Toyota loses lustre with suppliers

By Robert Sherefkin, Automotive News

Detroit, Michigan - Toyota has been dethroned as the automaker in North America with the best supplier relations in an annual ranking by suppliers. And Ford Motor Co. is getting far better grades.

According to a survey released this week by Planning Perspectives Inc. of suburban Detroit, Honda Motor Co. has the best relations with its suppliers. But Honda and No. 2 Toyota Motor Corp. both slid to "adequate," from "good to very good."

At a time when plummeting vehicle production has put suppliers under extraordinary pressure, the survey unearthed two striking trends:

1. The three major Japanese automakers -- Honda, Toyota and Nissan Motor Co. -- suffered a serious erosion of their traditional good relations with suppliers.

2. Ford -- which, along with its Detroit 3 peers, has had its battles with suppliers -- has noticeably improved its supplier relations.

For his survey, Planning Perspectives ceo John Henke Jr. surveyed 231 Tier 1 suppliers from February through April. Suppliers graded six automakers using yardsticks such as willingness to help suppliers cut costs, pay suppliers for canceled programs and reward top suppliers with new business.

Honda, Toyota and Nissan remain above the industry average in supplier relations, while the Detroit 3 are below average.

Suppliers told Henke that Toyota's problems are the result of "less experienced staff in Toyota's purchasing group for whom the 'Toyota Way' is not yet the way of doing things."

Suppliers told Henke they are more willing to share technology with Ford without the assurance of an order.

Just two years ago Ford had the worst rating of the six biggest automakers. Henke credits the turnaround to Paul Stokes, who became Ford's No. 2 North American purchasing executive in 2007. Ford's ranking this year is the highest ever achieved by a US automaker.

I'd rather passPercent of suppliers who said they would prefer not to do business with an automaker or are ambivalent about doing so

Honda 5%

Toyota 5%

Nissan 14%

Ford 19%

GM 41%

Chrysler 54%

Source: Planning Perspectives

Tony Brown, Ford's purchasing chief, says: "I'm frankly pleased with how our suppliers are responding to our approach."

General Motors showed slow but steady gains. "Bo [Andersson, GM purchasing chief] had his people coming through for him," Henke says.

Henke holds ex-Chrysler purchasing czar John Campi, who left in December, responsible for another last-place performance by Chrysler LLC.

"If Chrysler doesn't change its ways, it is going to be in big trouble," Henke says.

Fifty-four percent of suppliers said they prefer not to do business with Chrysler or are ambivalent about doing so -- the highest percentage for any automaker in the past three years.

Chrysler also scored last, and Honda first, in these categories:

-- Suppliers' willingness to invest in technology in anticipation of new business.

-- Automaker's willingness to help reduce costs and to help improve quality.

-- Automaker's involving suppliers early in product development.

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Toyota loses luster with suppliers from Automotive News (a Crain publication)