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GM Will Hold Suppliers Liable for Recall Costs
General Motors Co.'s new purchasing contract makes suppliers of defective parts responsible for the cost of safety recalls, Automotive News reports.
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General Motors Co.'s new purchasing contract makes suppliers of defective parts responsible for the cost of safety recalls, Automotive News reports.
The Original Equipment Suppliers Assn. tells the newspaper that the new rule, which GM introduced in mid-July, states that suppliers could be held responsible for components deemed to pose a safety risk to consumers, even if the part met GM specifications.
OESA claims the contract language creates potentially catastrophic and uninsurable risk for suppliers. The association also complains that the contract requires vendors to provide unprecedented access to their financial records.
Automakers have been trying for years to increase supplier liability for parts and components that are covered by warranty. At the same time, OESA has attempted unsuccessfully to limit supplier liability to the period covered by the automaker's own vehicle warranty.
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