OPINION: Beat up suppliers, lose market share; they go together

The following editorial appears in this week's edition of Automotive News

It is hard to believe Toyota Motor Corp. executives were taken by surprise -- as they say they were -- when the company's U.S. sales shot past 2 million units last year.

The Toyota, Lexus and Scion brands gained a full percentage point in market share, while General Motors and Ford together lost nearly 2 percentage points.

How should General Motors, Ford and the Chrysler group respond?

By now it seems the American companies have benchmarked everything there is to benchmark at Toyota. But there remains at least one striking difference between the Big 3 and Japan's No. 1: They have completely different ways of working with suppliers.

Toyota's success has come from methodically launching products that reach showrooms on time and achieve their sales objectives.

It doesn't have to rely on the kind of two-run homer that the Chrysler group hit last year with the Chrysler 300 and Dodge Magnum. But the Big 3 refuse to acknowledge a connection between squeezing suppliers and losing market share.

The purchasing guys at Ford and GM work on the assumption that getting costs out upstream will help marketing guys fight the incentives battle downstream.

But other factors also play a role.

Market share is aided by the technological edge, higher quality and smoother launches that go with good supplier relations.

With their massive North American volume, the Big 3 have acted as though they could set the tone when it comes to treatment of suppliers.

But as Toyota factories pop up in the United States, that advantage will disappear, too.

From Automotive News