General Motors has established a $4.5 billion purchasing facility with Procura Auto Parts to ensure access to critical components, aiming to mitigate future supply chain disruptions.
The deal reflects the automotive industry's ongoing efforts to build more resilient supply chains following pandemic-induced disruptions, aiming to prevent future production halts and secure access to essential components.
General Motors announced an agreement with Procura Auto Parts, a third-party inventory management firm, designed to secure the future supply of critical components. The automaker has set up a $4.5 billion purchasing facility under which Procura will buy certain parts from suppliers. This initiative aims to free up GM's working capital and ensure access to essential inventory in scenarios such as natural disasters, cyberattacks, or periods of excess demand. Banks including JPMorgan Chase and Santander are providing funding for Procura, with GM offering payment guarantees. The agreement is slated to last for three years. Automakers have been increasingly focused on managing supply chains more actively since the COVID-19 pandemic highlighted vulnerabilities, particularly concerning semiconductor shortages.