Filed under: Etc., Manufacturing/Plants, GM
It's no secret that the auto industry's most profitable vehicles are also the hardest hit when gasoline prices climb past consumers' comfort levels. Bo Andersson, the man behind GM's purchasing decisions, says that the tipping point currently hovers around $3.30 a gallon. At that price, sales start to slow, causing a world of hurt for GM and the other automakers. But, he pointed out another rising cost which hurts the industry: shipping. As the auto market shifts towards sourcing parts from all over the world, the rising cost of oil is raising the cost of getting parts from their country of origin to the plant making the vehicle. According to Andersson, for every dollar the price of oil increases, GM spends $6 million more for global logistics. That's a very large number, and the price of oil is doing nothing but climbing these days.
[Source: Automotive News]
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