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Partnerships growing stronger, study shows

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Partnerships growing stronger, study shows



Amid the auto industry’s downturn last year, when dozens of suppliers filed for bankruptcy, Detroit auto companies promised to build stronger relationships with their parts makers. A new study to be released today shows their efforts are working.

Ford shot to third place in a study measuring the health of the relationships between parts makers and six major automakers.

“We made a decision as an enterprise that in order for us to be successful, that it was important for our suppliers to also be successful,” said Tony Brown, Ford’s purchasing chief.

In 2004, Ford launched a plan to shrink its supply base from 3,300 production suppliers to 750 with the intent of giving fewer parts makers more work, and giving remaining suppliers a better chance at profitability.

A smaller supply base also offered a chance at better communication.

Suppliers indicated that Ford sought fewer last-minute engineering changes and brought suppliers in earlier in the product development process.

Ford, which came in last three years ago, still trails Honda and Toyota, which ranked first and second, respectively, in the study. General Motors and Chrysler are in fifth and sixth place.

But all three domestic companies showed marked improvements, which may signal a transition for Detroit automakers from relationships steeped in distrust to stronger partnerships that aim to be more like those at Toyota and Honda.

Positive relationships pay off, said John Henke, CEO of Birmingham-based Planning Perspectives, which conducted the survey. “Suppliers are more willing to invest in technology for you and share new technology with you,” Henke said.

Planning Perspectives surveyed 510 suppliers in March and April, asking questions such as how much suppliers trust their customers and with which customers they have the best opportunity to earn profit.

The study showed Honda, for the second year in a row, edging out Toyota for the top spot.

“We’re pleased that we’re highly rated overall,” said Honda spokesman Ed Miller. “We’re especially happy that we’re ranked the leader in trust and loyalty.”

Although GM ranked low, Henke noted improving relationships across the board for the Detroit automaker. GM appointed a new purchasing chief in July.

“I am confident we are on the right track in improving our working relations with our suppliers,” said Bob Socia, GM’s vice president of global purchasing and supply chain.

Chrysler came in last, but both Henke and the automaker said Chrysler is laying the foundation for being a company with which suppliers will want to work. “We are working very hard to fix our internal processes and talk with suppliers in a transparent, fair and collaborative way,” the company said in a statement.

In November, Chrysler started a push to improve its relationship with suppliers. Dan Knott, who became Chrysler’s purchasing chief in December, launched monthly meetings with suppliers. At the end of those meetings, Chrysler asks suppliers to fill out a survey — anonymity optional — to convey their concerns.

The automaker has started to pay suppliers that make highly technical parts more quickly, too.

Henke said, “They’re rapidly approaching that point where they can start putting in those changes that are going to make a long term sustainable improvement in their supplier relations.”



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