I heard from a reputable source that GM was now actually paying dealers to destroy discontinued parts.

Can anyone attest to this?

 

I have not heard that but I would not be surprised. That is about as smart as cash for clunkers.

 

What is the source?

 

That makes no sense whatsoever. First, the dealers own the parts on their shelves, not GM. Since this isn't a GM inventory cost, why would GM corporate care, or spend one dime of corporate money to do something? Sorry, but I think this is an urban myth created by someone with zero business experience.

 

There is a company that buy all the discontinued parts from the Manufactures. Name escapes me. My local GM dealer ordered some parts from them for me. He says all their old stuff goes there.

 

Many companies do this. For example, Classic Industries sells the long-discontinued tailgate weatherstrip for the 1977-1990 B-body wagons. It comes in the original GM packaging.

 

Many manufacturers provide a return allowance based on some percentage of purchases. Some manufacturers differentiate between those parts they want returned and those that have been deemed "scrap". Mercedes-Benz, until recently did not care if those "scrap" parts were returned to them or disposed of by the dealer. In the last year they have struck an agreement with some aftermarket company and now require all parts to be returned, at which time the "scrap" parts are offered for sale by that company.

When I was a GM parts manager, I hate to tell you how many parts I scrapped that fit 60's muscle cars. With foresight, I would be a very rich man...

 

When I was a kid, my Dad brought home a trunk full of steering wheels from the Olds dealer he worked at. Three of them were wood grained, and the rest were green. I managed to put one on my bike, and rode it to school. Back then, they had "bike racks" and kids would actually ride their bikes to school. When I "parked" in the bike rack, it got immediate attention, and may have been my start in fabrication. It wasn't long before there was a few Oldsmohuffy's parked in the bike rack, lol!

 

Destroying old parts is a long standing edict, depending on the size. A local GM dealer asked me years ago if i wanted an NOS rear glass for a 73 Delta 88. When they shipped the wrong one, and requested an RMA the dealer was told to put it in their dumpster. Too big to bother returning.
Any business doing an annual inventory count will address obsolete inventory and decide accordingly.

Paul

 

VPI is probably the biggest company that buys obsolete GM parts.

The source was from a man that works in a Canadian GM dealership parts department so possibly a Canadian thing?

I talked to him for over an hour the other night and it was among a host of other subjects so I did not get to question him further on it.

He spoke of it as fact and was quite disturbed by it.

 

There are times when company Exec's get big bonus's for reducing inventory. Sometimes there is a lot of inventory on the books that isn't real or vice versa a lot of inventory around that's not on the books. The latter usually happens when departments are keeping things going that are officially retired. The world of inventory is very mysterious.

 

But how does inventory on dealership parts shelves matter to GM corporate? It's not an inventory cost that GM corporate is carrying.

 

GM must have some interest in the parts inventory or they wouldn't pay to have it destroyed if in fact this is happening. Typically destroyed inventory is inventory that is either too expensive to carry or shouldn't be on the books in the first place due to poor inventory controls. There are various ways to subsidize or even create value using inventory. When it gets out of hand or not real it needs to be made gone. I'm no GM corporate expert but I have seen a thing or two. Again, not saying this is actually happening but just pontificating for rumaric pleasure.

 

Dealer inventory is of no particular concern to the manufacturer, unless it interferes with future purchase performance of the dealer, which can inhibit the dealer's ability to stock newer, better moving parts.

As far as the manufacturer scrapping items, a percentage of a manufacturer's parts profits are held in escrow to cover losses, whether from scrapping the parts or selling them at a loss to an aftermarket supplier. All they care about is movement and turn... they could care less if you can but that widget you need seven years down the road. They're more concerned about what it costs them to keep a non-selling part on the shelf.

Sorry to go on and on... I've been dealing with car manufacturers and parts inventories for way too many years.

 

Not exactly the same thing, but when Volkswagen (UK) moved their headquarters to another part of the country the scrap dealers who got the contracts to clear up the site had specific instructions to render unusable a large quantity of parts that weren't required.


Roger.

 

That's true they buy up disscontinued parts cheap and resell them for big mark up.So answering the question.FICTION.

 

Gm doesnt destroy the inventory....the dealerships dispose of it. I worked in several GM dealerships as a kid, 2 times in parts departments.

The dealerships decide if the inventory isnt moving, or if its too old to sell in their eyes, it costs more to store it than than to dispose of it....

in around 87 i hauled 4 71-72 GTO core supports to the dumpster of one dealership i worked at...my manager said it had to go to the dumpster..what ever happened after hours he didnt care so after 5 i took them home and i did it for the entire time i was there, the stuff wasnt rare then..but i got a lot of cool stuff...some i used, some i sold most i threw away after years of tripping over it.....(if i only knew what i know now...holey crap)....i have also hauled stuff home out of other dealership parts department dumpsters....many many times...

a very good friend of mine owned a salvage yard..its hey day was 60-75ish..they had a contract with the biggest dealership/warehouse in St Louis..and they bought old inventory thru them as scrap...they had to take everything including warranty stuff like engines and transmissions etc..i saw the product....i actualy got to dig thru it when his old man retired in about 98 or 99 and bought a truck load of trim and chrome all in boxes and wrappers...mostly 55 56 57 chevy trim and a ton of 62-68 Pontiac stuff...

im sure it happened everywhere across the country too

same thing at a mitsubishi dealership i worked at...we would do inventory once a year and it wasnt much time after that..in the dumpster parts went....

i dont know what they do anymore, been too long since ive worked at one...

 

My point is that GM corporate has no financial interest in dealer inventory, thus this rumor is false.

 

Joe P. is correct. The Dealerships are considered a franchisee ( I think). GM does not give a hoot about how much inventory a dealership (franchisee) carries. It is sort of like saying Subway is trying to reduce their inventory (cold cuts) stored in some franchised store. Totally fiction..... Once the dealership buys the inventory (parts) it belongs to the dealership, not on GM's books as an expense anymore.

 

Just got off the phone with a GM parts guy who has been at the dealership for 40 years.
Long standing practice from GM, destroy all warrany return parts, dealers get reimbursed.
Return Obsolete parts, as decreed by GM sales tracking to Vintage Parts Inc of Beaver Dam, Wi. Dealer gets reimbursed or GM VPI buys stuff from dealer.
Parts believed defective or have liability issues are ordered destroyed or returned.
Nothing has changed in 40+ years.

 

When we submit a parts return list, GM sends it back with parts labeled "hold" (return to GM) or "scrap" (which we can dispose of). We are reimbursed for the scrapped parts, so that may be how that rumor started. Once a part is discontinued, we can't even return it.

 

I believe both of these statements, as the one thing GM has lots of is lawyers. This is likely the source of the (incorrect) rumor.

 

Warranty return parts and discontinued parts are 2 different things.I believe they scrap some warranty parts after the dealer is paid for that job.They do not call all warranty parts back,the ones that are not called back are scrapped.

 

X2

GM allows a percentage of the dealer return reserve for what they deem "scrap" parts. Perhaps that is what the OP was referring to. At the rate items go obsolete these days, it's almost never enough, which also forces dealerships to establish their own in-house scrap procedures.

Also, directing the "vintage" parts to an aftermarket supplier is a relatively new procedure. The last time I managed a GM store was 2005 and that was not part of the return protocol at that time.

 

Believe me, there was no Vintage Parts Inc in Beaver Dam 40 years ago.

- Eric

 

no kidding.....never heard of it til recently.its a new thing..when i say new i mean less than 10 years

i worked at a dealership and was assigned to the parts department...im the grunt that went thru the inventory with a list, pulled the parts, and put them in a dumpster..that was around 86 ish i guess...