GM opens new stamping plant in Texas, US image

Today the automaker officially opens a $200 million metal-stamping plant adjacent to its assembly plant in Arlington, Texas that is aimed at reducing shipping costs, as part of a broader rethinking of logistics at GM.

The company usually built its hoods, fenders and doors for the Tahoe and Yukon sport-utility vehicles at other plants in Ohio and Michigan and then shipped them to its assembly facility in Arlington, Texas.

“We spend billions a year on logistics,” said GM Chief Executive Dan Akerson. “Think about that, billions. Any savings I can get by cutting my logistics bill goes right to my bottom line and makes us more competitive. I’ve told our teams that we need to make this a priority to look across the organization and take the steps to cut the costs.”

Having already massively cut labor costs and closed unprofitable plants during the 2008/2009 recession, GM now sees the logistics sector as potentially the new source of profit from operations. Co-locating parts making and auto assembly promise to deliver both higher quality and bigger profit. General Motors and other automakers say they want to get rid of the costly accidents – like parts that arrive scratched or dented and have to be repaired. Workers at the Arlington plant previously had to waste time trying to get rid of imperfections caused by travel problems, GM said.

Via The Wall Street Journal