Automakers, suppliers seek same things

By Robert Sherefkin, Automotive News / April 18, 2005

DETROIT -- What do automakers want from suppliers and vice versa?

Roughly the same things: Close and early ties. Strong relationships. Credibility.

"There is no magic formula for success," said Steven Armstrong, vice president for purchasing at Volvo Car Corp.

"Success requires establishing relationships with suppliers. And trust is a big element."

Armstrong was part of an SAE World Congress panel consisting largely of automaker executives last week that explored strengthening supplier relations.

Bryan Jackson, a former Toyota Motor Corp. executive, said a partnership is required to obtain competitiveness and quality.

Automakers, he said, "expect suppliers to own quality."

Supplier executives on a separate SAE panel that focused on Tier 1 and automaker relations cited strategies similar to those espoused by automaker executives.

But the suppliers expressed caution because of pricing demands by the car companies.

David Westgate, CEO of Jason Inc. of Milwaukee, acknowledged the automaker-supplier relationship works best when goals align. But he warned: "Protect your balance sheet. No cash. No credit. No company."

George Dettloff, president of SKF Automotive Division in Plymouth, Mich., said a collaborative relationship makes the difference. But he warned suppliers to be prepared to "get shopped around."

"It's a disincentive for suppliers to invest in research and development only to have our work go out for bid," Dettloff said.

Ken Hopkins, a vice president with Timken Co. of Canton, Ohio, said the strategy of developing areas from a company's greatest success benefits suppliers.

He said Timken did that by adapting wheel hubs and sensors around its bearings.

"The relationship with OEMs works best when goals are aligned," Hopkins said.

Don Manvel, CEO of AVL North America of Plymouth, Mich., said supplier-automaker relations are strained during this period of troubles at General Motors and Ford Motor Co. as well as price increases for steel and resin.

"This is exactly the time when they need our help," Manvel said.

Then he offered another point: "This is an excellent opportunity to grow and make money."

From Automotive News