The American company General Motors has signed a unique agreement for the purchase of auto parts worth up to $4.5 billion aimed at preserving cash and preventing disruptions in supply chains. This was reported by CNBC.
The renewable agreement involves Procura Auto Parts, which specializes in sourcing rare and critical parts. Funding will be provided by a banking syndicate led by JPMorgan Chase and Banco Santander, which will make advance payments to selected suppliers on behalf of General Motors. In return, the automaker is obligated to repay the funds after using the parts in production, but no later than July 31, 2029.
This deal allows the company to exclude inventory costs from its balance sheet while it will pay interest on the components used and agreed-upon premiums.
The new agreement comes amid several years of global supply issues in the automotive sector. General Motors and other manufacturers have reviewed their sourcing amid the backdrop of tariffs imposed in the U.S. and a desire to move away from services provided by Chinese companies.
Previously, some of the most problematic components for the automotive industry included semiconductor chips, rare earth elements, and wiring harnesses.
News from the automotive world is published with the support of REGO INSURANCE, which offers CASCO insurance. CASCO will help maintain stable financial conditions in unexpected situations.
