The auto making company has been experiencing trouble from suppliers which have adversely effected the sales of its cars.
According to the most recent General Motors news update, it is being seen that the auto making company is facing some serious problems regarding the proper supply of its cars due to some issues between the suppliers and the company. Only last year, it was seen that the auto making giant received a decreased operating income due to the constant issues and disputes between the company and suppliers, which resulted in the firm losing around $144 per one automobile which would have otherwise added to the operating income of the firm. Along with the firm, one more company that faced similar issues was Fords Motors.
As per a survey carried out by Planning Perspectives Inc to record relations that companies had with the suppliers, it was seen that General Motors and Fords Motors both had quite a low score as a result. The poll that was conducted indicated how these troubled relationships with the suppliers have made such a negative impact on the sales of both the automakers. According to tradition, it has always been seen that suppliers are seen to be making new and good offers to companies that they feel they are comfortable with and have always refrained from making huge deals with companies they feel are troublesome. As per the poll results, it was seen that GM was one of those companies that the suppliers thought to be troublesome and rather avoided making a trade with it. Analysts believe that this is expected to put a negative effect on the sales of the auto making firm.
In the survey results, it was seen that General Motors managed to get a score of 224 from a mere 500 which indicated that the firm witnessed a loss of $144 on each vehicle sold or manufactured. On the other hand, Fords managed to score a little better than that with a score of 261 from 500. If only these issues had not arisen, it could have been possible for GM to make $750 million as the operating income with Ford receiving $354 million.
In the same poll, the automakers that ended up receiving the highest score came out to be Toyota Motors and Honda Motors as per the results from around 435 suppliers in total. Keeping in mind the most recent earnings report that was submitted by General Motors, it will be seen that the firm ended up disappointing analysts in general by reporting low earnings and quite a weak quarter as compared to the previous quarters that it had gone through.
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