Giving up DOMESTIC automotive customers? Fines for Problems

[Sidney Vianna]

Through the grapevine I hear that the number of automotive suppliers fed up with US automotive customers is growing and many suppliers are trying to move from US (Big 3 and Tier1) customers on to Japanese customers, who, apparently are much better to do business with.

Has anybody heard/seen anything concrete about this trend? Any personal experiences?

Also, is it just my impression or one of the principles laid out by ISO 9000:2000 - Mutually benefitial relationships - is totally amiss in this sector?

From what I gather, the US automotive customer supplier relationship is characterized by distrust, confrontation, adversarial, I-win-you-lose type of behaviors.

I would appreciate to hear from people who are inside that sector. I am sure that there must be exceptions to this, in case my perception is accurate.

 

[cncmarine]

Giving up ?????

How about being phased out.

The whole market is being out sourced.
Every year it the big 3 want 5 % price decreases.....that’s while China is buying up all of the scrap and raw material availability and costs are sky rocketing.Mean while the screws are going to China and the molds are going to India.

What I see and what I hear is the same.

The business is going over seas like the rest of manufacturing

Buchanan is going to be this countries only hope

 

[Bill Ryan - 2007]

Here's a little ditty from GM

 

[Marc]

The US automotive customer supplier relationship is characterized by distrust, confrontation, adversarial, I-win-you-lose type of behaviors.

Precisely.

I don't know that companies are jumping ship but I wouldn't doubt it. I did some work not long ago for a company trying to straighten out their Visteon scorecard. It was all over Visteon rejecting product which they bought off on by a waiver at the beginning of the contract because they could not provide an up to date print to the supplier. They wouldn't even provide a marked up print. They wanted my client to mark up a print (!) and send it to them for approval (which we did). Despite the fact that the Visteon SQA (over the year I worked with that client not very long ago Visteon changed the SQA 3 times in less than 12 months) admitted it was a Visteon issue, they said the scorecard could not be corrected without a visit and audit and that my client would stay on the 'no bids' list until everything was settled. The guy came, finally, ate lunch and left. A total waste of time. And nothing changed. I reached the point where I stopped shipments. When they ran out of parts they screamed bloody murder. Even this didn't get the scorecard fixed right, but I did get, in writing, another waiver and a written note that the SQA 'understands' that the supplier cannot guarantee parts to a non-existent print. I had a 3" binder with evidence of the history and why my client agreed to the contract to begin with.

I've worked in automotive on and off since the 1980's and it has always sucked working with Ford, GM and Chrysler. Ford even threatened a client of mine for working with me about 2 years ago because of what I wrote about Ford here. Ford was having meetings with suppliers the sole purpose of which was to get suppliers to get a consulting contract with Omnex (if I remember correctly it was Omnex). Everyone had to drive up to Rotunda and listen to Omnex's speil. A lot of wasted hours traveling only to hear Ford say, in so many words, "Here's the Omnex guy. He can help you". All the 'handouts' were Omnex literature.

I've dealt with Honda, Mazda and a couple of other companies outside the 'Big 3' and never had a problem. With Ford, GM and Chrysler my experiences have almost always been like Trial by Fire. Mutually benefitial relationships with any of the Big 3 is a joke. It's all them - The supplier is ALWAYS wrong.

As a last note, some years back a friend was thinking of buying a business which was supplying Chrysler. In fact, 70% of their busines was with Chrysler. I advised him to buy it jokingly with the qualifier "You don't know a thing about automotive. I guarantee you'll end up with me helping you and paying me a lot". Needless to say he decided against buying the business.

 

[Randy]

Sid it's just the typical USA management, boss, owner, "TUNOPIC" mindset that has beeen driving other production offshore to better climes.

The stupid "A's" that are CEO's, top level exec's and senior whipping boys just don't get and refuse to accept what is happening, kinda like the political leadership in Eastern Europe in the late '80's.....denied anything was wrong until they were out of a job.

The "I'm gonna get mine and who cares about you" mentality is cancerous in our national industry to about the late 3rd and entering the 4th stage in some of it.

We're going to "China Sydrome" production wise and the decison makers are going to be left standing wondering what happened and why. The dirty, hungry, un-educated, un-sophisticated, backward, so called 3rd World is going to eat our lunch.

Famous last words..."This is the way we always did it in the past. It worked for us then and it will work for us now" I'll attribute this to any of the last Roman Emporers or the leaders of any other failed civilization.

 

[D.Scott]

We have, for years, been primarily automotive until the last few years when we started to recognize the writing on the wall. As a tier 3 or 4 supplier, we aren't directly connected to the big 3 but we certainly feel the fallout as it trickles down through our customers. We can certainly understand that the automotive industry would benefit from a universal quality base and under the right system, we could probably all benefit. Our perception is that somehow the system got bastardized to the current state. Too many dictates have been passed down to the point where it appears the big 3 are attempting to micro-manage the entire supply chain. It may be because we are so far down the chain that we see things from a different perspective but the simple fact is we don't exist for a single customer. In this ecconomy it would be difficult to exist for a single industry.

Consequently we have placed an emphasis on non-automotive work. We have gone from 95% automotive in the last 2 years to about 80%. Of that, 1/4 is for automotive suppliers outside the big 3 circle. We don't do more business with foreign customers though. Most of the new business we are picking up is right here in the US. The automotive industry is alive and well right here in the US and is no longer confined to the big 3. It is easier to do business with the other auto makers and consequently it cost less. The "partnership" that exists outside the big 3 is real and that creates the win-win we are all looking for. We are left to run our own business without all the nonsense. If there is ever a problem, we are given help, not "fines". We spend our time supplying good product instead of pushing paper and jumping through a ringmaster's hoop.

In my humble opinion the big 3 is in for a rude awakening when they someday find all the decent suppliers in the chain have gone to greener pastures. They can sit on top of the heap with their whip in hand and wonder why there are so many cars on the road with foreign sounding names. Trouble is, those will be the cars built right here in the good old USA with high quality parts supplied by all the good suppliers they drove away. My only hope is that if the wheels ever do fall off the big 3, it isn't because the only suppliers they have left are the ones that need to be micro-managed.

Dave

 

[Jconlake]

Not the same subject, but equally telling is the makeup of cars in a supplier's parking lot. Employees fed up with the Big 3 are saying it with their own purchasing decisions.

 

[cncmarine]

If there is ever a problem, we are given help, not "fines". We spend our time supplying good product instead of pushing paper and jumping through a ringmaster's hoop.


Understand your point but the "fine" system works

 

[Craig H.]

If there is ever a problem, we are given help, not "fines". We spend our time supplying good product instead of pushing paper and jumping through a ringmaster's hoop.


Understand your point but the "fine" system works

CNC, with all due respect, the fine system may work for you, but from where I sit, it is a copout. Almost without fail, in my experience, the fines have literally taken the place of communication. Even when something happens that is out of our control, we get a short paid invoice and little information.

I won't go any further here, but this subject has been discussed at length elsewhere on the Cove.

In my experience, fine systems are nothing more than a profit center, period.

Again, I respect your opinion, but your experience seems to have been the complete opposite of mine.

Craig

 

[AllanJ]

Some while back, I got a copy of an email allagedly sent by Mr Nick Scheele August 16, 2002 to all Ford employees. Some pertinent extracts are as follows:

"We conduct our daily business through thousands of cross-functional contacts between Ford and supplier employees. These daily interfaces form the fabric of our business and are fundamental to our joint effort to design and build great products. Three years ago, the Company endorsed a set of core values that should underlie Ford's business relationships with its suppliers. Act like a partner. Trust and be trustworthy Communicate with consistency Be fact based Think value not just price...to be the Customer of Choice....we recognized that our track record in observing these values was uneven. Nevertheless, we agreed cross-functionally that conducting business in a manner consistent with these values is essential to Ford's long-term success. Our suppliers can choose the customers with whom they do business. If we are not our suppliers' customer of choice, they will dedicate their best people, invest their best resources, and offer the newest technology and innovation to our competitors -- poutting Ford at a competitive disadvantage...In these times, it is more important than ever that we be unavering in adhering to a values-driven mindset in our approach to daily supplier interfaces."

If genuine (and I believe it is) that 2002 email seems an act of prescience, Mr Scheele?


In fact, there was a television news item yesterday that stated how deep does the Big Three supplier discontent. Apparently aggression and poor treatment are of concern but suppliers are also concerned about their own proprietary information (intellectual property) being passed to competitors. If that is happening, and I have heard anecdotal evidence that it is so, it does rather make a mockery of other American companies expressing outrage at such nations as China failing to respect American copyright and other property rights, to the point that the USA might complain to the WTO.