Auto Suppliers Continue to Grapple with GM's New Terms and Conditions

18 November 2013 Dashboard Insights Blog

General Motors (“GM”) issued new general terms and conditions (“Terms”) for direct material, customer care & aftersales, and tooling purchases effective for requests for quotation issued on or after July 15, 2013. The new terms and conditions are the most extensive revisions to GM’s terms and conditions in years. While GM’s existing contracts with Suppliers will not be amended to include the Terms, the new terms and conditions include 40 provisions and reflect significant changes from prior iterations.  Auto suppliers continue to grabble with how to address these new terms and conditions that, in many respects, alter the status quo. Provisions addressing warranties, quality, IP rights, duties to inform and audit rights are among the significant areas that GM has modified. Solutions addressing the changes need to be pragmatic.

Identifying the changes and differences from prior versions of these Terms was only the first step. Here at the Dashboard, we previously identified some of the top changes. Of course, suppliers to GM need to understand the full implications of these changed terms on their business. And, even more important, Suppliers need to think strategically about how they will respond to the terms GM now seeks to impose.  Foley & Lardner prepared this chart to assist Suppliers navigate the changes by not only identifying the most significant provisions and changes, but explaining the implications and recommending strategic responses to these changes.  Better keep this handy for your next GM negotiation, or negotiation with anyone really, as the changes are extensive and material to your business.

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