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GM restructuring seen as supplier friendly

While nobody in the auto industry has a good thing to say about Chrysler these days, analysts see General Motors taking a supplier-friendly attitude as it attempts to restructure.

GM held an investor conference on Wednesday as part of the sales pitch behind its plea for additional taxpayer support, and union concessions. Part of the conference call focused on supplier relations, building on the fact that Chrysler is promising to squeeze additional savings out of parts manufacturers, many of which are public companies.

"Unlike Chrysler, GM did not make any assertions in either its submission or during the conference call to the effect that it expected to extract further concessions from its suppliers beyond normal annual price reductions," said a report Wednesday from BMO Nesbitt Burns analyst Peter Sklar. "Moreover, GM intends to accelerate the movement of new and current programs to healthier suppliers and projects a 30 per cent  reduction in the number of its suppliers by 2010."

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In the analyst's view, this combination of increased orders and consistent prices is good news for GM's preferred Canadian suppliers, publicly traded Magna, Linamar and Martinrea.

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