Visteon Corp. and purchasing chief Jonathan Maples did the right thing by backing off the pay-to-play plan that was intended to cut costs and winnow Visteon's supply base.
The continent's second-largest automotive supplier has been seeking a collaborative approach to cost cutting with its own suppliers. So it was puzzling that Maples would allow such a heavy-handed approach to reach the bid proposal stage. He was a colleague of Tom Stallkamp during Chrysler Corp.'s collaborative, highly regarded Supplier Cost Reduction Effort (SCORE) program.
If Visteon wanted to know what suppliers would think of a pay-to-play approach, the company had only to invite some in for a conversation.
Instead, Visteon mailed letters to plastic injection molders seeking proposals, with a near mandate for a first-year giveback of nearly 10 percent of the value of the contract. A storm of protest ensued.
Tier 1 suppliers are under intense pressure to cut costs because automakers are under intense pressure to cut costs. There are many strategies to accomplish this goal, none of them painless.
Delphi Corp., Visteon's chief competitor, has taken a page from the Japanese automakers' handbook and put lean manufacturing guru Dave Nelson in charge of purchasing. He plans to cut costs by spreading the lean gospel throughout Delphi's supply chain. The broader goal: Help Delphi thrive, not just survive.
Visteon must consider its choices carefully. But the fact that it has listened to its critics, admitted a mistake, and moved in another direction is, indeed, a step ahead.