• Suppliers to OEMs: We Think We're Turning Japanese
  • June 10, 2014 | Author: Jeffrey A. Soble
  • Law Firm: Foley & Lardner LLP - Chicago Office
  • The 2014 Annual Automotive OEM-Supplier Relations Study came out in May 2014 and it showed that Japanese OEMs may be rebounding after a couple down years when it comes to their relationships with suppliers. The study, published by Planning Perspectives, Inc. (PPI) relies on the Supplier Working Relations Index®. Up until 2011, Japanese OEMs held a healthy advantage with their suppliers. However, 2011-2013 saw that advantage start to vanish, almost completely. The most recent study suggests that Japanese OEMs may have regained their footing with Toyota, Honda and Nissan finishing first, second and third respectively. German OEMs did just as badly as those here in the United States.

    Why does it matter? According to PPI, these relationships have “directly correlated to [an OEM's] profitability and competitiveness.” It can also lead to suppliers providing their “newest technology” and “best pricing” to the OEMs with whom they have the best relationships. Suppliers, not surprisingly put their best resources and best people on the relationships that they value the most.

    Some other results include:

    • GM moved back into the “Poor to Very Poor” range thanks to a dip from 2013. The dip stemmed mostly from less trust from GM’s suppliers.

    • Nissan was the only OEM to improve in every aspect of the survey.
    • Chrysler also fell back into the “Poor to Very Poor” range as it dropped in the ratings for the first time in six years.
    • Toyota improved for the first time in seven years, apparently regaining its footing.