In the wake of the disastrous explosion in China that killed at least 75 employee and injured close to 200 more, General Motors has announced it will not be making any changes to its supply chain safety standards farther down the line, according to The Wall Street Journal. The automaker said it will continue to practice industry standards, which puts the onus on the closest component providers to watch for safety violations among suppliers down the chain.
"Our tier-one suppliers on a global basis are required to make sure that they are sourcing from suppliers that are implementing the right safety standards," said Dan Ammann, GM's president, in a reference to auto component suppliers that are dealing directly with carmakers. "We have uniform focus on safety from a company perspective all around the world."
GM Not Directly Responsible
In the wake of the accident, the company was quick to point out that this was a supplier-owned and not a GM-operated plant.
"In this particular instance this was a supplier to a supplier, as opposed to us, so we are a couple of steps removed, but obviously it is a tragic situation regardless," said Ammann.
GM has a significant presence in China along with U.S.-based automakers, and the companies and Chinese authorities both said that while safety has improved and fatal accidents have dropped, there are still far too many occurring and operators need to ensure better regulations and practices will lead to safer operations in the Asian nation.
A Country On The Rise
China is undergoing a tremendous boom in the automotive sector, according to USA Today, and that has led to more U.S. carmakers establishing operations there to capitalize on the local market.
According to Reuters, the damage from the accident was so great that GM is searching for other suppliers so it doesn't have to curtail operations. The obliterated factory made and polished wheel hubs for GM and other American manufacturers. Chinese officials have reportedly said the industrial accident was the worst in the country in more than a year.
GM said it had sufficient parts on-hand to complete the jobs it is currently working, but needs to find new suppliers quickly. The company added that's it's far too soon to determine what caused the blast.
Situations like these highlight the importance of strict oversight over the supply chain, as well as supply chain software that can track product components as they move from link to link.