Soaring raw material costs and an unprecedented number of supplier bankruptcies are challenging the automotive supply chain like never before. Auto maker purchasing departments have become pivotal to the success, and survival of both suppliers and the customers they serve.
Ward’s 7-part series stems from interviews with the purchasing chiefs of GM,, , Nissan, and Toyota. This is Part 2.
WARREN, MI – WithCorp. fighting for survival, the No.1 auto maker at least can take solace in the initial success of the GMT900 fullsize SUVs.
And the auto maker is quick to praise the suppliers working on the massive program, many of them having carried over from the previous-generation GMT800 architecture. The new program has about 400 suppliers.
“So far, we are very happy with the execution, and we are very happy with what the consumers say,” Bo Andersson, vice president-global purchasing and supply chain, tells Ward’s.
To achieve that level of satisfaction, Andersson says suppliers were given “stretch targets” because Vehicle Line Executive Gary White made it clear the goal was to be the best in the segment.
The program was completed without massive re-sourcing to new suppliers for many components on the GMT900 SUVs, which include the Chevy Suburban and Tahoe and Cadillac Escalade. The Chevy Silverado and GMC Sierra pickups launch this fall.
Suppliers that carried over from the GMT800 to the GMT900 includeInc. (axles), Collins & Aikman Corp., (carpet), Magna International Inc. (frames, fascia and mirrors), Gentex Corp. (interior mirrors), Corp. (seats) and Corp. (wiring harnesses, steering wheels and radiator assembly).
In addition, tire suppliers are the same: Goodyear Tire & Rubber Co., Bridgestone Corp. andAG.
The air-induction system comes from Siemens VDO Automotive.was the original air-induction supplier on the GMT800 program, but GM gradually has been moving certain Delphi contracts to other suppliers to be cost competitive.
One of the few direct carryover parts from the previous program was the fuel tank, supplied by Inergy Automotive Systems of Paris and Kautex Textron GmbH. Both companies retain their roles in the GMT900 program.
“The fuel tank is a good example where you have a big part and a lot of risks, both on our side and the supplier side,” Andersson says. “But it’s always a balance because you want to have a fresh vehicle, a competitive vehicle.”
In many cases, carrying over an old part is not prudent. “You need to design new parts,” Andersson says. “The worst thing we can do is to carry over an old vehicle part and become uncompetitive in the marketplace.”
Andersson points to the interior of the new Escalade as a stellar example of suppliers working in harmony with their OEM customer.
“Having that joint objective that we wanted to do another homerun on the next-generation large truck really motivated the suppliers to stretch on their piece,” he says. “If they do their piece well, then they understand how their pieces integrate with the rest of the vehicle.”
GM took the lead on interior design and integration on the GMT900, although for several years the auto maker attempted to outsource interiors to suppliers. That strategy was ditched 18 months ago.
Suppliers were more than eager to work on the GMT900, because annual volumes are expected to exceed 1.5 million vehicles at full production. But not all suppliers were up to the challenge.
“We had one or two suppliers that had aspirations to be suppliers on the 900,” Andersson says. “We helped them, but one guy after a couple months, he couldn’t do it because he was losing so much money.”
A supplier with solid execution, however, stands to reap tremendous rewards from the GMT900 program, Andersson says.
“It’s very easy for us to attract the best people to the large truck program because it is so successful,” he says. “If you don’t make a lot of money on this program, you’re doing something wrong.”