Carmakers see partnerships as a cure for supplier problems

Alex Graham, Automotive News

Automaker purchasing executives are increasing efforts to collaborate with partsmakers to overcome the stress of rising prices, supplier overcapacity and competitive pressures.

Those issues dominated purchasing last year and automaker executives expect little change in 2006. Most purchasing chiefs see more constructive relationships between suppliers and automakers as the way to meet those challenges in the long term.

Experience has proven that increasing pressure on suppliers has its limits,” says Burkhard Göschel, BMW board member for purchasing and development. BMW says it prefers a partnership approach with its suppliers.

For years Toyota has had a collaborative approach toward its suppliers in pursuit of the lowest cost and the best quality,” says Mark Adams, senior general manager for Toyota purchasing in Europe.

In an Automotive News Europe/SupplierBusiness survey published last May, suppliers saw BMW and Toyota as the automakers they most wanted to do more business with - and Ford, Fiat and General Motors as their least favorite business partners.

But last year, Ford and Fiat Auto launched long-term supplier partnership programmes.

Ford is entering into new long-term agreements with selected suppliers of key components globally to create a stronger, sustainable business model,” says Birgit Behrendt, Ford of Europe vice president of purchasing.

New failures have focused attention on a need for stability.

Supplier profitability is a key issue,” says Anil Valsan, program manager for transportation at Frost and Sullivan. Automakers have problems if their supply chain is disrupted, so it is in their interest to keep supplier partners for years.

From Automotive News (A Crain publication)