Under Pressure

The cost of raw materials and OEM demands for higher-quality products at lower costs are among primary challenges faced by suppliers, a panel consisting of executives from Tier 1 and Tier 2 suppliers says.

Interior suppliers feel the heat even more than other component suppliers, executives say.

“OEMs, while understanding the economic state of the industry, are faced with discerning customers and competitors' excellent products,” says Joseph A. Bertucci, global engineering manager-cockpits and interior systems for Delphi Corp.

“Consequently, they are demanding even greater performance from their already challenged interior suppliers. OEM's fit-and-finish requirements are stretching conventional technologies to the limit,” he says.

Being under the gun is nothing new for suppliers, but the amount of pressure from auto makers today is unprecedented, the panelists say.

Having a global footprint is essential if interior suppliers are to remain competitive, and profitable, says Albert Faraj, director-Customer Group for Visteon Corp.

“We are better able to face challenges in different regions because we have a balanced global footprint,” Faraj says.

A rapidly changing automotive landscape has left many suppliers facing bankruptcy or liquidation, causing a ripple effect throughout the industry and forcing many interior suppliers to rethink their business strategies.

“You won't find our strategy to be terribly brilliant,” Faurecia North America President Jim Orchard says. “But in the face of what chaos we've had, we're only focusing on four simple points: innovation and design; features and new materials; manufacturing technologies and perceived quality to our buyers.

“We believe excellent program management, global development and excellent execution of the program is another,” he adds.