By Graeme Stewart
Purchases by General Motors from Mexican domestic suppliers in 2014 increased by 16 per cent in relation to 2013 igures and created a total income of US$14 billion.
The parts were distributed to different manufacturing centers around the world, meaning that Mexican domestic purchases represented 15 per cent of General Motors’ global purchases.
That was said by Raymundo Garza, Purchasing and Supply Chain Director of General Motors Mexico, recently at the Mexico Auto Industry Summit in Leon, Guanajuato.
He also spoke of the challenges facing those companies integrated into the supply chain and those wanting to join, saying the demands of the industry were quality, excellence, commitment and transparency.
Mr. Garza told delegates: “We have more than 550 providers across the country: you send around 5,000 trucks per week to our different plants, so we are talking about more than 600,000 components per year. That relects the enormous supply chain that is behind the GM complexes in Ramos Arizpe, Silao, San Luis Potosi and Toluca.
“Of the total supplier companies of auto parts that GM has in the country, 188 are located in the north, 108 in central Mexico, and 89 in the north west and some others in the south west and in Central America - and all of them receive components daily. “So there is no doubt that Mexico, when you also take into account its geographic location in relation to the United States and its skilled and enthusiastic labor pool is one of the most important locations to General Motors.”
Speaking of the challenges facing GM Mexico providers, Mr. Garza said: “We want to ensure that our work with our suppliers is long term. We do not consider short term strategies because we are focused on the highest technology for development for the service and beneit of our clients. Therefore, we are constantly striving for the permanent improvement of the supply chain to compete not only domestically but also internationally.
“As already indicated, we are going very well at the North American level but we have the opportunity to export components to other areas of the world such as Brazil, Europe and other countries. For that we also need to work on the technological development of tooling and raw material suppliers, and that is where you need to grow your national product.”
Speaking to MEXICONOW, Mr. Garza emphasized what he saw as a vital point for the industry: “We need a dialogue with the Mexican Government because the costs of electricity and telecommunications should be reduced. I cannot emphasize this enough -we need cheaper electricity costs. In Mexico, we need to continue reducing energy costs in general to ensure competitiveness in the future because it is one of the highest costs of manufacturing.”
And he asked: “What do we demand of our suppliers?”
His answer was: “They have to ensure that they are now and will be competitive in the future, having a high level of integration in the supply chain. For added value, they have to demonstrate that they innovate, transform and not only supply but also be manufacturers. They must ensure that they make investment in research, design and development and, in addition, that they have inancial stability, a solid quality system and manufacturing flexibility to ensure response to our demand.”
Finally, Mr. Garza said that the major factor required of their suppliers: “Is honesty, an honesty that is open and transparent because the relationship should be based on trust - us to suppliers and suppliers to us. We must ensure that we are delivering high quality vehicles. That is, and always will be, our ultimate goal”.