GM full-size truck plants may stop, tariff-related supplier dispute

testerdahl

testerdahl

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A legal dispute between two automotive suppliers—Michigan-based Nexteer Automotive and South Korea-based Primax—now threatens to disrupt the production of General Motors’ full-size pickup trucks. Here’s why GM full-size truck plants may stop Nexteer, which supplies steering columns for GM vehicles, has filed a lawsuit against Primax, its tie rod supplier, alleging breach of contract over demands for a $6 million lump-sum payment and annual price increases totaling $3.5 million. Primax has halted shipments of the critical tie rods until its financial demands are met, a move that could bring GM’s truck assembly lines to a standstill. “Once GM runs out […] (read full article...)
 
What I'm reading is that GM subcontracted the steering column assembly to Nexteer who subcontracted the tie rods to Primax which is in South Korea.

Trump put a Tariff on auto parts coming from outside the United States and this company wants to cover their butt by demanding that Nexteer pay for the Tariff (passing it on to their customer). Now, Nexteer doesn't want to pay for the increased price so they are using for breach of contract.

GM just wants their steering columns so they can build trucks.

That about right?

Yep. These Tariffs are really helping the economy.
 
Nexteer is suing Primax for breach of contract. Nexteer is saying that the sub company, Primax, cannot alter its prices under any circumstances, as per the contract, and should keep supplying parts to Nexteer.

Primax argues that it was duped into signing a contract with no legal way of re-negotiating the price and has thus decided to stop shipping parts until its demands are met.

The tariffs are never mentioned but are heavily implied. This is just the start of the shit show that is unraveling before our eyes.
 
I’ve read at least 20 comments stating “build in the U.S.” That’s interesting. I looked into Primax some more and they are a global parts supplier working with Kia, Hyundai and other suppliers. It seems like GM isn’t even close to their biggest client. I plan to expand on that in this week’s truck news recap. How do you expect a global supplier to pick up roots and move all their operations to the U.S. to appease a U.S. President when the majority of their business is in Korea?
 
testerdahl said:
And finding a new supplier isn’t like opening up Google and finding a different pizza joint.

Besides Nexteer is a U.S. based Supplier. The issue is the supplier that the supplier uses. The complex web of the supply chain strikes again!
Click to expand...
You mean I can't find a multi billion dollar business that makes very specific components in every town? Whaaaaaaaaaaaat, that's crazy talk!
 
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