By on May 13, 2014

GM Renaissance Center TRON Version

Already dealing with a perception-is-reality problem over its ongoing product recall crisis, General Motors now has a new perception problem: Tier 1 suppliers find the automaker to be the worst automaker in the United States when it comes to their relationships with the company.

Reuters reports in a survey conducted by automotive consultant group Planning Perspectives, the industry’s largest suppliers were asked to rate their relationships with the six automakers responsible for over 85 percent of all light vehicle sales within the United States, grading on key points including trustworthiness, communication and intellectutal property protection. GM scored poorly among Tier 1 companies, resulting in a last-place finish behind Fiat Chrysler Automobiles, who had held dead last from 2008 to last year.

Taking the podium, Toyota and Honda came in first and second respectively, while Nissan knocked Ford out of third. According to Planning Perspectives head John Henke, the Japanese podium sweep could be seen as a sign that supplier relations with the Detroit Three may be waning, especially as the Japan Three are becoming seen in a better light among the Tier 1 suppliers.

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25 Comments on “Survey: GM Worst In Its Relationships With Tier 1 Suppliers...”


  • avatar
    carveman

    Government Motors.

    • 0 avatar
      psarhjinian

      Cute.

      Of course, GM was doing this “screw the suppliers” thing for _decades_ before they were under government supervision, and their supplier relationships actually improved under Uncle Sam and Captain Canuck’s stewardship.

      It is a worrisome sign, though. Squeezing suppliers is a portent of doom, quality-wise. The other would be a dramatic curtailment of warranty performance: if GM goes back to nickel-and-diming customers and dealers on warranty work, we’re back to awesome days of J . Ignacio Lopez.

      • 0 avatar
        geeber

        The problem is that GM is still receiving raspberries from suppliers after the bailout and bankruptcy that were also supposed to change the culture of the company. Unfortunately, there appears to be quite a bit of the old GM in the new GM.

        • 0 avatar
          psarhjinian

          The bankruptcy and government stewardship did some good—it finally saw the turfing of GM’s incompetent board of directors and much of it’s senior management—but you’re likely right that a lot of middle managers and rank-and-file stayed on, despite the bad habits they picked up in the years prior.

          My understanding is that GM improved supplier relations post-BK (albeit not much) and then backslid.

    • 0 avatar
      mikey

      ” Government Motors” ? Such quick, and cutting wit, how impressive!

  • avatar
    Lie2me

    My father was head of a “tier 1″ supplier for GM. Long since retired he still talks about the corruption and kickbacks he had to endure to to maintain “tier 1″ status. Being “tier 1″ had nothing to do with the quality of your product

    • 0 avatar
      cdotson

      No, “tier 1″ has nothing to do with quality. A “tier 1″ supplier directly supplies components to an OEM manufacturer. A company who supplies a Tier 1 company, without supplying the OEM directly, is a “Tier 2″ supplier.

      It’s degrees of separation. Granted one would think if your product is questionable or you’re a PITA to deal with you’ll be likely to get bumped out of the inner circles, but as per your comment that doesn’t always happen.

      • 0 avatar
        danio3834

        Knowing a lot of people in the supplier biz, I’m sure he’s nudging at how many suppliers are pushed to the edge of existence in this cut-throat business environment. Quality is supposed to be the given, it’s about who can deliver that the cheapest. Of course when the lowest bidder wins, quality isn’t necessarily a given.

  • avatar
    Volt 230

    Will these guys ever learn from past mistakes?

    • 0 avatar
      Lie2me

      Oh, they’ve learned… learned how to be more discrete, learned how to cover their tracks better, learned how to blow more smoke up more butts and when caught, learned the fine art of throwing their coworkers under the bus

  • avatar
    Pig_Iron

    plus ça change, plus c’est la même chose …

  • avatar
    DougD

    That’s unfortunate, because In the early 2000′s I worked for a Tier 1 supplier and we hated GM purchasing with a burning passion. Constant meddling, 90% payment on acceptance which would be delayed again and again.

    Daimler Chrysler was bad too, but you got the impression that they were facing tremendous pressure from above and were just trying to get the work done in spite.

    Honda was great, they would leave you alone to do the job.

    Hammering your suppliers works great for a while, but once you drive them all out of business you have a problem.

  • avatar
    mikey

    Yes and I’ve been on the receiving dock at GM when we have sent supplier trucks back. I remember several supplier, that we couldn’t unload until approved my bosses boss.

    Suppliers that would tell my boss they would be at the dock in fifteen minutes. 45 minutes later he is on my case “WTF are you doing Mikey? were putting the line down in five mins” ! “No truck boss”

    You would not believe some of the garbage that the suppliers would try and pawn off on us.

    There is two sides to every story. somewhere in between is the truth.

  • avatar
    mikey

    My thoughts? If a Tier 1 doesn’t like GM. Don’t let the door hit you on the way out.

    • 0 avatar
      DC Bruce

      Interesting perspective from an insider. Are you suggesting that Toyota/Honda accept garbage that GM turns back? I guess that’s possible, but, given the quality of their products that are made in North America, it seems unlikely.

      It may be that GM is just “bureaucratic.” To an outsider unaccustomed to it, “bureaucratic” is PITA to deal with.

      It’s kind of ironic that we’re reading this while at the same time reading about a crappy ignition cylinder that allows the car to be switched off under the weight of too many keys on the key ring.

    • 0 avatar
      psarhjinian

      That’s a really bad additude to have. You don’t want to piss off your suppliers because they’ll be forced to cut corners accordingly.

      That would include screwing around with delivery schedules so that they’re leaving with a fully-loaded truck, but it might also mean cutting back on QA, cost-cutting the design, using less costly assembly lines and more.

      Taking a “don’t let the door hit you on the way out” is a really good way to ensure that, when you send a part out for spec to your suppliers, no one will even try to design a good part for you. They know they can’t make money by making a quality part, and they’ll cut corners in advance.

      Which is _exactly what happened_ to the Big Three the last time.

      Honda and Toyota don’t jerk their suppliers around (they also don’t jerk their dealers and customers around on warranty claims, but that’s another story) and it’s reflected in the reliability of the end product.

    • 0 avatar
      Lie2me

      Tier 1 doesn’t have to like GM to do business with GM

  • avatar
    05lgt

    I don’t have insider perspective, so I have to ask; are all the big six’s “largest suppliers” suppliers to all 6? Some of the comments above seem to assume that’s the case, I just don’t know.

    • 0 avatar
      psarhjinian

      They can be. Any given supplier can supply any OEM.

      What’s really interesting is when you see captive suppliers (eg, a supplier owned by an OEM) who supplies other OEMs. That happens a lot: an example would be Aisin, who sells transmissions to damn-near everyone despite being a member of the Toyota family.

  • avatar
    redav

    I’m not a part of a Tier 1 supplier, but if their experience is anything like mine as a ‘Tier 1 consumer,’ I’m not surprised.

    I got a certificate in the mail for $50 to test drive a Chevy. “Great!” I thought, “I can spend an hour of my time checking out some Chevys.” Silly me. I stopped by one dealership, and not a single salesperson was interested in helping me. So I went to another dealership. They were eager to sell me something, but they didn’t know anything about cars, and seemingly less about Chevys. But I got my certificate info and then tried to redeem it through Chevy’s website. Unfortunately, either they didn’t give me the right code or the website was broken. I called the number Chevy listed, and it sent me down perpetual menus where none of the options were applicable.

    I wasn’t going to buy a Chevy anyway, so it’s not like either they or I really lost anything (besides my time). However, it’s just another negative experience, and now I’m not likely to even give them a chance to change my mind.


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