After Japan's March 11 earthquake, Toyota acknowledged that it could not effectively monitor its network of second-, third- and fourth-tier suppliers. Does Delphi have the same problem?
We do. We've talked about it in our board meeting, and I had some discussions with the Automotive Industry Action Group. We also talked about it at the Institute for Supply Management.
Like Toyota, we have a pretty good understanding who our Tier 1 suppliers are. And we have a pretty good understanding of our raw-material suppliers. But when you've got to get parts from [lower-tier] suppliers, you lose visibility.
How do you fix that?
I don't have the answer yet. We are working on a number of things that are not in place yet that would improve the visibility of our suppliers. That's in progress, and it's in progress everywhere in the supply base.
Is that one of the auto industry's biggest issues?
It really is. There are a number of Tier 1 players that are much bigger than we are [that are trying to solve the same problem]. Some of their businesses are even more diversified, so you are going into different industries.
How many suppliers does Delphi have?
We have about 2,800 Tier 1 suppliers.
So if you count all vendors for your Tier 1 suppliers, Delphi could have tens of thousands of subsuppliers.
I'm sure. If you keep drilling, it's a massive industry with a lot of players that employ a lot of people. It's extremely complex.
Was Delphi's production disrupted by the earthquake?
From a manufacturing perspective, the answer is no. We were in the same boat as a number of other Tier 1 suppliers, particularly with our electronics portfolio. Like most suppliers, we worked with our customers [to find] alternative materials until our own suppliers were able to ship us their normal product portfolio.
Renesas, the world's top producer of computer chips, lost its big plant in Japan after the quake. Was Renesas a major supplier of Delphi's microrelays?
They were a key strategic supplier for us. Given everything they went through, they've done tremendously well supporting Delphi. We are very pleased with how they managed their business and supported their customers.