Global automotive platforms prompting supplier shakeout

David Sedgwick
AUTOMOTIVE NEWS

Published: August 7, 2013 3:10 pm ET

Related to this story

Topics Automotive
Companies & Associations Ford Motor Co.

TRAVERSE CITY, MICH. — The auto industry's switch to global platforms will trigger a shakeout of the world's component suppliers.

"Will [global platforms] create pressure for consolidation? The answer is clearly yes," said Scott Kunselman, Chrysler Group's purchasing chief at the seminars on Tuesday.

Chrysler, for example, designed the new Jeep Cherokee on the Fiat's Compact Wide platform, which also underpins the Dodge Dart. Chrysler produces the Cherokee in its Toledo plant, and also is expected to build the compact SUV in China. Meanwhile, Fiat is using the platform for the Viaggio and the 2014 Alfa Romeo Giulia.

Global suppliers are best qualified to produce parts for those vehicles. But it's not clear yet how much Chrysler will shrink its supplier network. The automaker currently has 1,200 parts suppliers, Chrysler said. It expects to have fewer in years to come, but Kunselman's purchasing team is still working out its global strategy to purchase parts.

Ford Motor Co. appears to be further along in its consolidation drive. Birgit Behrendt, the company's vice president of purchasing operations, said Tuesday that the company currently has 1,150 suppliers, and eventually will winnow that number down to 750.

Ford's 104 Tier One suppliers will get more Ford business -- and presumably more profits -- under the company's program for preferred suppliers, dubbed the Aligned Business Framework.

"It is a positive approach," Behrendt said. "The prior approach certainly wasn't working for us, and it wasn't working for our suppliers. There is nothing wrong with being a Tier Two supplier."

Big suppliers are poised to reap the benefits. Staci Kroon, president of Eaton Automotive, said mega-suppliers can meet rising demand for components in one region with extra production from other markets.

"It gives you a buffer between the regions," Kroon said. "We don't have to build maximum production capacity in every region."


Comments

Global automotive platforms prompting supplier shakeout

David Sedgwick
AUTOMOTIVE NEWS

Published: August 7, 2013 3:10 pm ET

Post Your Comments


Back to story


More stories

Auto supplier adds production space, jobs at plant in central Hungary

April 22, 2014 9:50 am ET

Automotive parts manufacturer Ábrahám Kft. has expanded its factory in Túrkéve, in central Hungary, with the launch of a new production hall as part...    More

Image

Ascend targets nylon for auto applications, opening propylene monomer unit in Texas

April 18, 2014 10:57 am ET

Materials firm Ascend Performance Materials Inc. is in full operation at its new nylon 6/6 compounding line in Florida and will break ground by the...    More

Image

German auto supplier Dr. Schneider opens second US plant

April 17, 2014 12:57 pm ET

Dr. Schneider Kunststoffwerke GmbH, a German supplier of plastic interior auto parts, has opened a $29 million manufacturing plant in Russell Springs,...    More

Huntingdon Fiberglass launching second line

April 16, 2014 2:18 pm ET

Huntingdon Fiberglass Products LLC is getting set to start up a second production line later this year and hire 15-20 new employees as it sees demand ...    More

Mexico reports rising auto production

April 14, 2014 1:18 pm ET

MEXICO CITY — Mexico’s automotive industry assembled an unprecedented 774,731 light vehicles in the first quarter, 6.5 percent up on the 7...    More

Market Reports

Thermoformed Packaging 2014 Market Review & Outlook – North America

This in-depth report provides analysis and discussions of economic and political conditions, market trends, legislative/regulatory activity impacting supply and demand, business opportunities and threats, materials pricing, manufacturing technology, as well as strategies being implemented by thermoformed packaging companies. In addition, there are reviews of 25 leading thermoformers in the packaging segment, assessing their growth initiatives and performance metrics over 10 years.

Learn more

Automotive Market Review and Outlook 2014 – The Americas

This 75-page report features in-depth analysis of the automotive industry for the Americas. It includes discussions of market trends, legislative/regulatory activity impacting production and threats as well as design strategies being implemented by the major automakers. Detailed charts and data tables outline North American automotive production over the last five years.

Learn more

Plastics Building & Construction Market Review and Outlook 2014 with MS Excel chart data

This report provides in-depth analysis of the plastic building and construction market for North America, including discussions of trends, opportunities, threats and the latest developments in construction trends that impact plastics processors.

Learn more

Upcoming Plastics News Events

May 6, 2014 - May 8, 2014Plastics in Medical Devices 2014

May 12, 2014 - May 12, 2014Plastics News Brazil Pharma Summit

September 10, 2014 - September 12, 2014Plastics Caps & Closures 2014

February 3, 2015 - February 7, 2015Plastics News Executive Forum 2015

More Events