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

Image

Cascade Engineering founder Keller to step down as CEO

September 16, 2014 8:33 pm ET

Cascade Engineering Inc. is undergoing a transition as President Mark Miller will also add the role of CEO, replacing founder Fred Keller, who has...    More

Image

Canadian, Mexican injection molders form auto supply joint venture

September 16, 2014 2:26 pm ET

A new automotive parts manufacturer will open in Querétaro, Mexico, through a joint venture between Canadian automotive supplier Papp Plastics and...    More

Image

Increased capacity in the US helps Zeon Chemical supply seals globally

September 16, 2014 9:46 am ET

The automotive industry continues to be one of the driving forces of Zeon Chemicals LP., which specializes in heat-resistant and oil-resistant...    More

Image

ZF finalizes deal to buy TRW, creating another global auto supply giant

September 15, 2014 1:09 pm ET

TRW Automotive Holdings, in a supply chain megadeal that has been in the works since mid-July, said Sept. 15 it has agreed to be acquired by German...    More

Image

Delphi CEO O'Neal stepping down

September 15, 2014 12:05 pm ET

Delphi Automotive plc announced that Rodney O'Neal will retire as CEO and president on March 1, 2015, ending his 43-year career at the global automoti...    More

Market Reports

Shale Gas Market - Analysis of North American Region

This report highlights the impact of shale-based natural gas on the North American plastics market and features an in-depth analysis of production trends in the United States during 2013 and a forecast for 2014 and beyond.

Learn more

Thermoformed Packaging 2014 Market Review & Outlook – North America

This in-depth report analyzes economic and market trends, legislative/regulatory activity impacting supply and demand, business opportunities and threats, materials pricing, manufacturing technology, as well as growth strategies being implemented by thermoformed packaging companies.

Learn more

Pipe, Profile & Tubing Extrusion in North America 2014

U.S. demand for extruded plastics is expected to grow by 3 percent in 2014, with PVC remaining the largest segment.

Plastic pipe will post the strongest gains through 2018, continuing to take market share from competing materials in a range of markets.

Our latest market report provides in-depth analysis of current trends and their financial impact on the pipe, profile and tubing extrusion industry in North America.

Learn more

Upcoming Plastics News Events

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

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

More Events