Auto execs ask: Are suppliers ready for rebound?

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DETROIT (Oct. 10, 1:25 p.m. ET) — Purchasing executives at several big automakers say they are concerned about whether their suppliers will be able to keep up as volumes rise.

“A concern I have is, as you look at the supply base, did we take too much out?” Bob Socia, vice president of global purchasing for General Motors, said at an industry conference last week. “Are we equipped for the rebound?”

Most suppliers cut deeply during the downturn. Since the recovery began last year, industry insiders have questioned whether suppliers — especially smaller ones — have the equipment and workers in place to meet growing demand.

Many automakers are probing more deeply into the health of their supply base, said Robert Young, Toyota’s top purchasing executive in North America.

“At the Tier 1 level, we’re pretty confident they have the installed capacity to support our ramp-up over the next year to year-and-a-half,” Young said last week on the sidelines of the annual automotive summit sponsored by the Rainbow PUSH Coalition. “The question is: ‘What happens with the entire industry once you get into the subtiers?’”

Sigmund Huber, Chrysler Group’s director of supplier relations, said that in a few cases, “Tier 2 and Tier 3 suppliers just aren’t able to keep up, which then limits everybody up the chain.”