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August 8, 2014

“Cruelty-free” cars and how GM could profit from them

Recently, an explosion at a plant in Jiangsu province, China, that sold products to a General Motors supplier killed at least 75 workers and injured another 185. Two days later, Bloomberg News reported on a study estimating that better interactions with suppliers could have increased GM’s operating profits by about $400 million last year. The coincidence of these two stories seems to defy the cost-cutting logic that has driven most auto-supply work to the “China Cost.” Is it possible that an automaker could have made more money and avoided an appalling tragedy simply by not focusing so much on lowering costs?

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