Not sure how many noticed, but GM recently let go Bo Andersson, its vice president of global purchasing and supply chain.
Not only is it pretty big news when a company of GM's size (it’s still a large company, isn’t it?) trades out its supply chain chief, but I had the chance to meet Bo briefly in 2008 at the i2 Users conference. I was moderating the event, and Bo was a keynote speaker.
He is an impressive guy, Scandinavian, I believe, and he came across as smart and tough, with a special emphasis on tough. In one of my favorite remarks I’ve heard any speaker say, he noted that if you didn’t hit your numbers as part of GM's supply chain, “The first thing that happens is that you get some private lessons with me!”
It didn’t sound like a pleasant experience.
He’s gone now, and one auto industry consultant says in effect “good riddance.”
We’re working on the story now, but Bill Michels, CEO of ADR North America, says Anderson “left behind a supply chain crippled by bankruptcies, unprofitable, unstable and undeveloped.”
He calls for a new era of more collaborative relationships between US OEMs and their supply chain partners.
But haven’t we heard this before? In the early 1990s, Ignacio Lopez made headlines by his vigorous cost cutting efforts with suppliers, and is credited by some as saving GM from bankruptcy at the time. He was said to have reduced GM's cost $1.1 billion in his first year as VP of Purchasing, and, like Andersson, was known for demanding continuous price reductions from suppliers.
His fate though was much worse than Andersson’s. On March 15, 1993, then GM CEO Jack Smith was ready to announce that Lopez would be promoted to president of North American operations. But right before the press conference, Lopez told GM he was leaving for a job with Germany’s VW, supposedly because they had committed to building two Lean factories, a long time vision of Lopez’s, including one in his native Spain.
However, he was later accused of taking GM trade secrets with him to VW, and eventually he was convicted of several related crimes in US courts, though Spain refused to extradite him. VW did reach an out-of-court settlement over the issue that included a $100 million payment and an agreement to buy $1 billion in GM parts. Ouch.
Lopez, however, is credited with centralizing and globalizing GM's procurement efforts, and bringing that practice into the automotive industry. But after he was gone, many back then (and ever since) said it was time for a new type of relationship between US OEMs and their suppliers. It never happened.
So, with Andersson now gone, will we really see a new type of supplier relationship in the US automotive industry?
I am not exactly optimistic.