GM looks for alternative supplies in China after deadly factory blast

BEIJING Sun Aug 3, 2014 4:52am EDT

The General Motors logo is seen outside its headquarters at the Renaissance Center in Detroit, Michigan in this file photograph taken August 25, 2009.    REUTERS/Jeff Kowalsky/Files

The General Motors logo is seen outside its headquarters at the Renaissance Center in Detroit, Michigan in this file photograph taken August 25, 2009.

Credit: Reuters/Jeff Kowalsky/Files

BEIJING (Reuters) - General Motors said on Sunday that it had asked its main Chinese supplier to find an alternative source of components after an explosion ripped through a factory a day earlier killing at least 69 people.

The accident at the Zhongrong Metal Products Co Ltd plant in Kunshan city in the eastern province of Jiangsu was China’s worst industrial accident in a year.

Aside from the fatalities, some 200 people were injured in the blast, state-run Xinhua news agency reported on Sunday, raising its casualty estimate from overnight.

According to Zhongrong's website, the factory made wheels that are supplied to GM and many other carmakers.

Distancing itself from Zhongrong, the Detroit automaker issued a statement saying it bought components from a company called “Dicastal" - which Zhongrong works with.

GM went onto say it had no direct dealings with Zhongrong, which it described as a "Tier-2" supplier.

Tier-1 component suppliers such as Dicastal are "required to source from Tier-2 suppliers who must meet both in-country environment and safety standards as well as quality standards," GM said.

The U.S. automaker noted that Saturday’s accident did not cause any immediate impact on its production because it has "sufficient inventory" of the parts, without specifying what the components were.

"We are working with our supplier to establish alternate processing capability," the statement said.

The GM statement said it was "too early to determine the cause of the explosion" as an official investigation was underway.

"We will closely monitor the investigation and, if asked, will provide any resources and information that can assist in this matter," GM said.

The blast was reported to have taken place in a workshop that polishes wheel hubs. A preliminary investigation suggested it was triggered when a flame was lit in a dust-filled room, the local government said on Saturday, describing the incident as a serious safety breach.

Xinhua reported that police took at least two company representatives into custody.

GM described Dicastal as one of its "global suppliers", but did not provide any further information on the company.

Asked if that Dicastal was Citic Dicastal Wheel Manufacturing Co., Ltd., a producer of aluminum alloy wheels headquartered in the eastern province of Hebei and a unit of Beijing-based Citic Group[CITIC.UL] , a GM spokeswoman in Shanghai said she did not have any information.

She also said she had no information on whether GM conducts safety inspections of production facilities run by lower-tier suppliers with which they do not do business with directly.

(Reporting By Norihiko Shirouzu and Ran Li in Beijing, Editing by Simon Cameron-Moore)

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Comments (4)
Art16 wrote:
GM, keep your cheap parts suppliers in China and support a country that has no respect for human life whatever. If this was an aluminum dust explosion, it was totally avoidable. Ask your own safety people, if you have any left who work for you.

Aug 03, 2014 7:44am EDT  --  Report as abuse
Jingan wrote:
GM….cowards.So much for safety audits and supplier certification.

Aug 03, 2014 7:46am EDT  --  Report as abuse
nose2066 wrote:
Are there any American made cars anymore? You know the old fashioned type – with parts that are made in America.

Maybe some of the “Japanese” cars that are made in the U.S. use American made parts?

Aug 03, 2014 7:51am EDT  --  Report as abuse
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