Ford Climbing Supplier Relations Ladder

The Relationship Between Suppliers and Nearly Every major North American auto maker is deteriorating, except for one: Ford Motor Co.

The latest study by Planning Perspectives Inc. shows the Working Relations Index falling for Toyota Motor Corp., Honda Motor Co. Ltd., Nissan Motor Co. Ltd., General Motors Corp. and Chrysler LLC.

PPI created the index and determines each OEM's score based on confidential interviews with suppliers. PPI surveyed executives at 284 Tier 1 suppliers, via the Internet, between April and June.

Components factoring into the Working Relations Index include trust, communication, prospects for profitability and OEMs' willingness to include suppliers in product development and to help a supplier reduce cost and improve quality.

For years, North American suppliers have consistently rated favorably Japanese transplants in the U.S. for their willingness to cultivate a positive relationship driven by product and process improvements, while Detroit auto makers have been slammed for focusing too heavily on price cuts.

In this eighth annual PPI study, Toyota, Honda and Nissan show for the first time significant declines in their index scores.

Toyota, which always has topped the index, scores a 367 out of 500 points, narrowly besting Honda's 359. Both scores place the two auto makers in the “good” category.

Nissan scores a 253, earning it a rating between “poor” and “adequate.”

Ford's score of 191 is its highest ranking ever, allowing it to significantly close the gap between Japanese and Detroit auto makers.

Among U.S. OEMs, only GM has scored higher in previous years, with a 218 in 2006 and 199 in 2007. GM's score this year fell to 163, while Chrysler dipped to 161.