Relations between General Motors Corp. and Ford Motor Co. and their suppliers - particularly larger parts makers - are improving slightly but remain abysmal compared to those of Japanese competitors.
According to an annual survey released June 12, a small but growing percentage of suppliers think GM and Ford are becoming better business partners. The survey also found that Chrysler's supplier relations improved for the fourth year in a row.
The overall rankings for the top six U.S. automakers did not change. Toyota and Honda remain on top by a comfortable margin, followed by Nissan, Chrysler, Ford and GM.
Although the Big Three have a long way to go, the survey suggests they are beginning to make progress, said John Henke Jr., president of Planning Perspectives Inc., the Birmingham, Mich., research firm that conducted the survey. ``This is not a fluke,'' he said. ``Things are happening.''
Suppliers rated the automakers' priorities for price cuts, quality, technology and other factors. Suppliers also graded automakers on their efforts to build long-term relationships, compensate suppliers for rising raw material costs and allow suppliers a decent profit.
More than 260 large suppliers participated in the confidential survey, conducted March 15 to April 30. The survey encompassed 54 of the top 100 suppliers ranked on Automotive News' list of the top 150 North American suppliers.
Relations between the Big Three and their suppliers are improving in the wake of various changes made by top purchasing executives Bo Andersson at GM, Peter Rosenfeld at Chrysler and Tony Brown at Ford. But Henke said it's too early to tell whether the gains will be sustained.
Andersson told Automotive News, a sister publication to Plastics News, that teamwork with suppliers is critical. ``We work together to achieve mutual success,'' he said. ``Suppliers, despite popular belief, are aligned with us and our strategies.''
Chrysler spokesman Markus Mainka said the company is ``pleased about outside recognition.''
``Good supplier relations are, for us, a business imperative,'' he added.
Ford spokesman Paul Wood declined to comment, saying he had not seen the report.
Big suppliers prosper
The biggest suppliers have a more positive opinion of the Big Three than do their smaller brethren. In part, that's because they are getting more business. It's also because the automakers are making a greater effort to communicate with them.
Lear Corp., for example, was named one of Ford's preferred suppliers last year - a designation that will allow it to win more business.
``All the [automakers] are recognizing long-term that there has to be some level of stability in the supply base,'' said Lear President Douglas DelGrosso. ``There is some positive movement there.''
Among Japanese automakers, survey respondents said Nissan and Toyota favor big suppliers, while Honda gives midsize and large vendors the same treatment.
Once again, the survey highlighted a sharp contrast between the top priorities of the Japanese automakers and the Big Three in key categories: price, product quality, technology, on-time delivery and service/support activities.
In nearly all categories, suppliers said Toyota was the most attuned to supplier concerns and GM the least attuned.
Japanese automakers also scored well on one of the most contentious issues: the rising prices of raw materials. Suppliers said Japanese automakers are twice as likely as the Big Three to compensate them for raw material costs.
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Here are the percentages of auto suppliers, by automaker, who said they give price breaks because they are afraid of losing the customer's business.
General Motors Corp.: 67%
Ford Motor Co.: 42%
DaimlerChrysler Corp.: 41%
Nissan Motor Co. Ltd.: 21%
Honda Motor Co. Ltd.: 11%
Toyota Motor Corp.: 5%
Source: Planning Perspectives Inc.