Suppliers' trust in Big 3 shows slight gain

June 13, 2006|By DETROIT FREE PRESS

DETROIT -- Auto-parts suppliers report that their relationships with General Motors Corp., Ford Motor Co. and the Chrysler Group are improving and they trust the automakers more than they did a year ago, according to a survey released yesterday.

While that was the first group improvement by GM, Ford and Chrysler in the sixth annual survey by research firm Planning Perspectives Inc., the working relationship between the three Detroit automakers and their suppliers is still ranked as poor.

Most suppliers reported they had "little" trust of GM and only "some" trust of Ford and Chrysler. Asian rivals performed much better, the survey found.

More than 260 top-tier suppliers participated in the latest anonymous survey, which was conducted in March and April.

"I think these results are really great news," said John Henke, president and chief executive of Planning Perspectives. He noted that GM and Ford have not performed well in past surveys.

Despite the gains, Henke said, "There's a lot of room for improvement."

Automakers' relationships with suppliers often can be strained as automakers push for price reductions, last-minute changes to parts and other demands.

But the relationship between an automaker and its supplier can be critical to its success in the marketplace, affecting quality, production and even whether a supplier decides to offer an innovative new feature to one automaker over another.

This year's survey showed that the suppliers' working relationships with Detroit automakers improved on the whole. It also found that bigger suppliers had better relationships with automakers than smaller ones.

The performance of Asian automakers has been largely stagnant for the past few years, showing little improvement.

Toyota Motor Corp. performed best, with trust levels approaching "great."

Nissan performed just a little better than Chrysler. But in a twist, suppliers reported that they trust Honda Motor Co. less than they used to, the first time the automaker has suffered a score decline in the survey. Despite that setback, Honda's performance is still second only to Toyota.

Henke said that new programs to improve relationships with suppliers at GM, Ford and Chrysler seem to be paying early dividends, and that automakers should stick to them.

The survey also said Toyota, Honda and Nissan are getting better-quality parts year after year than GM, Ford and Chrysler, largely because of the greater pressure the Detroit automakers are applying to cut prices.

"Cost continues to have far more importance than quality" to GM, Ford and Chrysler, the survey found. "Chrysler continues to place relatively more emphasis on quality than do Ford and particularly GM. Honda and Toyota continue to more closely balance cost and quality."

Interest in new technology from suppliers continues to grow. However, interest in technology from Toyota and Honda increased the most, suggesting that they recognized it as a possible competitive advantage.

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