Supplier group head will challenge automotive OEMs

By Bradford Wernle, Automotive News Europe

Brussels-Lars Holmqvist has not even begun his official duties as CEO of the European auto component supplier association CLEPA, but he has already started a controversy.

Holmqvist bluntly criticized automakers, particularly Ford, DaimlerChrysler and General Motors, for treating suppliers poorly.

Holmqvist said Ford's global terms and conditions agreement governing its relations with suppliers was “not acceptable from any point of view ... in all my experience I have never seen anything so one-sided, I would almost say arrogant.”

But Holmqvist rates Toyota highly and says the Japanese manufacturer still honors its suppliers. It's no coincidence Toyota is so profitable, he says.

Holmqvist, a 57-year-old native of Sweden, takes over as CEO of CLEPA in May. His office term is indefinite. He's an imposing figure: 195 centimeters tall with white hair and a deep, booming voice.

Holmqvist is on a mission- restoring civility and trust to badly frayed relations between manufacturers and suppliers. The partnership there once was has deteriorated, he feels.

“Now there's an abuse of the dominant position. You can't trust anyone. You don't know if you will get paid. You don't know if you'll be honored for your technical skills,” he says.

Raising money has become tough for suppliers. “We're known by bankers as a very poor industry,” Holmqvist says.

Holmqvist hopes he can make a difference when it comes to improving automaker-supplier relationships. “I hope in this position I will be able to try to make the very old word 'partnership' useful again. We're very far from that now.”

Holmqvist wants to see manufacturers and suppliers sit down and begin a bilateral discussion over the issues affecting the industry. He applauds a recent initiative by manufacturers to make their concerns about future legislation known to the European Commission. He believes suppliers have a lot of expertise to offer in areas such as CO2 emissions and pedestrian safety and can contribute to the dialogue.

Christer Palm, president of Plastal, a Swedish supplier of bumpers, praises Holmqvist for his blunt, straightforward style and his honesty.

“The Swedish way is not to get emotional,” Palm says, “but more to act on facts.”

“He knows the industry inside out,” says Palm, a past chairman of the Scandinavian Automotive Suppliers Association, a position Holmqvist also held. Palm points out that Holmqvist has to perform a balancing act at a time when supplier-manufacturer relations are very difficult.

“We have to live with our customers,” Palm says.

Holmqvist's view of the world was formed during his many years in the cozy world of the Scandinavian auto business. He entered the industry with German chemical supplier Henkel in 1976 and was managing director of several companies including Emissionsteknik and Konstructions-Bakelit. He was also director of the Swedish Institute for Quality and twice chairman of the Scandinavian Automotive Suppliers Association.

Holmqvist fondly remembers his days as a supplier executive when he called on Saab and Volvo. Those relationships were built on trust, he says.

“Up to 10 years ago, you didn't even bother with contracts. You had a framework. You

agreed on things. Sometimes you didn't make the best calculation. Some other times customers came in and made late changes on a vehicle. You tried to accommodate those changes. You would gain or lose, but you tried to balance things. Agreements were made in good faith. You made sure you went into the plan. You were proud like the father of a new baby as you were standing there with your parts. You expected -- and got -- recognition for your work.

“There was continuity in who you dealt with at the manufacturer. Some people you would see for 15 to 20 years.”

Holmqvist is realistic enough to know the industry isn't going to return to an atmosphere where there are no contracts. He also believes the industry needs to restore its own credibility so it can again attract the brightest young talent.

“The best people don't go into the auto industry because they don't think there's a future. We're losing people with technical degrees because they're going into other industries. It's a pity because the automotive industry is one industry where the volumes are fairly constant. It should be a profitable, stable industry.

“Everybody has the same priorities. We've got to improve relationships with our customers. This is the most important thing for CLEPA. I've never felt people so united. People are sick of it. They've had it.”