By on May 14, 2013

Carmaking is a cyclical business. In crisis times, it’s “we are all in this together.” When business improves, relations between automakers and their suppliers revert to the old arrogance, to hurry up, make more for less. It’s that time again.

A study conducted by Planning Perspectives Inc. shows that “recent improvements in rapport between automakers and their supply base stalled this year, with suppliers complaining about lack of communication, last-minute engineering changes and inconsistency in management.” This according to Reuters.

Automakers are pushing suppliers to increase production to meet higher-than-expected new vehicle demand, however, “Most of the suppliers are finding it very difficult to increase production to meet the needs of the OEMs,” PPI President John Henke told Reuters. “They haven’t forgotten what they went through, so they’re much more prudent, much more cautious than the OEMs.”

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6 Comments on “As Business Improves, Supplier Relations Sour...”

  • avatar

    It’s not cyclical…it’s a bubble.

    • 0 avatar

      In the long term, it is cyclical – things will eventually get so bad that vertical integration will once-again become popular (as it did a century ago in the auto industry, for the same reasons) so that automakers will regain control of their supply chains.

      There is nothing new under the sun.

    • 0 avatar
      schmitt trigger

      Having worked for auto parts suppliers twice already, I definitively can say it is a bubble. When it bursts, -and eventually it always does- it is bad for automakers, but it is absolutely devastating for Tier 1 and Tier 2 suppliers.

      Layoffs become mandatory, sometimes exceeding 3/4 of the workforce. No one is spared, union, salaried, lower management. Well, directors are spared, and may even have bonuses awarded because of their cost-cutting “efforts”.

  • avatar

    Much could also be attributed to personnel changes at the OEMs. The newbies may think they can bully the suppliers simply becauce of their employer’s name and clout.

    Good business is still based upon good relationships.

  • avatar

    I am receiving the contact form submissions for The Truth About Cars website. I developed the original Truth About Cars website back in 2004 in working with the owner/editor at the time, Robert Farago. I also did work on the site after it was purchased by Name Media from Robert. I’m not sure how I ended up being on the recipient list for the contact form again, but you may want to look into that. Emails are being sent to:

    ben @ redwing studio . com

    Best regards,
    Ben Huddleston

  • avatar

    MBA’s doing the only thing MBA’s know how to do: Increase the bottom line by cutting “waste”. And by waste they mean any profit for suppliers, and a living wage for the hourly workers.

    Eventually, when the victims of these business school geniuses are backed into a wall and begin pushing back, it’s the fault of unions, lazy welfare queens, and Kenyan communist usurpers. At that point they move on to their next trick of offshoring and demanding H1B visas.

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