GENEVA - Siegfried Wolf edges closer to the screen. He's watching a real nail-biter among great competitors in a crucial game in which he is one of the participants.
Wolf is bidding online for a huge contract to supply elaborate cockpit modules, a competition that will take less time than the average American football game.
The scenario still is a vision for the president of Magna Europe but one he is convinced will become real.
Wolf's view represents one extreme in the aftermath of the Feb. 25 announcement of the word's largest online purchasing exchange created by General Motors, DaimlerChrysler and Ford Motor Co. Wolf believes complex systems of automotive parts, such as cockpits, will someday be secured online.
Others see online procurement being limited to commodities and simple components.
In general, automakers and suppliers have wildly different expectations for Internet-based reverse auctions in the purchasing of production parts. So far, the global parts exchange concept created by GM, Ford and DaimlerChrysler is just that - a concept. There is no proposed headquarters, operating rules or staff for the union.
But one aspect is clear: Its intention is to reduce component costs. DaimlerChrysler Chairman Juergen Schrempp said last week online purchasing could someday save as much as $1,000 per vehicle.
Such figures have alarmed some parts makers. A purchasing executive at one Michigan-based electronics supplier, who asked not to be identified, went so far as to say it could simply be a ruse to scare suppliers into cutting costs.
While the three automakers blast forward with their combined trade exchange aimed at hundreds of billions of dollars of purchases of production parts, other automakers foresee Internet purchasing in their own ways.
'No, no, no, no, no,' said Wolfgang Ziebart, board member for product development at BMW AG. 'For us, we will never do any auctions for parts that we deliver to our customers.'
NO TIRE BIDS
Ziebart and BMW purchasing chief Wilhelm Becker, interviewed at last week's Geneva auto show, said BMW could use auctions for nonproduction, consumable commodities. But they said BMW would not use the auction for tires, as Ford Motor Co. already has.
'I don't see it for engineered products,' Becker said.
'Not even steel,' said Ziebart, who will be in Detroit this week as general chairman of the SAE 2000 World Congress. Steel comes with too much variability in surfaces to leave the purchase up to an auction, he said.
Mark Mahoney, president of Ambrake Corp., the Elizabethtown, Ky., brake supplier to Ford, GM and DaimlerChrysler vehicles, said: 'We're very interested in seeing how this will all work. It's our understanding that they will first focus on more commodity-like items - off-the-shelf parts. It will be a little more difficult to get up to the more highly engineered systems like our products. We're certain to be impacted. We just don't know how yet.'
Bob Lutz, CEO of battery maker Exide Corp. of Reading, Pa., said the prospect of a single Internet marketplace reordering the automotive industry is overblown.
The former Chrysler Corp. president said the automakers might be able to shop online for commodity items such as batteries or brake pads. 'But the OEMs like to work with giant suppliers such as Lear or Dana, so the amount of shopping they can do is limited to the big systems suppliers,' he said.
Lutz said an open auction process with different parts up for bid every six months would mean reopening contracts. 'The industry would give up everything it has gained through cooperation. It will bring us back to price only, and then you can forget about quality,' he said.
Eric Goldstein, an analyst with Bear, Stearns & Co. Inc. of New York, sees risks if automakers' online purchasing efforts focus narrowly on cost.
Said Goldstein: 'Often times these savings mean sourcing the supplier with the lowest technology, lowest quality and an unstable balance sheet.'
Peter Brown, Richard Johnson, Lindsay Chappell and Robert Sherefkin contributed to this report