GM, Chrysler work on supplier relations

Published: May 31, 2013 2:37 pm ET
Updated: May 31, 2013 2:53 pm ET

Image By: Rich William

Related to this story

Topics Automotive
Companies & Associations Ford Motor Co., General Motors Co.

Are General Motors and Chrysler Group playing hardball with suppliers again? The latest automaker-supplier relations study by consulting firm Planning Perspectives Inc. was troubling.

The big jump in their scores in last year's study appeared to show that GM and Chrysler had learned a hard lesson during the 2009 bankruptcy proceedings: Better supplier relations pay dividends.

But after Toyota and Honda made real progress toward closing the gap with suppliers, the two Detroit companies seemed to stall during the past year. They didn't lose ground, but neither did they continue their progress, as reflected in the study of 441 suppliers. In fact, all of North America's six major automakers made zero progress.

John Henke, who conducts the study and has long been a strong advocate of close partnerships between suppliers and carmakers, was frustrated by the results. He says better relations lead to lower pricing, quicker sharing of technology and better-quality parts.

But are the bad old days back? It seems too early to write off the progress GM and Chrysler have made. Both have begun working with supply chains to ensure successful vehicle launches. That's a critical step because quality and productivity problems involving suppliers have hurt launches throughout the industry in the past year.

Last fall, Chrysler said it would start involving key suppliers earlier in product-development projects and would de-emphasize competitive bidding. It's too soon to assess the results of that effort. Chrysler also is helping suppliers adopt its "World Class Manufacturing System," a concept of continuous improvement.

GM has enlisted its retired engineers to help suppliers with the launch of its new full-sized pickups. The engineers are working mainly at GM's Tier 1 suppliers to ensure quality on key subsystems, but they also are keeping an eye on the readiness of Tier 2 and Tier 3 suppliers.

Those moves resemble the way the Japanese have long worked — successfully — with suppliers.

Yes, parts makers have been grumbling more in 2013. It's a stressful time. They have been under pressure to keep up with rising demand. More vehicles will be launched in the next year or so than at any other time in the industry's history.

Henke is right to alert carmakers to the danger of letting relations with suppliers slip. But these aren't the bad old days.

This column originally appeared in the May 20 issue of Automotive News, a sister publication to Plastics News.


Comments

GM, Chrysler work on supplier relations

Published: May 31, 2013 2:37 pm ET
Updated: May 31, 2013 2:53 pm ET

Post Your Comments


Back to story


More stories

Image

Canada's Papp Plastics is eyeing big opportunities with JV in Mexico

November 24, 2014 4:11 pm ET

Canadian injection molder and turnkey solution provider Papp Plastics & Distributing Ltd. will open an $11 million to $12 million joint venture...    More

Image

Indiana injection molder PRD expands

November 24, 2014 1:56 pm ET

Automotive supplier PRD Inc. is expanding its manufacturing facility in Springville, Ind.    More

Image

Can plastics return to the driver's seat?

November 24, 2014 6:00 am ET

When the June 1989 issue of Popular Science introduced three cutting-edge automotive technologies, including the latest Corvette and a powerful...    More

Image

New GM purchasing chief faces big hurdles to improve supplier relations

November 24, 2014 11:11 am ET

Steve Kiefer is moving into the eternal hot seat that is head of GM global purchasing and supply chain.    More

Image

Wilbur Ross steps down from IAC board

November 24, 2014 11:38 am ET

Financier Wilbur Ross Jr. has resigned from the boards of International Automotive Components Group SA and its subsidiaries due to new regulatory rest...    More

Market Reports

Plastics in Brazil - State of the Industry Report

This in-depth report examines the Brazilian plastics industry from a historical and geographical context. Our analysts provide insight on economic trends and forecasts, growing manufacturing sectors that utilize plastics, private investment opportunities, market environment challenges, and innovations in R&D.

Data tables and charts on producer prices, trade, plastics production and end market indicators is also included.

Learn more

Plastics Recycling Trends in North America

This report is a review and analysis of the North American Plastics Recycling Industry, including key trends and statistics based on 2013 performance. We examine market environment factors, regulatory issues, industry challenges, key drivers and emerging trends in post-consumer and post-industrial recycling.

Learn more

Injection Molders Market Report & Ranking 2014

This special package contains our 132-page 2014 Market Report on the Injection Molding segment and our exclusive 2014 RANKINGS database of 500+ Injection Molders for a discounted package price.

Learn more

Upcoming Plastics News Events

January 14, 2015 - January 14, 2015Plastics in Automotive

February 4, 2015 - February 6, 2015Plastics News Executive Forum 2015

June 2, 2015 - June 3, 2015Plastics Financial Summit - Chicago 2015

September 16, 2015 - September 18, 2015Plastics Caps & Closures - September 2015

October 27, 2015 - October 29, 2015Plastics Financial Summit - New York - 2015

More Events