About a month after the remarkable Feb. 25 announcement by DaimlerChrysler AG, Ford Motor Co. and General Motors Corp. that they would work together to create an online trade exchange, six Tier 1 suppliers revealed their own gutsy plan.
Dana Corp., Delphi Automotive Systems Corp., Eaton Corp., Motorola Inc., TRW Inc. and Valeo SA said they would explore creating their own exchange.
The automakers clearly want their mega-exchange, recently named Covisint at covisint.com, to be the industry's premier procurement and communication exchange.
But some of Covisint's thunder has been stolen. What are the Tier 1 firms really up to? Some thought is emerging that they're looking for leverage.
"I think it was the right move for the industry because it made the OEMs aware that they cannot just create something on their own and then expect everybody to say, 'hurray', and join," said Michael Heidingsfelder, a partner at Roland Berger Strategy Consultants in Troy, Mich.
There still is time for suppliers to have a meaningful impact on the development of Covisint, he said.
"Everyone is posturing to get a deal," added Rod Lache, vice president of Deutsche Bank Securities Inc. in New York.
Stephen Girsky, managing director and auto industry analyst for Morgan Stanley Dean Witter in New York, also thinks the suppliers are seeking some leverage.
"I don't see necessarily what this group of six or eight are going to do except sort of negotiate together," Girsky said.
In related news, Toyota Motor Corp. has told GM it will participate in the Covisint exchange. Toyota becomes the sixth automaker to join Covisint. Renault SA and Nissan Motor Co. agreed to join in April.
EDITOR'S NOTE: This column originally was published in Automotive News on May 29, 2000. AN staff reporter Ralph Kisiel can be reached at [email protected] or (313) 446-0369.
