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Strategies & Market Trends : Graham and Doddsville -- Value Investing In The New Era -- Ignore unavailable to you. Want to Upgrade?

To: porcupine --''''> who wrote (1616)	4/29/1999 9:14:00 PM
From: porcupine --''''>	Read Replies (1) \| Respond to of 1722

GM sees steady reduction in purchasing costs MAINZ, Germany, April 22 (Reuters) - General Motors Corp. expects to make considerable purchasing savings within five years as technological advances and consolidation help drive down suppliers' prices, a GM executive said on Thursday. GM, which made 8.6 million vehicles last year and spent $86 billion on materials, expects a rolling cost reduction of at least 10 percent for some materials and components by 2002/2003, GM Vice President for Worldwide Purchasing Harold Kutner said. On average, material costs account for 60 percent of GM's production spending per vehicle, Kutner said at a GM Worldwide Purchasing forum. Kutner did not provide a 2002/2003 forecast for GM's materials budget and annual output or details of how much of its materials, parts and components GM expects to purchase at prices of up to 10 percent cheaper than at present. "On average we would be disappointed if by say 2002/2003 systems and components we are using are not at least 10 percent lower in cost than the systems and components we are getting now," he said. The cost of car airbags and anti-lock braking systems had fallen dramatically in recent years, for example, Kutner said. This trend in the automotive supply industry was expected to continue in the next five years, he added. GM buys parts, components and auto systems from around 3,000 key suppliers worldwide, ranging from metals, seats, glass and electronics to machinery and equipment. The number of GM's key suppliers could eventually shrink to around 500 companies as a result of competition, mergers, acquisitions and joint ventures, Kutner said. ((Paul Gallagher, Frankfurt Newsroom +49 69 756525, frankfurt.newsroom@reuters.com))