The most unbelievable thing I saw was not willing to spend 3/4 of a penny (yes 3/4 of a penny) for a grommet to cure large noise from the engine compartment entering the passenger compartment. Also installing additional gussets in the C pillar to stiffen the body. You could feel the difference, even in a blind fold test (yes we did) just to make sure we where not just imagining how big a difference this made. The cost was $15.00 per car and was turned down. Customers would of paid more for the car as this changed the car completely. GM is cheap and I truly believe is about to fail again. They never learn. Their egos and gouging the customer is their down fall.
Bob
They are not the only ones. When I was at CWM we did work for Chrysler. Like all companies, they have quarterly audits, and during those they hit production costs hardest. Manufactured parts are priced out by the tenth of a cent. And their buyers shop around for the best price. We lost, and won, contracts by a 10th of a penny.
One bidding war revolved around the magnesium heatsink casting for the amplifier for neon tail lights. We were already making the parts. Had been for over a year. Dynacast undercut us after one Chrysler company-wide audit. We responded with a lower price. This went on until we had cut our profit to 3.5 cents per part. Dynacast beat us by 3.8 cents. So we packed up all the tooling to produce the part and shipped it to Plano, Texas. At the beginning of the next year, Chrysler had their usual quarterly audit, and Dynacast increased their price for the part, primarily due to a huge increase in the price of magnesium ingot. CWM was able to undercut their price, primarily because we were buying our mag from HydroMagnesium in Norway, and they hadn't increased their price much. So the tooling got shipped back to Chicago. all in the space of less than a year.
So let's review; Chrysler saved .3 cents per part changing to Dynacast. They spent over $3,000 to ship the tooling to Texas. They bought 300,000 parts from Dynacast at a saving of $9,000. They spent another $3,000 to ship the tooling back to us. That leaves them roughly $3,000 ahead. That is how the auditors (beancounters) think. By the way, that doesn't include the cost of labor to package and load the tooling. So they go to the board of directors, and tell them that they made Chrysler money. Maybe they get a bonus, or a bump in pay. (not figured into the cost, by the way) In reality, that profit works out to one tenth of a cent. And this is the kind of thing that made me prematurely grey, and eventually almost bald.
(by the way, it was rumored that at the time Chrysler had close to 7000 full time auditors on the payroll. How much did that cost?)