temporary solution, and GM needs a permanent remedy.
In the wake of this situation, General Motors risks being left without an essential supplier, the only one it used to for dash insulators, wheelhouse liners, fender insulators, floor insulators, and pillar insulation.
The parts described above are just some of what General Motors bought from CCM for its North American factories, and the corporation has no other partner for the parts made by this company.
General Motors risks shutting down its North American plants until it finds suppliers for these products, as the company works with a just-in-time supply sequence for the components made by CCM.
The just-in-time strategy involves avoiding stocking parts, preferring to receive delivery of elements when they are supposed to be used on the production line.
Since GM does not have any inventory for the parts manufactured by CCM, the company risks not being able to assemble any new cars until a new supplier provides it with the required elements.
The American automaker has already requested relief from the US Bankruptcy Court District of Massachusetts, where it asked to take immediate possession of equipment, tooling, and finished inventory of the Clark-Cutler-McDermott Company.
According to Automotive News, CCM notified General Motors this year that it defaulted on a loan, and it required emergency funds. General Motors then provided the company with secured loans, but negotiations later broke down, and the factories operated by CCM were shut down on June 17, 2016.
GM won a restraining order, and managed to force the supplier to resume its operations and production, funded directly by the automaker. Unfortunately, this was just a temporary solution, and GM needs a permanent remedy.
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