GM has signed an agreement with Procura Auto Parts to establish a $4.5 billion facility aimed at improving resilience against supply chain risks and weather disruptions by sourcing rare and critical parts.
In a unique deal, GM has joined with specialist sourcing firm Procura Auto Parts to preserve cash in a $4.5 bn purchasing facility, aiming to help prevent supply chain disruptions from parts supply shortages and extreme weather events.
The OEM said the purchasing facility will receive funding through a banking syndicate led by JP Morgan Chase and Santander to prepay select suppliers on its behalf. In return, GM will issue Irrevocable Payment Undertakings (IPUs) to Procura Auto Parts to repay the company ,once parts are used in production, by 6 August 2029, allowing the carmaker to secure supply while keeping additional inventory costs off its financial reports.
The move could help shore up suppliers to avoid shutting down assembly lines during a supply chain crisis, and could help avoid spending on expedited priority freight as a last ditch measure in the event of a disruption.
It’s not known which parts are being targeted by the carmaker, but in the public filing, GM said the purpose of the deal is to “secure supply of certain critical inventory for the production of retail and fleet vehicles in the event of supply chain disruptions that may arise”, including extreme weather, natural disasters, cyberattacks in the supply chain and excessive demand.
The carmaker has been implementing anti-risk strategies to improve resilience in recent years, including aiming to remove volatile regions from its sourcing network and shifting procurement to regions like Mexico, Vietnam and India to mitigate tariff risks and disruptions. The OEM has also been increasing its end-to-end visibility by implementing digital tools and range forecasting rather than using single data points in mapping and predictive analysis.
So far, the strategy seems to be paying off, with revenue and profit at the company increasing while other OEMs are facing more difficult financials. Year-on-year in the second quarter of this year, revenue up 1.9% from $47.1bn to $48bn, with EBIT-adjusted up almost 30% from $3bn to $3.94bn.
The group’s CEO Mary Barra told shareholders that she expects the upwards trend to continue into 2027 and beyond due to a strong vehicle portfolio, expanding software and services ecosystem, and a more efficient manufacturing and sourcing footprint. “We will be onshoring significant production to further reduce our tariff exposure,” she said.
The OEM expects approximately $4-5bn of tariff exposure this year, but plans to offset through supplier actions, pricing and efficiency.
