GM Slashes Chinese Suppliers from Its Supply Chain in Bold Cost-Cutting Move

General Motors is making power plays in its parts network—and Chinese suppliers just got benched.

The auto giant's latest maneuver rips a page from the 'de-risking' playbook sweeping corporate boardrooms. No more waiting for container ships stuck in geopolitical crosswinds.

Supply chain shuffle: GM joins the stampede of manufacturers rewriting global trade rules. Just don't ask how much this 'cost optimization' will actually save—Wall Street's already pricing in the supply chain disruption premiums.

One analyst's 'strategic pivot' is another factory town's recession. But hey—at least the 10-K filings will look leaner.

Trump’s trade punches trigger factory panic

Supply chain managers have been forced to play defense non-stop amid Trump’s trade wars on auto industry. Executives at General Motors began demanding that suppliers stop looking for the cheapest option and start looking for the most secure.

“Resiliency is important; making sure you have more control over your supply chain and you know exactly what is coming where,” said Shilpan Amin, the company’s global purchasing chief, at a recent conference.

The strategy is focused on North America, where General Motors builds most of its vehicles. The company wants those parts made in the region, too. It’s fine if they come from Mexico or Canada.

But China? Off the table.

A company spokesperson allegedly refused to comment on the internal moves, but CEO Mary Barra didn’t hide the long-term direction during the firm’s quarterly call in October. “We’ve been working now for a few years to have supply chain resiliency,” she said, noting they try to buy parts in the same country where cars are assembled.

China’s latest export bans on rare-earths in April and October only added fuel to the fire. First, they cut off some critical materials used in EVs and car electronics. Then came more restrictions.

Untangling decades of China ties is a mess

And just when things couldn’t get worse, China stopped shipments from Nexperia, the Dutch-owned chipmaker supplying cheap but vital chips to the auto industry. The freeze followed a fight over intellectual property rights. Within days, warnings spread that car factories around the world could stall.

Replacing China’s manufacturing scale isn’t easy though, or cheap. General Motors has already started distancing itself, investing in a Nevada lithium mine and joining forces with a rare-earth firm in the U.S.

But this new directive hits broader, and parts suppliers are rushing to comply, but they’re still mostly struggling, since these operations that have been based in China for decades.

Collin Shaw, who leads MEMA, the Vehicle Suppliers Association, spelled it out: “In some cases this has been 20 or 30 years in the making, and we’re trying to undo it in a few years. It’s not going to happen that fast.”

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