Toyota Squeezes Supplier… For Chevy

toyota squeezes supplier 8230 for chevy

Though Chrysler gets special attention from us for its supplier-gouging, the practice of sticking parts makers with cost increases is basically an industry standard. As further evidenced by a Bloomberg report that bankrupt supplier BHM is filing to be released from an unfair (it claims) contract with ToMoCo subsidiary Toyota Boshoku. BHM sells vehicle seat-frame components to Toyota Boshoku, which has refused to increase payments in line with an 80 percent rise in steel costs this year. “The supply contract is so unprofitable that the debtors’ continued performance on the current terms cannot be justified,” says BHM in its bankruptcy court filing. The firm had requested a new pricing schedule in June, which Toyota Boshoku has rejected. Interestingly, Boshoku may be facing pricing pressure of its own. BHM components go into vehicle seat frames that Toyota Boshoku manufactures for Chevrolet’s HHR hatchback. GM has not commented on the case, but the facts prove two imutable truths about the industry. First, that everything and everyone in the biz is connected, and second that every OEM would just as soon see suppliers go under as raise their own costs. Be they Chrysler, GM or Toyota.

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  • Landcrusher Landcrusher on Sep 10, 2008

    monkey, The idea may have been taken, but not by these bozos. If you agree to a contract, and then can't fulfill it, you may have to go bankrupt to get out of it. Nothing new there. What surprises me is that someone was stupid enough to capitalize a business that would agree to terms like these without an out or a hedge of any kind.

  • Landcrusher Landcrusher on Sep 10, 2008

    What I want to know is how the folks running the vendor could be so stupid as to get into this contract without any protection against a rise in a basic commodity. I would be happy to turn a lawyer loose on the CEO if I owned part of the company.

  • Adub Adub on Sep 10, 2008

    Some companies are run by morons and many lawyers are also stupid. Still, Toyota's CEO (back when he was appointed) stated that his goal was to slash supplier costs by something like $7 Billion. My best friend is an engineer at GM and he said that in testing of new Toyota products they are seeing crap they have never seen before. For example, the hardware on the new Tundra has been rusting at incredible rates. I've seen it in their interiors, but according to my friend (and the plummeting CR reliability scores), Toyota has cheaped out too far.

  • on Sep 10, 2008

    "This statement should be obvious,(to even Stevie Wonder)," Stevie Wonder is blind...not deaf. He can comprehend just fine.

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