Detroit, Michigan – The turmoil in the automotive industry has affected working relations with suppliers, according to the annual North American OEM-Tier 1 Supplier Working Relations Study, which noted the most significant shift since the study was launched eight years ago. The study tracks the supplier relations of the top three U.S. and top three Japanese automakers.
Honda took over the top spot held by Toyota since 2002, although both are ranked somewhat lower this year. Toyota, which for years has had the best supplier working relations of any company, has dropped steadily for the past two years.
Ford, which was rated as having the worst working relations with suppliers two years ago, has made dramatic and steady gains, and this year has the highest rating ever achieved by a U.S. automaker in the study. It is also closing in on Nissan, which is in third place.
Among the Japanese automakers, Honda is the most preferred foreign domestic customer, while Ford is the most preferred domestic automaker customer.
General Motors showed some improvement after a slight downturn last year, but remained well behind Ford. Chrysler was last in the study, virtually the same position it held last year. In 2006, it was the top-rated U.S. automaker in the study.
“We have been tracking supplier relations since 1992, during which time Toyota has been clearly the industry leader in supplier relations,” said John Henke Jr., president and CEO of Planning Perspectives, which conducts the study. “Toyota supplier relations have lost significant ground in the last two years and it has slipped out of first place in our study, a position it held since we started measuring the supplier working relations of the six automakers in 2002 with our Working Relations Index. Suppliers suggest a potential reason for this drop is a younger, less-experienced staff in Toyota’s purchasing group, for whom the ‘Toyota Way’ is not yet the way of doing things.
“With respect to Ford, two years ago the company transferred the head of European Purchasing to the U.S. to be head of Ford North America Purchasing,” Henke said. “The results have been a dramatic improvement in supplier working relations last year and this year.”
The study represents the suppliers’ rating of their working relations with each of the six major North American automotive OEMS, and consists of components that are the principal drivers of supplier working relations, including OEM communication with suppliers, OEM help given to suppliers to reduce costs, and the supplier’s profit opportunity at the OEM.