GM extended an olive branch to the supply base last week by scratching several contentious terms and conditions it added last year to its base purchasing contract, terms that suppliers felt exposed them to greater liability. Lieblein said the standoff distracted from "talking to them about technology and quality and driving waste from the system."
Lieblein acknowledged that GM made a "misstep" last year when it revised the contract terms without input from suppliers and implemented them without notice. Even though few, if any, suppliers chose to forgo GM's business because of the concerns, Lieblein decided to exclude the problematic conditions as a gesture of trust in GM's suppliers.
She says many suppliers already are working closely with GM to eliminate costs.
"It could be waste in the specs we provide for the part. It could be waste in [the supplier's] operations, or waste in our operations," she said. "We really have changed the lens that our teams use to look for that waste. And it's all over the place."
For example, one supplier worked with GM on a cost analysis that led to the supplier insourcing more of the parts needed to produce A-pillars for GM vehicles. The effort helped the supplier increase its scale and reduced GM's purchase costs with that supplier by 20 percent, a GM spokesman said.
Lieblein wouldn't cite GM's overall cost-saving target or give details about its discussions with suppliers.
In a letter sent to at least a few suppliers last month and obtained by Automotive News, GM said it wants to reduce its purchase costs from those suppliers by up to 10 percent over the next three years.
In the letter, GM offers to help identify waste, forecast costs, reduce raw-material costs and incorporate other methods. "Close collaboration will be necessary to ensure this challenge can be met," the letter reads.
In recent years, much of GM's profitability has been a result of higher prices on new and redesigned vehicles. In 2013, GM said, pricing contributed $2.4 billion more to its pretax profit than in 2012, pushing its earnings to $8.6 billion, excluding onetime items. GM's average transaction price in December hit a record $34,634 in North America, its most profitable market, according to TrueCar.com.
For the next few years, GM CEO Mary Barra has identified "significant reductions" in supply and logistics costs as a key strategic initiative, along with improving the image of its brands. GM has targeted a 10 percent pretax profit margin for North America by "middecade." It averaged 7.9 percent in 2013, vs. Ford Motor Co.'s 9.9 percent.
GM doesn't disclose its annual purchasing budget, the spokesman said. In a 2011 presentation to analysts, GM pegged its total annual spending on the direct purchase of materials at $77 billion.
Rob Fisher, president of TK Holdings Inc., the North American subsidiary of Japanese airbag maker Takata Corp., says GM has made clear that it's targeting inefficiencies, not suppliers' profit margins. He says his company is working with GM on logistics changes that would shift where some passenger-restraint parts are produced, which would lead to savings for both companies.
"They don't want our margins to drop," says Fisher, a member of a council of about a dozen suppliers that serves as a liaison to GM. "So far, down to the manager level, we're hearing the same thing."
Don Walker, CEO of Magna International, which makes chassis, interiors, powertrain systems and other components and is one of GM's largest suppliers, says GM and other automakers increasingly are looking to drive cost savings through smarter component designs, manufacturing methods and logistics, rather than simply slicing into supplier markups.
"The OEMs all seem to have recognized that you can only squeeze the lemon so much," Walker said.