US motor giants move up supplier relations ranking

12 May 2010

12 May 2010 | Andy Allen

Tough financial conditions have forced Detroit’s car manufacturers to pay more attention to suppliers, while their Japanese competitors have fallen back.

That was the finding of the latest North American OEM Supplier Working Relations Study by Michigan-based consultancy Planning Perspectives. The annual study determines the supplier working conditions in many areas on the North American domestic OEMs (GM, Ford and Chrysler) and the foreign domestic OEMs (Toyota, Honda and Nissan).

While Toyota and Honda were still the car firms most respected by suppliers, the study found they were losing ground to Ford, which had overtaken Nissan to gain third place.

Planning Perspectives CEO John Henke said: “If there was a silver lining to the recession for US suppliers, it has to be that it caused the domestic automakers to wake up and realise how important their suppliers are to their future fortunes.”

Ford and GM were the biggest winners in this year’s study, improving in five categories of supplier relations measured by the survey.

Henke believes the US firms’ improvement reflects the fact that many of their suppliers went bankrupt or were nearly bankrupt to the extent that it threatened the auto businesses. This led to companies working hard to be fair and manage their suppliers more equitably, while continuing to consolidate their overall number of suppliers.

Toyota and Honda saw their scores fall, probably the result of both firms seeking aggressive price reductions from suppliers to compensate for falling sales after a period of dramatic growth.

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