"Collaboration" was the word used most often during the annual Management Briefing Seminars in Traverse City, Mich., two weeks ago.
Supplier executives took turns telling their automaker customers - primarily the Big 3 - that a more collaborative relationship is imperative if suppliers and automakers are to survive and thrive.
The speeches had a familiar ring. The call for greater collaboration, like a tent, is unpacked and aired out for the annual summer trip and then packed away and forgotten for another year while it's business as usual in the purchasing office.
From the suppliers' standpoint, the Big 3's definition of collaboration means finding new ways to squeeze costs even more, in order to support the hefty incentives that keep assembly plants running.
As TRW Automotive CEO John Plant pointed out, that squeeze is taking its toll. Two-thirds of the technological innovations in vehicles come from suppliers, Plant said. But without an adequate profit margin, suppliers can't invest in research and development and won't attract interest from investors to fund growth, he warned.
Also hammered home in Traverse City were the benefits of collaboration: Nissan's rapid startup of the Canton, Miss., assembly plant that will launch five vehicle lines within a year, and Toyota's system to make it faster and easier for dealers and customers to custom-order vehicles.
Products and innovation are the key weapons for the Big 3 in their battle for market share, not $4,000 rebates. The Big 3 need allies in that battle, and they must treat their suppliers as such.
