HAMILTON, Ontario - Trust us and prosper, says the purchasing director for an auto manufacturer.
The lack of trust between automakers and suppliers is ominous, says a top parts maker.
Those two views shared the same platform here last week. The voice from the supplier side: Joseph Gorman, TRW Inc. chairman. From the automaker side: Jonathan Maples, Chrysler Corp. executive director of supplier management.
They were keynote speakers at the annual meeting of Canada's Automotive Parts Manufacturers' Association.
And their comments, while not aimed at each other, show how far apart camps can be when discussing automaker-supplier partnership.
To sustain suppliers' confidence and cooperation, Chrysler must build relationships based on trust - and profits, Maples said.
'We do want to be your best customers,' Maples told suppliers. 'We want to create a system and process and products where we all succeed, not at the expense of each other but at the expense of the waste that's inherent in the way we do business.'
Gorman said the industry has a long way to go to achieve Chrysler's model of trust and cooperation.
EASE THE PRESSURE
He said he was 'gravely concerned' about the increasingly confrontational nature of some automaker-supplier relationships.
'I worry a lot about the direction that many (automakers) have taken in terms of the pressure that they are putting on the entire supply community,' said Gorman. His company ranks No. 8 on the Automotive News list of the biggest original equipment suppliers to North America.
Gorman, without identifying the automakers to which he was referring, said the problem results from an 'absence of shared values, the absence of mutual trust.' In some cases, suppliers are rooting for some automakers to fail, and rooting for others to succeed.
'What kind of environment is that?' Gorman asked. 'Not a healthy one.'
TRW's prescription for improving the automaker-supplier relationship: far fewer suppliers in the industry, earlier involvement, concurrent engineering, joint technology development, joint training, open communication and greater trust.
CUT THE WASTE
At the same time, suppliers must do a much better job of managing their procurement networks to eliminate waste, he added.
'The (vehicle manufacturers) have done a lot better job with first-tier suppliers than first-tier suppliers have done with their suppliers,' Gorman said. 'We've got to improve the chain of supply, all the way from raw materials to delivery to the customer.'
Maples said he appreciated Gorman's comments. He also said suppliers should hold Chrysler to its public pronouncements about how it manages its supply chain.
'It involves you coming back to us and challenging us when you see these barriers, when you see our behavior inconsistent with what we espouse,' he said. 'So that we can do a much better job of rectifying how we go about producing the products that we make because we are sincere in our efforts.'