Collision repairers say they’re bracing for part order delays in the wake of GM’s bankruptcy filing Monday. The company’s Service and Parts Operations (SPO) announced this week that it will cease operations at three parts distribution centers in Boston, Mass., Columbus, Ohio, and Jacksonville, Fla., by Dec. 31, 2009. The company has also informed more than 1,300 dealerships that their franchise agreements won’t be renewed next year.
“As GM strengthens its aftersales business, we’re aggressively pursuing strategies that allow us to continue fast parts delivery to our dealers and distributors, and improve our warehouse capacity utilization,” said Kevin W. Williams, GM North America vice president and general manager, Service and Parts Operations.
Chuck Sulkala owner of Acme Body & Paint Co., located in Boston suburb Jamaica Plain, Mass. said delays in receiving parts are likely to result from the closings, though the effects aren’t likely to be seen until next year.
“It’s unfortunate, but it’s one of those things you have to live with and go from there,” said Sulkala, who also serves as National Auto Body Council executive director. “People will have to plan an extra day or more for repairs, and insurance companies will just have to expect that things will take a little bit longer. That’s what happens there’s not much you can do about it.”
Jerry Kottschade, owner of Jerry’s Body Shop in Mankato, Minn., said the dealership that used to supply his shop with GM parts shut down last fall, and his new GM supplier has tried to capitalize on dealership closings in the semi-rural area in southern Minnesota where he’s located.
“Our supplying dealer went out and bought inventory from some of the dealers that were closing,” Kottschade said. “Two dealers closed in our area since last fall within a 30-mile radius.”
He added that he feels fortunate that his shop has yet to experience significant delays in GM parts orders due to the company’s cutbacks, but he’s not sure how long his supplier’s stock will last.
“The inventory can only last so long before it’s depleted. Down the road, we’ll probably see delays,” Kottschade acknowledged. “We’ve had back-ordered parts when things were running smoothly for GM. It would be naïve to say we won’t run into any parts shortage in the future.”
Kottschade added that GM’s cutbacks are likely to have a negative “chain effect” on manufacturers that supply the company with components, possibly making the supply chain even weaker.
GM also announced it will reduce its total number of assembly, powertrain and stamping facilities in the U.S. from 47 in 2008 to 34 by the end of 2010 and 33 by 2012.
“It’s got to be done,” Sulkala said of the GM’s cutbacks. “You just have to hope GM has made the right decisions and go from there.”
For a list of plants GM will close, click HERE.
In January, repairers predicted the effects the Detroit Three’s troubles could have on repairers. Click HERE to read more.
Chrysler recently announced it will close 789 dealerships. Click HERE to read more.