General Motors Co. has said no to two U.S. senators from Montana who want the taxpayer-backed automaker to restore a contract for precious metals mined in their state.
As it emerges from bankruptcy, GM is keeping contracts with suppliers in Russia and South Africa while cutting ties with Stillwater Mining Co., one of Montana's largest private employers.
Stillwater itself is majority-owned by the same Russian supplier, Norilsk Nickel.
Sens. Max Baucus and Jon Tester, both Democrats, had said the government's multibillion-dollar stake in GM compelled the automaker to give preference to Stillwater over the foreign suppliers.
Auto companies use small amounts of platinum and related metals for
use in catalytic converters that control vehicle pollution.
GM Vice President Robert Socia said in a Friday letter to the senators that as auto sales lag, the company needs less of those metals than it used to and can get them cheaper elsewhere.
Attempting to blunt criticism over GM's surviving foreign suppliers, Socia also disclosed that about half the automaker's precious metals will come from a Pennsylvania company with an existing contract.
Baucus and Tester called GM's response "a lemon."
"We're outraged over GM's decisions, and this fight is far from over," the senators said in a joint statement.
But options are running out fast for the 1,300-employee Montana mining company and its supporters.
A federal bankruptcy judge already has sided with GM on the matter. And the Obama administration's auto task force, headed by Treasury Sec. Tim Geithner, so far has refused to get involved.
Stillwater spokesman John Beaudry said Friday that his company still hopes it can revive its ties with GM. The lost contract will cost the company a projected $5 million to $10 million annually.
No immediate layoffs are planned, but company executives have warned that a downturn in the metals market could put hundreds of jobs at risk.