Quality Magazine

Working Relations Improving Among Domestic Automakers and Suppliers

May 24, 2011

DETROIT,MI-According to the 11th annual study of working relations between the six North American automakers and their suppliers, the U.S. Big Three auto-makers: Ford, Chrysler and General Motors-continue to show steady improvement, and the Big Three Japanese automakers: Honda, Toyota and Nissan-continue to slip.

The 2011 North American OEM Tier One Supplier Working Relations Study, conducted annually by Planning Perspectives (Birmingham, MI), tracks supplier perceptions of working relations with automaker customers in which original equipment manufacturers (OEMs) are ranked across the six major purchasing groups broken down into 14 commodity areas. The results of the study are used to calculate the Working Relations Index (WRI) based on 17 working relations variables. This year, 451 suppliers participated, representing 63% of the six automakers' annual buy.

Ford continues to lead the U.S. automakers in having the best relations with its suppliers staying in third place overall, while GM and Chrysler continue to improve. Chrysler, while remaining in last place, has had its second straight year of significant improvement. Among the Japanese automakers, Honda, which was in first place overall for the last two years, has continued to drop and has slipped to second place behind Toyota which appears to have bottomed out, while Nissan remains stuck in neutral in fourth place.

Comparing the six U.S. and Japanese automakers overall, Toyota is in first place, followed by Honda, Ford, Nissan, GM and Chrysler.

This year, 540 sales persons from 415 Tier 1 suppliers-representing 1,984 buying situations and 63% of the OEMs' annual buy-responded to the survey. Demographically, the supplier-respondents represent 37 of the Top 50 North American suppliers, 63 of the Top 100 and 80 of the Top 150 North American suppliers. The study culminates in the Working Relations Index (WRI) which is a quantitative ranking by suppliers of their working relations with each of the six OEMs.