The Great Warranty Debate

It makes perfect sense, and it should be simple enough: If a supplier's part breaks down on a vehicle, the supplier shares in the cost and the headaches of making things right.

Not so fast, bub.

Just how do we know it's the supplier's fault? Couldn't a defective part upstream be causing the problems with the component? And who designed the part, the supplier or the customer?

These are the questions WAW survey respondents wrestle as the great warranty debate grips the industry. It was sparked last year by General Motors Corp. purchasing chief Harold Kutner, who said suppliers need to be more accountable.

Our survey finds a sizable difference of opinion: Some 85% of automaker respondents support the concept, compared with 50% for supplier respondents.

"Suppliers must be responsible for their products," writes an industrial engineer at Ford Motor Co.'s Woodhaven Stamping plant in Trenton, MI.

"As long as the problem has been clearly investigated and responsibility assigned fairly," writes a body assembly engineer at Nissan Motor Mfg. Corp.

"This should make suppliers more aware of their product," writes Donald Soulard, a Chrysler Corp. product engineer.

"They (suppliers) make money on the replacement parts. Why not?" writes Mark Martin, a supplier manager at Saturn Corp. in Spring Hill, TN.

Several supplier respondents say they cannot shoulder more warranty costs if they are not granted full participation in design.

"This will crush small suppliers," writes a supplier quality assurance manager. "Huge customers find it easy to twist 'facts' in their favor," writes a vice president of sales at an Ohio supplier.

Still, some suppliers support the idea.

"It's OK when it's our design, but not when it's the OE design," writes a manufacturing engineer at Borg-Warner Automotive.

"Automakers must allow suppliers (the) opportunity to evaluate 'defective' product," writes an employee in product development at Federal-Mogul Corp.

"If quality is No.1, why worry?" another respondent asks.

Do you anticipate that the Year 2000 problem, a glitch that threatens thousands of computer systems, will disrupt your company's ability to provide products or services?