Can you foresee a time when your company no longer does business with the Big Three? Supplier Comments “If there is a God.” “Already have!” “We are close to that point. Why deal with purchasing departments that only look at low cost? “Because they shop technology, which is very unethical.” “Going into the aftermarket business.” “Aftermarket is much more profitable.” Can you foresee a time when some
Can you foresee a time when your company no longer does business with the Big Three?
Supplier Comments
- “If there is a God.”
- “Already have!”
- “We are close to that point. Why deal with purchasing departments that only look at low cost?
- “Because they shop technology, which is very unethical.”
- “Going into the aftermarket business.”
- “Aftermarket is much more profitable.”
Can you foresee a time when some suppliers refuse to do business with the Big Three?
OEM Comments
- “Already some suppliers are turning down business.”
- “Big Three and suppliers need to work as a team. Not a 'this is my price, take it or leave it' situation.”
- “Difficult to obtain payment, and relationships are lost.”
- “Forced reductions alone will drive suppliers to companies who see them as partners.”
- “GM in particular does not know how to partner with suppliers for collaborative wins.”
- “If there's no profit in supplying parts, then why produce them?”
- “Japanese companies may control who gets the majority of business.”
- “The Big 3 vacillate too much. Honda and Toyota make a plan and stick to it. Suppliers are more comfortable in that situation.”
- “There's always Japan, Germany and Korea.”
- “Why invest in someone heading for a crash? Would you?”
Respondents talk about impact of OEM pressure to cut component prices.
Supplier Comments
- “Not only is being a supplier to a Tier 1 only marginally lucrative, a quality issue can result in a cost recovery that can financially ruin a small supplier and will completely negate any profit any supplier expected to make.”
- “All the fat on the supplier side is gone.”
- “It's a race to the bottom.”
- “Look at the financial performance of Tier 1 and 2 suppliers. They are not able to make many more price cuts without risking bankruptcy.”
- “Maybe the Big Three should actually try and fix some of their own internal systems and stop 'bleeding the empty stone.'"
- “There is room for additional efficiencies, but the current supplier situation is not sustainable.”
- “We are at the bottom right now. We will have to move business to lower labor countries in the next 10 years – if we survive until then.”
- “The Big Three (soon to be Small 3) have so much baggage with union contracts. They will all fail. I hope I live to see it.”
OEM Comments
- “Cost cuts hurt our quality, but we (design engineers) are forced to do the cost cutting. We design a part that is robust and thoroughly tested, but then we are told to cut the cost. That is what lowers our quality.”
- “Even after years of price cutting by the Big 3, there is still a lot of fat and waste in the supply chain.”
- “I have seen declines in responsiveness, support and service with price cuts, but not actual product quality reductions.”
- “Some suppliers are still posting record profits.”
- “Suppliers continue to get more efficient or at least should strive to. I think that the quality of goods and services from outsourced jobs is inferior to the in-sourced jobs. This will bite the company in the long run.”
- “Work sent overseas came back all wrong and needed rework. Cheap price should not be the criterion.”
