General Motors (GM) revises supplier contracts; Chrysler experimenting with no-bid contract

Changes are in part to address warranty costs, which have been a source of tension, as well as a likely reaction to the more aggressive stance of the NHTSA.

General Motors (GM) has adjusted their standard contracts with suppliers, to enable GM to recoup losses from the supplier for parts that are recalled – even if the part was made to GM specifications, according to Automotive News. Reportedly, the language is revised to include a statement that the supplier components "will not, at any time (including after expiration or termination of this contract), pose an unreasonable risk to consumer or vehicle safety." The updated contract language also requires suppliers to provide more financial information than in the past, ensure an uninterrupted 30-day supply of parts during any "forseeable or anticipated event," and that GM is not obligated to keep the supplier's data regarding vehicle technology confidential unless the two parties sign a separate agreement. The updated contract also spells out that the supplier must inform GM of any defects or quality problems that it discovers, including deficiencies in GM's component specifications.