The panelists' view: Like most other industries, automotive suppliers are scrambling to take advantage of the Internet. Companies such as Lear are using it to offer engineering expertise to customers in remote parts of the world. However, the CEOs were dubious about one Internet innovation: They didn't care for GM's program to let commodity suppliers bid against one another in online auctions for GM parts contracts.
GM has been holding online Internet auctions. GM asks vendors to bid to supply commodity parts such as fasteners and hoses, and the low bid wins the contract. Is this going to catch on? Do you think it's a good idea?
Muhlhauser: I've seen an early demonstration. It's nuts, bolts and fasteners. I have a personal view on this: Do you want to drive a car that was put together by the lowest bidder?
There are categories of commodities that it might make sense for. But there is a lot more science in supply-chain management than that technology represents.
From what I've seen, they achieved a 20 percent price reduction. But suppliers have to make money so they can continue to invest.
We actually have to make choices where to invest our money and which customers to serve. That's going to be the interesting paradox, how all this works out.
You don't sound too concerned. You don't think online parts auctions will go beyond fasteners?
Muhlhauser: No. I believe technology will be the true cost advantage in the next millennium. If you think you can win in the 21st century by buying fasteners more cheaply, I think you are kidding yourself. You should be doing that already.
Has the Internet affected your business? Or is it just another wire?
Way: We cannot afford to have engineering in every part of the world. So we have an interactive engineering system. If somebody in Thailand wants to access the current technology or find out who is our specialist on door hardware, they can get online together through the Internet.
Our data are protected. You have to have codes to get online. But our customers can get online, see a picture of (the Lear engineer), then call him and interact through video cameras on the computers. Every customer wants access to your best technology. We cannot afford to have a technical center in every little part of the world. That technology has certainly helped our company. The customer can participate on the local level. That is working very well for us.
The Web is getting to be more and more a part of our business, whether we like it or not.
Is the Internet changing the way you interact with investors?
Way: It is changing with investors. You have these electronic road shows, where you don't have as many one-on-one interviews.
We just did a bond offering. We had electronic road shows where they would get people from five or six different cities. And then you'd answer questions and they would videotape it.
And investors can get access to this through Bloomberg. Investors can hear the question and look you right in the eye. They want to hear your inflection as you answer questions.
It worked pretty well.