Once again, General Motors is trying to exorcise the ghost of Inaki Lopez.
Six months ago, GM introduced a new purchasing strategy -- dubbed the One Cost Model -- that aims to treat suppliers as partners rather than foes. Now the company has started to implement it.
Under the plan, a supplier can skip the traditional bidding process if it allows a GM team of engineers and purchasing executives to inspect its factories and peruse its books.
The GM team estimates the cost of producing a component, and if the supplier agrees, GM awards the contract without seeking rival bids. Each year, the two parties review the data to identify additional cost-cutting opportunities.
The idea is to give suppliers early input into a component's design before the design is frozen. The approach works well for Toyota and Honda, but GM suppliers could be forgiven for adopting a wait-and-see attitude. The One Cost Model requires considerable trust. To be sure, GM has promised not to leak its data to rival vendors.
And GM purchasing chief Steve Kiefer has assured suppliers that he won't beat them up for their last nickel. But suppliers haven't forgotten the bad old days, particularly the price-cutting tactics used by J. Ignacio Lopez in the 1990s when he was GM purchasing chief.
Kiefer has a steep hill to climb. We wish him luck.