General Motors Corp aims to reduce its North American parts suppliers to about 1,100 in the next 18 months from about 1,500 as the size of the company shrinks due to restructuring.
GM is widely expected to file for Chapter 11 bankruptcy protection within days, after its bondholders rejected a proposal to restructure $27 billion in debt.[ID:nN27540145]
GM's global purchasing manager Bo Andersson said the automaker was still working to avoid a Chapter 11 filing but, in order to do so, it would need to have agreements in place with the bondholders and other stakeholders.
The Obama administration has given GM a June 1 deadline to have all its deals in place and to prove it can be a viable company.
The U.S. Treasury "were very clear, they want us to emerge as a company, outside of bankruptcy or inside of bankruptcy, debt free," Andersson said at an auto parts manufacturers' conference in Hamilton, Ontario.
Andersson said that if the company were to enter bankruptcy protection, it would seek to have all its parts suppliers designated as critical vendors so they would continue to be paid.
"We want to continue to produce vehicles in bankruptcy and, therefore, we will name all our production suppliers as critical vendors with the logic that we need the parts, we want to produce the vehicles and we're not going to exclude some (parts makers)." Andersson said that due to the steep downturn in the auto sector, GM would only produce about 6 million vehicles globally this year, compared to about 9.4 million units two years ago.
The company, which has burned through $88 billion since 2005, has survived on $19.4 billion in funding from the U.S. government since the beginning of this year.
"2009 has been a great year," Andersson told the crowd of auto parts makers. "I have worked for President Obama for a few months and he named his best friend -- his new dog, Bo -- after me.
Gasgoo: auto parts source
