DETROIT - Johnson Controls Inc. expects to have fewer than 100 first-tier suppliers by 2000 - down sharply from 200 today.
The $6.3 billion seat maker is changing for the same reason automakers are: A small group of suppliers is easier to manage.
'We've been doing this for the last couple of years,' said Vice President Charles McClure, who noted that JCI had 800 suppliers in 1994. 'As the automakers ask us to do more, we are asking our suppliers to take on a lot of that.'
In recent years, the Big 3 have been downsizing the number of first-tier suppliers, preferring to do business with larger companies that can engineer their own components.
As one of the world's largest seat makers, Johnson Controls has profited from this trend, buying smaller suppliers and expanding its product line. JCI now can design an entire vehicle interior.
Surviving suppliers are getting long-term contracts from Johnson Controls. The others are moving down the chain, learning to do business with other suppliers that still sell parts to Johnson Controls.
'We try to be very open with them,' McClure said. 'We tell our suppliers what we expect.'
McClure made his comments at a seminar in Dearborn, Mich., last week sponsored by the Automotive Industry Action Group.