US Suppliers: Big 3 relationships are getting better

Robert Sherefkin, Automotive News

Detroit, Michigan - Relations between General Motors and Ford Motor Co. and their US-based suppliers - particularly larger parts makers - are improving slightly but remain abysmal compared with those of Japanese competitors.

According to an annual survey being released today, a small but growing percentage of suppliers think GM and Ford are becoming better business partners. The survey also found that the Chrysler group's supplier relations improved for the fourth year in a row.

The overall rankings for the top six US automakers did not change. Toyota and Honda remain on top by a comfortable margin, followed by Nissan. Chrysler, Ford and GM follow.

Although the Big 3 have a long way to go, the survey suggests they are beginning to make progress, said John Henke Jr., president of Planning Perspectives Inc., the Birmingham, Michigan, research firm that conducted the survey. "This is not a fluke," he said. "Things are happening."

Supplier reforms

Suppliers rated the automakers' priorities for price cuts, quality, technology and other factors. Suppliers also graded automakers on their efforts to build long-term relationships, compensate suppliers for rising raw material costs and allow suppliers a decent profit.

More than 260 large suppliers participated in the confidential survey, conducted 15 March 15 to 30 April. The survey encompassed 54 of the top 100 suppliers ranked on Automotive News' list of the top 150 North American suppliers.

Relations between the Big 3 and their suppliers are improving in the wake of various changes made by top purchasing executives Bo Andersson at GM, Peter Rosenfeld at the Chrysler group and Tony Brown at Ford. But Henke says it's too early to tell whether the gains will be sustained.

Last week, Andersson told Automotive News that teamwork with suppliers is critical. "We work together to achieve mutual success," he said. "Suppliers, despite popular belief, are aligned with us and our strategies."

Chrysler spokesman Markus Mainka said the company is "pleased about outside recognition. Good supplier relations are, for us, a business imperative."

Ford spokesman Paul Wood declined to comment because he had not seen the report.

The fear factor

The percentage of US auto suppliers, by automaker, that said they give price breaks because they are afraid of losing the customer's business

General Motors 67%
Ford 42
Chrysler 41
Nissan 21
Honda 11
Toyota 5

Source: Planning Perspectives Inc.

From Automotive News (A Crain publication)