US supplier Tenneco says European automakers want it to do more than simply build corner modules.
Increasingly, they also want Tenneco to validate design, integrate production and manage Tier 2 suppliers.
Most of Tenneco's suspension-business customers in Europe - including Ford, Nissan, PSA/ Peugeot-Citroen and Volvo - want those extra services, said Josep Fornos, Tenneco Automotive Europe's general manager of original-equipment ride control.
Tenneco's experience comes amid recent industry debate about how much responsibility automakers should hand over to suppliers. Several automaker executives have recently said the benefits of outsourcing are lower than expected and they are concerned about losing core engineering knowledge. Suppliers continue to worry that automakers are simply transferring risk to suppliers. In addition, shadow engineering - parallel engineering performed by automakers as a check on suppliers' work - can increase supplier costs.
Fornos said that early module contracts in the mid-1990s covered what he calls level-one corner modules.
Previous Tenneco contracts, such as the Seat Ibiza, the NedCar plant in the Netherlands and Nissan in Spain, called only for assembling modules and delivering them in sequence.
Increasingly automakers want level-two modules, where the supplier handles supply-base management, Fornos said. There is also a growing demand for level three, where the supplier designs the module, integrates production and validates the design, he added.
Tenneco has worked on level-three module deals for the Ford Fiesta and Fusion and is currently involved in a future Ford Focus replacement, although for these projects another supplier handles assembly and sequencing of the module.
Tenneco is also developing corner modules for the new Volkswagen T5 van and a replacement for the Nissan Terrano sport-utility to be assembled in Barcelona, Spain.
Fornos said the level of outsourcing depends partly on an automaker's trust in the supplier.
"Delegating does not mean that they just close their eyes," he said. "They delegate responsibility but they always watch what you do."
But he said shadow engineering is not a problem for Tenneco.
"When you have built confidence with the customer, it does not happen anymore," Fornos said. "They have seen your validation equipment, your simulation equipment, they know your people and how competent they are, and then it is easier."
Fornos said Tenneco has upgraded its testing capabilities over the last three or four years, and has developed unique testing systems and simulation facilities.
Tenneco Automotive Europe is headquartered in Brussels and has 9,000 employees. It is a unit of Tenneco Automotive in Lake Forest, Illinois, USA.