TRAVERSE CITY, Mich. -- Many auto suppliers are taking on extra engineering and design duties because they want to, not because their customers are demanding it, according to a new survey from the Center for Automotive Research.
Those who answered the survey also strongly believe that it is best to grow from within rather than via mergers and acquisitions.
But once a company pulls the trigger on a merger, organization issues and information technology systems are the hardest to integrate, said Daron Gifford, vice president of automotive for Gedas USAs Rochester Hills, Mich., office. Gedas, an information technology supplier, sponsored the survey.
Preliminary results of the study were released Wednesday at the Management Briefing Seminars. The results are based on surveys from 35 suppliers with North American annual sales of more than $250 million.
Sixty-three percent of the respondents said it was their decision to take on more engineering while, while 33 percent said customers were driving them to add more capabilities.
Outsourcing, another key issue among suppliers, was not a critical factor in long-term success, according to the survey.
But when companies do outsource product design work, 83 percent of it is sent to overseas firm, the survey found. That area, by far, was cited as the largest amount of work sent overseas.
In contrast, only 9 percent of outsourced information technology work was sent outside North America.
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