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

Ford shrinks its supplier 'watch list'

October 20, 2014 1:35 pm ET

Ford purchasing chief Hau Thai-Tang says suppliers are starting to invest in additional production capacity because they think the recovery is real.    More

Image

Plastikon expanding in Kentucky

October 17, 2014 11:24 am ET

Automotive supplier Plastikon Industries Inc. plans to more than double the size of its production facility in Leitchfield, Ky.    More

Image

Chrysler's Busse has a surprise for you

October 16, 2014 6:00 am ET

Chrysler Group's interior design chief Klaus Busse and his team enjoy hiding what they call "Easter eggs" throughout Chrysler Group vehicles for...    More

Image

Yazaki expanding in Romania

October 16, 2014 6:36 am ET

Japanese car parts maker Yazaki Corp. has unveiled plans to open two new production facilities in Romania, reported local business daily Ziarul...    More

Image

French molder betting on growth in the auto industry, Detroit

October 14, 2014 6:00 am ET

Precision French molder AdduXi Group is opening its first factory outside of its home country — in a Detroit suburb — and the top local ex...    More

Market Reports

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

Plastics in Mexico - State of the Industry Report

This report analyzes the $20 million dollar plastics industry in Mexico including sales of machinery & equipment, resins and finished products.

Our analysts provide insight on business trends, foreign investment, top end markets and plastics processing activity. The report also provides important data on exports, production, employment and value of plastics products manufactured.

Learn more

Plastics Caps & Closures Market Report

The annual recap of top trends and future outlook for the plastics caps & closures market features interviews with industry thought leaders and Bill Wood’s economic forecast of trends in growing end markets. You will also gain insight on trends in caps design, materials, machinery, molds & tooling and reviews of mergers & acquisitions.

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

More Events