Parts suppliers in agreement: It's hard to trust GM

[pupp1]

Parts suppliers in agreement: It's hard to trust GM

Toyota and Honda fare best in survey


May 31, 2005

BY DEE-ANN DURBIN
ASSOCIATED PRESS


Auto suppliers' trust in General Motors Corp. is at its lowest level in 15 years, according to a survey being released today by a Michigan consulting firm.

Eighty-five percent of the suppliers questioned who work with GM reported a poor working relationship, and just 3% said they have a good or very good relationship. Fifty-three percent of suppliers said they prefer not to work with GM, saying the automaker has little regard for suppliers' financial stability.

Toyota Motor Corp. and Honda Motor Co. fared best in the survey. Sixty-three percent of suppliers have a good or very good relationship with Toyota; 53% said the same about Honda.

Planning Perspectives Inc. of Birmingham questioned 259 suppliers in March and April about whether automakers help or hinder them, how well they communicate and how much potential they have to make a profit. The employees questioned were generally salespeople who work directly with automakers.

The results weren't much better for Ford Motor Co. or DaimlerChrysler AG's Chrysler Group. Seventy-eight percent of suppliers said they had a poor relationship with Ford and 66% said they had a poor relationship with Chrysler.

Planning Perspectives President John Henke said relationships have deteriorated to such a degree that some suppliers are afraid to post profits because they worry that the domestic automakers will think they're making too much money.

"Of all the industries that we have worked in, the North American auto industry is clearly the most adversarial," Henke said.

GM spokesman Thomas Hill said the company meets six times a year with its top 250 suppliers and encourages them to report any problems. The company also has advisory groups for smaller suppliers and minority suppliers, he said.

"Basically, while we think these surveys are interesting, they're very subjective," Hill said. "We think we have a good relationship with our strategic suppliers, and we have measures in place to check that without a third-party survey."

Just 3% of the suppliers who work with Toyota and Honda said they would prefer not to do business with those companies, compared with 36% of those who work with Ford and 29% of those who work with Chrysler.

For suppliers working with Nissan Motor Co., 75% said they have a poor or adequate relationship and 25% have a good or very good relationship.

Henke said all automakers pressure their suppliers to lower costs. But Toyota and Honda are better at working with suppliers to ensure that happens, he said.

Toyota sends engineers to suppliers' plants to work together on ways to cut costs instead of threatening to use a cheaper supplier, Henke said. He also said Toyota doesn't punish suppliers for increasing their profit margin on a part as long as they're cutting costs. As a result, 73% of the suppliers who work with Toyota rate the company as one of their most preferred customers.

"One of the things that differentiates Honda and Toyota from everybody else is the fact that they have a philosophy of respect for the individual," Henke said. "It doesn't matter if it's their employees, their customers, their dealers or their suppliers."
Source

[Dizzer]

Amen. As a rep for a small Tier III who "has" to call on several GM operations, I totally agree with the findings. GM's business used to mean that, as a supplier, you were at the forefront of your industry. Today, all GM's business means is that you've survived the never-ending purchase/bidding cycle. When I look at the crap my competition supplies to GM it comes as no surprise that the company is suffering. Engineering decisions are made by GM Worldwide Purchasing. Process development is made by GM Worldwide Purchasing. Tooling, fixturing and equipment decisions are made by GM Worldwide Purchasing.
Because we represent small suppliers, we have made the determination that, at this point, we are better off competitively to have our competition take GM's business and have to suffer financially for it. As a sentimentalist, I pray for the day when that is no longer the case.

[1BadPig]

I bet GM doesn't pay on-time either. Net 90 days is probably more like 120 days.

[1999 White C5 Coupe]

And in the end, not only does the GM consumer suffer with poor quality and reliability, GM suffers too with decreased market share.

[Barondw]

Another reason why Japanese quality is better. They work with their suppliers to help them make betetr quality parts and at a price that both can live with. If a supplier has serious problems Toyota sends in their special personnel to find permanent solutions. When will GM, Ford, and the Germans learn? Probably never they aren't bright enough to figure it out

[timman]

Originally Posted by Barondw

Another reason why Japanese quality is better. They work with their suppliers to help them make betetr quality parts and at a price that both can live with. If a supplier has serious problems Toyota sends in their special personnel to find permanent solutions. When will GM, Ford, and the Germans learn? Probably never they aren't bright enough to figure it out

You need to read this...it's long, so be patient.

http://www.uwsa.com/issues/trade/japanyes.html

[LAMRONH]

Pretty powerful read, Timman.
Americans are divided and getting more so, at the urging of so many minityrants with their own agendas, such as the unions, the Jesse Jackson types, Vinnie Fox, the open borders folks, out of control courts, the congress, utterly dysfunctional federal agencies, the Hate America Firsters of the Left, internal politicians everywhere who prefer their fiefdoms to the real mission.
The USA is in deep deep doo doo, heading down the path that the formerly Great Britain did, and GWB is as clueless as Bill Klingon was. I think Bush is not the traitor that Klingon is, tho his relationship to His Cousin Vinnie makes me wonder about his long term goals.

Unfortunately the adversarial relationship between labor, management, dealerships, suppliers, government, etc. continues.
I have come to the conclusion that GM is one big dysfunctional family and it needs a Dr. Phil intervention, with all players at the table. Now that would keep Dr. Phil busy for a while. By the way I am not a great Dr. Phil fan, but he does at least read folks the riot act about their self- and other- destructive behaviors, which all the above auto industry players are engaging in.

Timman, I'm going to pass that article on to a few friends, even tho it's 12 years old it is timely and important.

[amsnare]

A key word here is : respect.
We do not
They do
a cultural thing
I see no changing this, or at least I have no idea of how to do this

[Globalist]

Originally Posted by Dizzer

Engineering decisions are made by GM Worldwide Purchasing. Process development is made by GM Worldwide Purchasing. Tooling, fixturing and equipment decisions are made by GM Worldwide Purchasing.

Purchasing mission should not be selecting suppliers and parts. Purchasing mission should be to purchase--administrative work needed to get the parts supplied. Parts and suppliers selection should be done by Engineering working of course with Purchasing to negotiate and finalize deals.

If there is a problem at GM, it's not Purchasing fault, it's more Engineering passivity. If Engineering isn't active in the process, Purchasing will obviously get you the cheapest deal. It's Engineering responsibility to lead in that process and use Purchasing as a tool to free their time to do more important things--designing, and selecting suppliers, parts--and not the inverse.

[amsnare]

Originally Posted by Barondw

Another reason why Japanese quality is better. They work with their suppliers to help them make better quality parts and at a price that both can live with. If a supplier has serious problems Toyota sends in their special personnel to find permanent solutions. When will GM, Ford, and the Germans learn? Probably never they aren't bright enough to figure it out

IMO, it is a difference in cultures, not intelligence..
We need for the powers that be, the ones who run this country to change their attitudes...
We all need to learn "respect" ...

[big swede]

Originally Posted by amsnare

IMO, it is a difference in cultures, not intelligence..
We need for the powers that be, the ones who run this country to change their attitudes...
We all need to learn "respect" ...

I disagree, it's common sense. If people on this board can see an obvious problem don't you think someone at GM should be able to also. Besides do you really think that only Asian people work for Toyota.

This is also the reason why Nissan had some quality issues especially with interiors because when Ghosen (sp) took over one of this first things he did was bust down the suppliers.

[314boi]

They steal our designs and give them to other suppliers to use, getting them at a lower price. Its blasphemy, then you spend money having legal peruse action against this.

Then they have you re-quote the business you won only after 2 years into production that was to run 5 years only to loose it to a lower bidder unless you give them back a load of cash to keep the awarded business you already have. Suck they do

[timman]

Originally Posted by Globalist

Purchasing mission should not be selecting suppliers and parts. Purchasing mission should be to purchase--administrative work needed to get the parts supplied. Parts and suppliers selection should be done by Engineering working of course with Purchasing to negotiate and finalize deals.

If there is a problem at GM, it's not Purchasing fault, it's more Engineering passivity. If Engineering isn't active in the process, Purchasing will obviously get you the cheapest deal. It's Engineering responsibility to lead in that process and use Purchasing as a tool to free their time to do more important things--designing, and selecting suppliers, parts--and not the inverse.

That's an entire topic of power struggle all it's own. Engineering/Accounting.
Two fifedoms with conflicting goals. Make it right/get it cheap.

[timman]

Originally Posted by LAMRONH

Pretty powerful read, Timman.
Americans are divided and getting more so, at the urging of so many minityrants with their own agendas, such as the unions, the Jesse Jackson types, Vinnie Fox, the open borders folks, out of control courts, the congress, utterly dysfunctional federal agencies, the Hate America Firsters of the Left, internal politicians everywhere who prefer their fiefdoms to the real mission.
The USA is in deep deep doo doo, heading down the path that the formerly Great Britain did, and GWB is as clueless as Bill Klingon was. I think Bush is not the traitor that Klingon is, tho his relationship to His Cousin Vinnie makes me wonder about his long term goals.

Unfortunately the adversarial relationship between labor, management, dealerships, suppliers, government, etc. continues.
I have come to the conclusion that GM is one big dysfunctional family and it needs a Dr. Phil intervention, with all players at the table. Now that would keep Dr. Phil busy for a while. By the way I am not a great Dr. Phil fan, but he does at least read folks the riot act about their self- and other- destructive behaviors, which all the above auto industry players are engaging in.

Timman, I'm going to pass that article on to a few friends, even tho it's 12 years old it is timely and important.

Hold on to your hat...China is doing the same thing. Just last week the U.S. government "officially" expressed concern over the Chinese manipulation of currency.

[Dizzer]

Originally Posted by Globalist

Purchasing mission should not be selecting suppliers and parts. Purchasing mission should be to purchase--administrative work needed to get the parts supplied. Parts and suppliers selection should be done by Engineering working of course with Purchasing to negotiate and finalize deals.

If there is a problem at GM, it's not Purchasing fault, it's more Engineering passivity. If Engineering isn't active in the process, Purchasing will obviously get you the cheapest deal. It's Engineering responsibility to lead in that process and use Purchasing as a tool to free their time to do more important things--designing, and selecting suppliers, parts--and not the inverse.

I wish that it were true. If I could generalize the feeling of many plant-level engineering types around GM it's "Why bother?" The bottom line for many suppliers is that they are avoiding GM's business like the plague. It just isn't worth the hassle. The RFQ/Bid process is a never ending bid auction where the lowest bid has 10% whacked off the bottom line and is then sent out yet again with "new" target numbers. GM has become as bad as GE. And if you've ever dealt with GE, you'll know it's not meant as a compliment.