Procura will prepay suppliers through JPMorgan Chase-led bank syndicate
General Motors has disclosed a $4.5 billion financing arrangement intended to keep critical components flowing through future supply-chain disruptions, The Wall Street Journal reported. The automaker outlined the plan in a regulatory filing.
Under the structure, supply-chain management firm Procura will receive funding through a bank syndicate led by JPMorgan Chase and Santander. Procura will then prepay certain suppliers on GM’s behalf, giving those suppliers the capital needed to manufacture and store inventory set aside for the Detroit automaker.
The arrangement allows GM to keep assembly lines running through supply-chain shocks without committing large amounts of its own capital to parts stockpiles. GM is aiming to secure supplies of high-risk components by prefunding the purchase of essential parts.
GM Chief Executive Mary Barra has pledged to remake the company’s supply chain into a system more capable of managing disruptions. “Our industry has experienced significant supply chain disruptions in the past for various reasons, and it’s safe to assume they will happen in the future,” GM said.