DETROIT -- General Motors supplier relations improved under global purchasing chief Bo Andersson but would have made greater progress if the company hadnt faced such financial trouble, consultant John Henke Jr. said today.
In the last few years, he has been working very, very hard to improve them, and he has, said Henke, president of Planning Perspectives Inc. I know hes disappointed that they havent gotten better than they have.
Andersson is leaving GM to pursue other career interests, GM said today. The automaker filed for Chapter 11 bankruptcy protection on June 1 and is poised to emerge later this summer with about $50 billion in total U.S. government support.
Andersson has been credited with the way GM did business with its more than 3,000 suppliers around the world, making GMs purchasing system more accountable.
Henkes firm conducts annual studies of suppliers views of automakers, considering factors such as their willingness to help suppliers cut costs, pay suppliers for canceled programs and reward top suppliers with new business. When Andersson became executive-in-charge for worldwide purchasing in 1999, GM ranked last in suppliers opinions of major automakers.
The companys supplier-relations score in Henkes study kept declining, but it hit bottom in 2005. Then, Henke said, Andersson started to work on improving supplier relations, and the companys score rose.
Ford Motor Co., not GM, ranked last in 2007. And when Fords score improved, Chrysler LLC finished last on the list in 2008 and this year.
Still, Henke said, the automakers financial troubles brought Andersson under pressure, which hindered his reforms. In this years study, even after improvement from last year, 41 percent of suppliers said theyd rather not do business with GM or were ambivalent about doing so.
When a company is in deep financial difficulties, top-level management really looks at purchasing as a way to cut costs, Henke said.
Other executives would say, Keep the pressure on the suppliers. Get your cost down, get your cost down, get your cost down, Henke said. Trying to improve relationships with suppliers under those conditions is difficult.
Still, Andersson has proved so talented as a purchasing chief that Henke said he thinks Anderssons next job will be in that line of work.
And if the proposed new majority owner of GM, the U.S. government, decides not to influence the automakers choice for Anderssons replacement, GM would do well to fill the position internally, Henke said.
They know the system, Henke said of potential internal replacements. Theyll be able to be more effective quicker.
Whatever GMs choice, purchasing will be more important within the bankrupt automaker than ever before, Henke said.
With competition being as great as it is, theyre going to be depending on suppliers as never before, he said. The better the relations, the more the suppliers do for you, and theyre going to need it.