From: Automotive News
Detroit, Michigan-You can't help but wonder where the automobile business is heading.
Over the years, I have had the wonderful opportunity to talk to some of the great executives who spent their entire careers with automotive suppliers. They felt good about their jobs, and they cherished the relationships they had with their customers.
They used to tell me how proud they were to have a particular company as a customer and what a great partnership it had been over five or even eight decades. They didn't think anything could disrupt that relationship.
Well, if you spent any time in Traverse City, Michigan, last week at David Cole's Management Briefing Seminars, you know something has changed. The theme of the conference was â€œThe Perfect Storm.â€
Anyone who has seen that horrific film remembers it was about a bunch of storms intersecting, with a catastrophic result for the poor fishermen.
It sounds like the North American automobile industry might be adopting the same scenario.
The competition among automakers is so intense that they are squeezing the last ounce of blood from their suppliers. There don't seem to be any of the relationships that used to exist, and today most suppliers feel like they are in the commodity business.
It all started with Inaki Lopez, who was brought to North America by General Motors to work the kind of magic that he had worked in Germany. When he arrived, GM was in tough shape. He worked his magic - but at what cost. It wasn't long before his philosophy was accepted by all the automobile manufacturers.
But the Japanese automakers still have some excellent relationships with their suppliers. It's interesting that Toyota has the strongest link with its dealers and the strongest relationship with its suppliers. There might be a connection.
Toyota doesn't have any magic. It just understands the fundamentals of the game and is good at blocking and tackling. Toyota never seems to stray from its mission that was spelled out almost 60 years ago.
You have to have more than a good relationship with the people you buy from and the people who sell your products. If you haven't built trust and partnerships, chances are that you're not going to be No. 1 in the marketplace. These days, you might not even survive.
Partnerships with suppliers give you an advantage over your competition. They shouldn't be given up lightly.
(Keith Crain is chairman of Crain Communications Inc., which publishes European Rubber Journal, a sister publication to Automotive News)