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Survey: German suppliers' relationship with OEMs worsens

Bamberg. German automotive suppliers feel their relationship with their main customers has deteriorated over the past two years, though they also cite more cooperation in some areas.

According to the latest edition of the Supplier Satisfaction Index (SSI), suppliers feel that auto companies have been making more use of their power over them in the past two years. This makes it impossible for suppliers to adapt their prices to the increased manufacturing costs.

Communication between OEMs and their suppliers is "not at its best," said Wolfgang Meinig, director of the Forschungsstelle für Automobilwirtschaft (FAW), the Bamberg-based Research Center for the Automotive Industry, which carried out the survey.

About 1,000 suppliers took part in the 64-question study of their relationship with carmakers Audi, BMW, DaimlerChrysler, Ford, Opel, Porsche and Volkswagen.

The purchase of components over the internet also increases the pressure on suppliers and those questioned expressed above-average dissatisfaction with carmakers' purchasing habits. By using purchasing platforms, manufacturers increase the "price competition," a method criticized by all suppliers.

In the survey, suppliers complained that their efforts in the field of environmental protection went unrecognized and they expressed anxiety over several automakers' slow payments.

The development partners wish to be informed more often and more regularly about long-term projects to enable more accurate planning. Many of the suppliers also feel that no support is given in times of crisis. An example of this would be recall campaigns.

There were some bright spots in the survey, among them, a high satisfaction rate with car manufacturers' technical competence. Also, many OEMs now allow suppliers to service other customers. Many companies show much more cooperation and seem more prepared to discuss the location of suppliers in the vicinity of the plant than in the past. In addition, suppliers are more satisfied with the lead time they are given than they were in 2001.

In suppliers' rankings of the German automakers, BMW came first. They praised the company for its high technical competence as well as continuity of personnel. FAW's Meinig believes that this is an indication that the company allows for an increase in the complexity of vehicle technology by setting up a group of highly qualified engineers.

Porsche came second because of the freedom it allows its partners. Meinig believes that the slight decrease of suppliers' satisfaction with Porsche's technical competence since 1998 is an indicator that the manufacturer suffers as a result of a scarcity of engineers on the labor market.

Technical competence and continuity regarding personnel are also above average with DaimlerChrysler. However, suppliers are less satisfied with DaimlerChrysler's way of honoring their engineering achievements.

Audi's rating jumped to number four in the ranking. Suppliers cited the company's technical competence, but were unhappy with its lack of flexibility regarding price adjustments.

VW, in fifth place, impressed suppliers with its generous lead times, but it was given unsatisfactory marks for honoring achievements.

Number six Opel was criticized for inflexibility regarding pricing and the high pressure it put on prices, while Ford came last in the ranking amid criticism over price agreements. "As the level of satisfaction in regard to compliance with terms of payment is extremely low, one can assume that paying morale at Ford has decreased," said Meinig.

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