BRUSSELS - Suppliers must be big enough and global enough to serve the global carmakers, top purchasing executives say. They also say suppliers must remain innovative and flexible, which are usually attributes of smaller companies.
What does it mean?
'It's business as usual,' said Ronald Hutchings, president of S&H Fabricating and Engineering in Fort Lauderdale, Fla.
Hutchings was one of six S&H employees who attended the Automotive News Europe Congress here June 9-10. His company supplies General Motors worldwide with air conditioning units.
The heads of purchasing for GM Europe, BMW AG, Volvo Car Corp. and Mercedes-Benz AG addressed the 300 attendees, and expressed similar views.
Bo Anderson, vice president of supply for GM Europe, wants global suppliers who can work locally.
Suppliers who can set up operations worldwide are especially attractive to GM Europe because GM International Operations is using Opel products and methods in South America and Asia, Anderson said.
The next step is a global General Motors, in which GM Europe and GM North American Operations become a single unit, sourcing together. While North America now represents 64 percent of GM's business, it will be just 40 percent in 10 years, Anderson said.
Wilhelm Becker, vice president of procurement for BMW AG, said BMW wants high-grade components and suppliers that can be flexible and can respond to BMW's need to individualize cars.
BMW also is looking for modular suppliers.
Becker said BMW works with both core suppliers and concept suppliers. Core suppliers develop modules. Concept suppliers are companies like 3M, with an idea for a mirror feature that uses 3M material.
Christer Palm, vice president of strategic sourcing and purchasing for Volvo, said Volvo also likes modules. 'I am great believer that modules drive down costs,' Palm said.
Johannes Rudnitzki, vice president of purchasing for Mercedes-Benz AG, said suppliers must follow Mercedes into new markets, and must be involved early in the process.
Said Rudnitzki: 'We need to be part of a common undertaking and have a common goal: the car itself.'