Shifting from a tier-two to a tier-one supplier, Dow Chemical Co. announced a deal to become the direct and sole source of brake fluid for all of General Motors North American assembly plants.
Dow officials declined to disclose financial terms or the volume of fluid covered by the contract, but GM produced 2.4 million cars and 2.7 million trucks on the continent last year.
Dow already produced the brake fluid for GMs North American plants at its facility in Crosby, Tex., but the fluid was then sent to another company that was responsible for packaging and delivery. According to a Dow spokesman, the packaging company exited the business, leading GM to approach Dow about assuming a new role.
To meet the new contract, Dow will now ship the fluid by rail to its Midland, Mich., plant for packaging in 330-gallon intermediate bulk containers before just-in-time delivery. After use, another company will collect and recycle the containers.
Officials said that Dow Chemical coordinated with sister division Dow Automotive to meet GMs logistical requirements. They added that Dow had a geographic advantage to win the contract because the plan in Midland, where Dow is also headquartered, is centrally located to a majority of GMs plants.