DETROIT (April 28, 2006) — General Motors Corp. is turning to China for aluminum wheels to replace those it previously sourced from Amcast Industrial Corp., the Fremont, Ind.-based supplier facing bankruptcy.
GM has secured an eight-year supply agreement with Zhejiang Wanfeng Auto Wheel Co. Ltd. for wheels, according to Bo Andersson, GM's vice president of global purchasing.
Amcast, operating under Chapter 11 bankruptcy protection since December, announced plans on April 11 to close plants in Fremont and Gas City, Ind., by mid-June.
GM, which has accounted in the past for 80 percent of Amcast's business, has propped up that company since its financial crisis erupted last November.
Amcast, which supplied 13 GM assembly plants, stopped shipping wheels on Nov. 30. It resumed shipments to GM on Dec. 7, two days after the auto maker won a court order forcing the supplier to do so.
GM's contract with Zhejiang Wanfeng is actually a continuation of one that Amcast had with the Chinese wheel maker. GM acquired that contract in bankruptcy court proceedings for $6 million, Mr. Andersson said.
That agreement meant that some of the wheels GM had been buying from Amcast already were coming from China. The new arrangement, and the closure of the Amcast plants, will increase that percentage.