General Motors CEO Dan Akerson is right. GM needs to forge lasting partnerships with its suppliers if it is to be a top-tier automaker. But that means working twice as hard to prove that the new, post-bankruptcy GM is chastened, contrite and determined to be a faithful partner.
Many of the issues that suppliers have with GM date back two decades to the Inaki Era in the early 1990s, when purchasing czar Inaki Lopez exerted undue pressure on suppliers to cut their prices. Lopez preached that he wanted a three-legged stool: quality, service and price.
But most suppliers believe they were treated shabbily, that GM shared their proprietary designs with competitors and that Lopez didn't care about anything except saving money for GM. The pain didn't go away when Lopez jumped ship and joined Volkswagen Group.
In the Bo Era from 2001-09, purchasing boss Bo Andersson emphasized quality and catching potential problems early enough in the product-development process to avoid costly recalls. Andersson worked with some key suppliers that needed help, and he was mindful that suppliers need to be profitable and stay healthy. Overall, relations improved somewhat.
But GM's years of multibillion dollar losses and ensuing demands for more cost reductions strained relations again.
According to a recent joint survey of North American suppliers by J.D. Power and Associates and Automotive News, GM was ranked ninth of 10 automakers by suppliers based on openness, trust, incentives, ease of work and implementation of solutions.
In the post-bankruptcy era of purchasing czar Bob Socia, GM seems to be trying. In 2009, the company told suppliers they could keep half of any savings from reducing the cost of parts. GM also has tried to speed internal decision making and give suppliers more reliable production forecasts.
It will take time, but it will be well worth it.