Nothing in the auto industry is cast in stone. Not even the vaunted relationships between the New American Manufacturers and their traditional Asian or European suppliers.
With Japanese, German and Korean automakers expanding aggressively in North America, change is popping around the industry. The automakers are embracing new suppliers with little apparent regard for their national origins. They are adjusting purchasing arrangements to introduce new manufacturers into their supply chains. They are redefining parts and modules in ways that require traditional suppliers to manufacture in new ways. And just like their Big 3 competitors, they are feeling the heat of competition and looking for new ways to cut costs, speed up programs and tighten up quality.
The shift is not a wholesale abandonment of supplier relationships that have worked well in the past. Supplier relations at the North American operations of Toyota, Honda and Nissan are the envy of automakers around the world.
But what is now happening is a stirring of the supplier pot. The non-Big 3 automakers are currently executing 16 major factory and new vehicle programs in North America. To handle the pace, in some cases the automakers are bringing in new suppliers, and in other cases asking existing suppliers to try new things.
This trend will accelerate over the next few years as the transplants put more models into North American production, predicts Michael Flynn, director of the University of Michigan's Office for the Study of Automotive Transportation in Ann Arbor, Mich. Toyota Motor Corp. will have 11 models in production here in 2004, compared to six in 1994.
"There's a real potential in all this for North American suppliers," Flynn says. "We're seeing a critical mass of factories and models coming on stream from the transplants. They're starting to reach the point where they can re-evaluate their supply chains and say, we've done it this way all these years - maybe it makes sense to make some changes."
One example is Tower Automotive Inc. of Grand Rapids, Mich. Tower already supplies truck frame parts for the Frontier pickup and Xterra SUV to Nissan North America Inc.'s assembly plant in Smyrna, Tenn. Now, to facilitate a fast-paced entry into the full-sized pickup market, Nissan has bumped Tower up another notch.
Tower has just built a new truck frame plant in Madison, Miss., in sight of a newly constructed Nissan assembly plant down the road in Canton, Miss. Tower workers will fabricate pieces and weld them into completed frames that will be delivered in sequence with Nissan's own minute-by-minute production schedule.
"We see Nissan as a strategic customer for the future," declares Dave Valkanoff, business unit leader for the new Tower venture. "We've had a good relationship with Nissan, but this represents a new level of business for us."