Automotive News - August 18, 2008 - (Page 12) 12 • AUGUST 18, 2008 opinion Kudos to Ford for improving supplier relations The sharp and surprising improvement in Ford Motor Co.’s supplier relations this year — as reported in an authoritative new survey — cuts against conventional wisdom. The general belief is that an automaker’s supplier satisfaction scores rise when business is booming and orders for components are steady or on the upswing. Nothing seems to dampen supplier trust more than an automaker that falls short of production targets. Price squeezes and more combative dealings are usually part of the package. Yet Ford has managed to mend relations with suppliers at a time when its production has been plunging. The company posted an 18 percent improvement in a survey conducted by industry consultant John Henke Jr. Ford was the only one of the six major automakers to show Ford has managed improvement in the annual review. to mend relations The sampling of 284 Tier 1 suppliers was done between mid-April and mid-June. Carmakers were meawith suppliers sured in such areas as pressure to at a time when reduce prices and improve quality, profit opportunities and the ability its production has to recover material cost increases. How did Ford do it? And are there been plunging. lessons to be learned? One thing should be clear. It took more than steady sales growth at Toyota Motor Corp., Honda Motor Co. and BMW to put those companies at the top of supplier satisfaction polls. The collaborative and evenhanded approach they take is the key differentiator. Three years ago, Ford rolled out its Aligned Business Framework, a strategy to trim suppliers and work more closely with those that remain. It took a while for the program to get its bearings. Just last fall, another poll of suppliers suggested that relations with Ford remained confrontational. But things appear to have turned around. Henke credits Ford CEO Alan Mulally, acclaimed for his co-dependent dealings with suppliers while building airplanes at Boeing. After a hands-off approach to supply-chain management during his first year at Ford , Mulally seems to have become engaged. Having the right purchasing people in place also matters a lot. Suppliers say the move of Paul Stokes, Ford’s popular head of European purchasing, to Ford’s U.S. headquarters late last year was a positive factor. It is crucial that suppliers feel they are treated fairly. At long last, the message of collaborative supplier relations from purchasing boss Tony Brown, Mulally and Stokes seems to have made its way down Ford’s management chain. Way back when, when Ed Cole was running General Motors, the buzz was vertical integration. Why let a supplier make the money when you could and should do it yourself? Before long, the situation in the United States will be just the opposite. Private-label car companies may be the next big thing. Chrysler is negotiating with Nissan to build some mid-sized cars. Chrysler is negotiating with Chery to buy some small cars from China. Who knows? Before too long, Chrysler might just do some engineering and perhaps a bit of design and let someone else build its vehicles. Chrysler would become a marketer rather than a manufacturer, sort of like Home Depot. It might seem far-fetched, but there have been companies that have been building vehicles for their automotive clients for decades. DAILY AUTO NEWS >> You can get the news you need every day. Go to www.autonews.com/signup and sign up for our daily e-mail newsletter. How do we define ‘automaker’? Does a car company have to build everything it sells? Today, more and more suppliers are engineering and manufacturing all sorts of parts for vehicles. Is there any part of an automobile that has to be manufactured by the company that makes the brand? It is probably important for Ferrari to build its own engines, but Pininfarina has been designing Ferraris and building many of them for decades. Porsche should do its own cars, but some of its cars have been built in Finland for years. Some have even been built in Eastern Europe. Many companies now buy transmissions from suppliers, and every vehicle maker has plenty of companies that will do its stampings. If you want assembly, even that can be arranged. Does a car company have to build everything it sells? So, maybe if you do a bit of design and engineering, you can save all that capital investment and let your suppliers build your vehicles. It has happened before and will happen again. And it may be a very good thing. The automobile business is changing rapidly. Sharing components such as engines is a start. But when you start sharing production plants — as General Motors and Toyota do with NUMMI — what does that tell you? If there are ways to reduce costs and give the customers what they want, should you stick to the old way? There will be plenty of new ways of doing things. Never a dull moment. clean title won’t alter the fact that anyone with access to a computer can find out a vehicle’s checkered past. Instead of calling for new legislation, Automotive News should be calling on Congress to ensure that the Department of Justice has the funding it needs to do the job right. ROSEMARY SHAHAN President Consumers for Auto Reliability and Safety Sacramento, Calif. Concept of leasing had been polluted To the Editor: Financial institutions are abandoning the sinking ship that is leasing. Surprise! Surprise! Surprise! At the first leasing training that I attended in 1968, the trainer assured us that within five years half of all cars would be leased. Since then I have heard that refrain on several occasions. It was never, is not now nor will it ever be true. I have cautioned the sales and financial representatives of several manufacturers during my career about the risk of fooling with the residuals in the hope that everything will come out right. When I began writing leases, they were full-service, including maintenance, tires and carwashes once a week. They were undertaken by high-income professionals so they could concentrate on doing what they do best. Leases were sold on the basis of the convenience and income-tax benefits. Regular consumers, of course, have no income-tax benefits. Most were openend leases so that the lessees had some skin in the game to take care of the cars like they were their own. The concept was polluted over the years to get people into cars with lower payments by stretching the terms out to as much as five years. There is a silver lining to the losses that financial institutions are facing in disposing of turned-in cars. Every dollar see LETTERS, Page 14 THE WEEKLY NEWSPAPER OF THE INDUSTRY Established in 1925, published every Monday by Crain Communications Inc. Totaled cars: We don’t need a new law To the Editor: The editorial “End vehicle title washing” (June 30) called for Congress to pass legislation to require insurance companies to disclose all total-loss vehicles. But Congress already passed that legislation in 1992. The Anti-Car Theft Act required the U.S. Department of Transportation to issue rules to require insurers to fork over the data on We invite letters from our readers. Please limit your letter to 250 words and tell us whether we may print it. We reserve the right to edit it. Include your name and title, the name of your company, your city and your state. Also include your telephone number or your e-mail address. E-mail letters to: autonews@crain.com Or send them to: Letters Automotive News 1155 Gratiot Ave. Detroit, MI 48207-2997 Keith E. Crain, Publisher and Editor-in-Chief Peter Brown, Associate Publisher and Editorial Director David Sedgwick, Editor Edward Lapham, Executive Editor HOW TO REACH US Web site: www.autonews.com Editorial staff autonews@crain.com Phone: 313-446-0361 Fax: 313-446-0383 Circulation Advertising subs@crain.com rgreer@crain.com Phone: 888-446-1422 Phone: 313-446-6050 Fax: 313-446-6777 Fax: 313-446-8030 Editorial data/research To locate information that has been published in Automotive News, call 313-446-1662. Customer service To start or renew a subscription or to report an address change or a delivery problem, e-mail subs@crain.com or call 888-446-1422 (in the U.S. or Canada) or 313-446-1662 (in all other locations). 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A new law would only slow things down. What we need is for the long-overdue rules to be issued and take effect. Then insurers, salvage pools and junkyards will have to report on totaled vehicles and provide updated data every 30 days. The existing law also requires that the data be made available to the public at cost. Once a vehicle is listed in the national database of totaled vehicles, the incentive to engage in title washing will greatly diminish. Even counterfeiting a http://www.autonews.com/signup http://www.autonews.com http://www.autonews.com
Table of Contents Feed for the Digital Edition of Automotive News - August 18, 2008 Automotive News - August 18, 2008 Smart answer: A tiny Hyundai from India Toyota idles factories — but can't lay anybody off Sharing the pain N. America: Brembo's big break? Ford adds 7 preferred suppliers; total rises to 65 Suit: Report of store's death is premature Lincoln crossover will get MKT nameplate Ligocki will head Mexican/Chinese car deal Industry tries lean lobbying at conventions Ford reins in F-150 order combinations Nissan will buy more in Mexico Leland, master of precision and luxury cars Honda will launch Prius fighter in April Porsche bolsters warranty on pre-owned vehicles CTS wagon arrives in spring GM: Aerodynamic design boosts Volt's range Denso is Chrysler 'Supplier of Choice' Kudos to Ford for improving supplier relations How do we define 'automaker'? Concept of leasing had been polluted Totaled cars: We don't need a new law Hybrids too quiet? Sounds like trouble Marketing tips for the 21st century Scion tries to get leg up when flexing its hip Scion ads show community of cool — but no owners July trucks sales fall; rate of decline slows Hargrove forecast: Good for now, bad for long term Mitsubishi plans plant to meet battery demand Mini Cooper D(iesel) delivers, but not here yet Logistics company's goal: Cut fuel use even more Transporter joins the cars it delivers in going green Saturn, Scion lost that special feeling Expert: CAFE debate irrelevant Chrysler plans unibody, fuel-efficient Grand Cherokee Panel: CAFE will change U.S. car mix Toyota revs up its aftermarket parts business Dealers Who's that sporting Brembos now? Moody's cuts GM rating Analyst Merkle moves Ford will sell stock BMW recalls 320,000 vehicles Intermet in Chapter 11 again GM adds 4 XFE models Delphi ends battery venture Chamco cases bounce around court system Mercedes sues Cobasys over batteries For a while, the party's over at Toyota Buy Hummer? Nyet, says Russian automaker What cars will be the cruisers of tomorrow? GM sets 'em up for Dems, GOP Chung sprung A good day at work: $22 million Automotive News - August 18, 2008 Automotive News - August 18, 2008 - (Page Intro) Automotive News - August 18, 2008 - Sharing the pain (Page 1) Automotive News - August 18, 2008 - Sharing the pain (Page 2) Automotive News - August 18, 2008 - Ligocki will head Mexican/Chinese car deal (Page 3) Automotive News - August 18, 2008 - Nissan will buy more in Mexico (Page 4) Automotive News - August 18, 2008 - Nissan will buy more in Mexico (Page 5) Automotive News - August 18, 2008 - CTS wagon arrives in spring (Page 6) Automotive News - August 18, 2008 - CTS wagon arrives in spring (Page 7) Automotive News - August 18, 2008 - Denso is Chrysler 'Supplier of Choice' (Page 8) Automotive News - August 18, 2008 - Denso is Chrysler 'Supplier of Choice' (Page 9) Automotive News - August 18, 2008 - Denso is Chrysler 'Supplier of Choice' (Page 10) Automotive News - August 18, 2008 - Denso is Chrysler 'Supplier of Choice' (Page 11) Automotive News - August 18, 2008 - Totaled cars: We don't need a new law (Page 12) Automotive News - August 18, 2008 - Totaled cars: We don't need a new law (Page 13) Automotive News - August 18, 2008 - Marketing tips for the 21st century (Page 14) Automotive News - August 18, 2008 - Marketing tips for the 21st century (Page 14a) Automotive News - August 18, 2008 - Marketing tips for the 21st century (Page 14b) Automotive News - August 18, 2008 - July trucks sales fall; rate of decline slows (Page 15) Automotive News - August 18, 2008 - Mitsubishi plans plant to meet battery demand (Page 16) Automotive News - August 18, 2008 - Mitsubishi plans plant to meet battery demand (Page 17) Automotive News - August 18, 2008 - Saturn, Scion lost that special feeling (Page 18) Automotive News - August 18, 2008 - Saturn, Scion lost that special feeling (Page 19) Automotive News - August 18, 2008 - Saturn, Scion lost that special feeling (Page 20) Automotive News - August 18, 2008 - Saturn, Scion lost that special feeling (Page 21) Automotive News - August 18, 2008 - Chrysler plans unibody, fuel-efficient Grand Cherokee (Page 22) Automotive News - August 18, 2008 - Panel: CAFE will change U.S. car mix (Page 23) Automotive News - August 18, 2008 - Panel: CAFE will change U.S. car mix (Page 24) Automotive News - August 18, 2008 - Panel: CAFE will change U.S. car mix (Page 25) Automotive News - August 18, 2008 - Panel: CAFE will change U.S. car mix (Page 26) Automotive News - August 18, 2008 - Panel: CAFE will change U.S. car mix (Page 27) Automotive News - August 18, 2008 - Dealers (Page 28) Automotive News - August 18, 2008 - Who's that sporting Brembos now? (Page 29) Automotive News - August 18, 2008 - Delphi ends battery venture (Page 30) Automotive News - August 18, 2008 - Delphi ends battery venture (Page 31) Automotive News - August 18, 2008 - Mercedes sues Cobasys over batteries (Page 32) Automotive News - August 18, 2008 - Mercedes sues Cobasys over batteries (Page 33) Automotive News - August 18, 2008 - A good day at work: $22 million (Page 34) Automotive News - August 18, 2008 - A good day at work: $22 million (Page 35) Automotive News - August 18, 2008 - A good day at work: $22 million (Page 36)
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