Autoblog http://www.autoblog.com Autoblog http://www.blogsmithmedia.com/www.autoblog.com/media/feedlogo.gif Autoblog http://www.autoblog.com en-us Copyright 2009 Weblogs, Inc. The contents of this feed are available for non-commercial use only. Blogsmith http://www.blogsmith.com/<![CDATA[Analyst: Detroit 3 to be outproduced by foreign transplants on U.S. soil by 2012]]>http://www.autoblog.com/2009/06/23/analyst-detroit-3-to-be-outproduced-by-foreign-transplants-on-u/http://www.autoblog.com/2009/06/23/analyst-detroit-3-to-be-outproduced-by-foreign-transplants-on-u/http://www.autoblog.com/2009/06/23/analyst-detroit-3-to-be-outproduced-by-foreign-transplants-on-u/#comments

If you think life can't get any worse for the bloodied and battered Detroit three automakers and their suppliers, you're wrong - at least according to a new study from Grant Thornton LLP's Corporate Advisory and Restructuring Service. The accounting and management consulting firm used data from CSM worldwide that forecasts U.S. automakers will produce fewer vehicles on U.S. soil than Asian and European automakers by the year 2012 despite an expected return to profitability.

Included in these projections are a 35% reduction in U.S. manufacturing by domestic automakers and a 20% increase from import automakers like Volkswagen, BMW, Toyota, Honda, Nissan and Hyundai. The end result would be a total of 7.5 million units from Chrysler, Ford and General Motors and eight million from all other automakers combined.

With that in mind, Grand Thornton has some advice for North American suppliers that manage to make it through the next few years but still find themselves tied too closely to domestic automakers: diversify now or face the consequences. Hit the jump for the press release.

[Source: Grand Thornton]

Continue reading Analyst: Detroit 3 to be outproduced by foreign transplants on U.S. soil by 2012

Analyst: Detroit 3 to be outproduced by foreign transplants on U.S. soil by 2012 originally appeared on Autoblog on Tue, 23 Jun 2009 08:57:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>auto supplierauto suppliersAutoSupplierAutoSuppliersdomestic automakerdomestic automakersDomesticAutomakerDomesticAutomakersnorth american productionNorthAmericanProductionsuppliersuppliersu.s. auto productionU.s.AutoProductionus auto productionUsAutoProductionTue, 23 Jun 2009 08:57:00 EST<![CDATA[WSJ: Obama nixes auto suppliers' request for aid]]>http://www.autoblog.com/2009/06/16/wsj-obama-nixes-auto-suppliers-request-for-aid/http://www.autoblog.com/2009/06/16/wsj-obama-nixes-auto-suppliers-request-for-aid/http://www.autoblog.com/2009/06/16/wsj-obama-nixes-auto-suppliers-request-for-aid/#commentsFiled under: ,



According to The Wall Street Journal, President Obama has taken a pass on granting auto parts suppliers' request for $10 billion in aid, leaving the financially-strapped companies to seek succor from Congress instead.

While the president's administration says it will keep a wary eye on the state of the industry, no more federal aid appears to be in the cards. As quoted in the WSJ, Neil De Koker, president and CEO of the Original Equipment Suppliers Association says that he thinks the government won't financially intervene further "unless we see chaos or a disorderly situation arising where have assembly-line shutdown due to lack of ability to get parts or stuff like that, then we would relook at this situation..."

While the industry's highest-profile bankruptcy have undoubtedly been that of General Motors and Chrysler, major suppliers like Karmann, Visteon and Metaldyne have also filed in recent months, and industry watchdogs see the potential for many more red ink stained white flags to be erected before the industry's economy recovers.

[Source: The Wall Street Journal | Image: Saul Loeb/AFP/Getty]

WSJ: Obama nixes auto suppliers' request for aid originally appeared on Autoblog on Tue, 16 Jun 2009 15:30:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>auto supplierAutoSupplierCongressNeil de kokerNeilDeKokerobamaOESAsuppliersupplierstier-1Tue, 16 Jun 2009 15:30:00 EST<![CDATA[Tier-1 supplier Metaldyne files for Chapter 11 bankruptcy too]]>http://www.autoblog.com/2009/05/31/tier-1-supplier-metaldyne-files-for-chapter-11-bankruptcy-too/http://www.autoblog.com/2009/05/31/tier-1-supplier-metaldyne-files-for-chapter-11-bankruptcy-too/http://www.autoblog.com/2009/05/31/tier-1-supplier-metaldyne-files-for-chapter-11-bankruptcy-too/#commentsFiled under: ,

To the roll call of auto industry titans that have gone or are going bankrupt -- Visteon, Chrysler, GM, Saab, Karmann, ASC, Source Interlink -- we can now add Tier 1 supplier Metaldyne, which filed for bankruptcy for its American operations. Metaldyne makes metal bits for car and truck chassis and NVH components.

The company has been restructuring its costs over the past year and a half, shedding $100 million in expenditures and reducing its debt. Still, as of the filing it had debt of $600 million on $2008 sales of $1.57 billion. Metaldyne's parent company, Asahi Tech Corp in Japan, helped the company lower its debt by about $400 million but has now walked away from further financial support.

There are two private equity firms interested in the company: Carlyle Group, which is looking to buy some of Metaldyne's chassis business, and RHJI, which is already a majority shareholder in Metaldyne's parent, Asahi. RHJI would throw about $100 million at the company and inject additional cash to run the business short term, as well as take on additional liabilities. Until (and if ever) a buyer is decided, Metaldyne is running on $18.5 million in debtor-in-possession financing from Deutsche Bank and customer funding.

[Source: Forbes]

Tier-1 supplier Metaldyne files for Chapter 11 bankruptcy too originally appeared on Autoblog on Sun, 31 May 2009 16:05:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>bankruptbankruptcymetaldynesuppliersupplierstier 1Tier1Sun, 31 May 2009 16:05:00 EST<![CDATA[STUDY: Toyota and Honda supplier relations suffer while Ford, GM improve]]>http://www.autoblog.com/2009/05/26/report-japanese-automakers-supplier-relations-suffer-ford-mak/http://www.autoblog.com/2009/05/26/report-japanese-automakers-supplier-relations-suffer-ford-mak/http://www.autoblog.com/2009/05/26/report-japanese-automakers-supplier-relations-suffer-ford-mak/#commentsFiled under: , , , , ,



In the latest installment of an annual supplier relations survey put together by Planning Perspectives, Honda and Toyota have upheld their top positions in spite of suppliers describing downgrading them to merely "adequate." Still above average in supplier relations rankings (along with Nissan), previously Japan's two largest automakers were ranked "good to very good." Honda is still gets top marks for involving suppliers in product development and for helping suppliers lower costs and increase quality, while Toyota's decline was attributed to "less experienced staff in Toyota's purchasing group for whom the 'Toyota Way' is not yet the way of doing things."

Domestically, the big winner was Ford. All three domestic makers still rank below average in supplier relations, but six years ago, Ford was dead last among the top six carmakers. This year, Ford takes the U.S. crown, with just 19% of surveyed suppliers saying they'd rather not do business with the company (or that they are ambivalent about it). For its part, General Motors has also improved, but Chrysler has, not surprisingly, remained on the bottom: Fully 54% of surveyed suppliers said they would rather not do business with the Pentastar. Thank you for the tip, Leonard!

[Source: Auto News, sub req'd]

STUDY: Toyota and Honda supplier relations suffer while Ford, GM improve originally appeared on Autoblog on Tue, 26 May 2009 17:27:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>chryslerfordgmhondanissansuppliersupplierssurveytier-1toyotaTue, 26 May 2009 17:27:00 EST<![CDATA[Who are Chrysler's top ten creditors? The answer may surprise you]]>http://www.autoblog.com/2009/05/13/who-are-chryslers-top-ten-creditors-the-answers-may-surprise-y/http://www.autoblog.com/2009/05/13/who-are-chryslers-top-ten-creditors-the-answers-may-surprise-y/http://www.autoblog.com/2009/05/13/who-are-chryslers-top-ten-creditors-the-answers-may-surprise-y/#commentsFiled under: ,



Chrysler's top ten creditors are owed about $400 million, and the top two creditors account for nearly $130 million of that. The company first in line for payment is Ohio Module, which is a subsidiary of Hyundai Mobis, which is in turn a publicly traded subsidiary of Hyundai. Ohio Module makes chassis for the Jeep Wrangler and Chrysler has run up a $70 million tab with the firm.

The next creditor is BBDO, Chrysler's ad agency, who beat out companies like Johnson Controls, Cummins and Visteon when it comes to money owed. BBDO is looking for $58 million dollars from the Pentastar, yet it is suspected that a good deal of those funds aren't actually owed to BBDO but to the media outlets from which the agency bought ad space, like local television stations. If so, that would be a huge hit for smaller affiliate outlets to take.

Although not on the top ten, the most surprising creditor recently added to the list is Bob Lutz. The amount of Maximum Bob's claim isn't known, but he has representation before the court to petitition for some sort of remuneration. Based on the line that's still forming, though, we have serious questions about his chances of recovery...

[Source: The Detroit Bureau]

Who are Chrysler's top ten creditors? The answer may surprise you originally appeared on Autoblog on Wed, 13 May 2009 17:29:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>bbdobob lutzBobLutzchryslerchrysler bankruptcychrysler suppliersChryslerBankruptcyChryslerSuppliersearningsfinancialssuppliersWed, 13 May 2009 17:29:00 EST<![CDATA[Toyota exec says automaker ready for GM bankruptcy]]>http://www.autoblog.com/2009/04/09/toyota-exec-says-automaker-ready-for-gm-bankruptcy/http://www.autoblog.com/2009/04/09/toyota-exec-says-automaker-ready-for-gm-bankruptcy/http://www.autoblog.com/2009/04/09/toyota-exec-says-automaker-ready-for-gm-bankruptcy/#commentsFiled under: , , ,



The world's largest automakers are intertwined in a myriad of ways and they need to watch their competitors in both good times and bad. When talk of a GM bankruptcy was first floated, the discussion of the effects naturally led to GM's suppliers. That discussion then led to what the effects would be on other car companies if a swath of suppliers was suddenly pulled under, and both Ford and Toyota indicated they would be adversely affected by a GM's fall.

Now the president of Toyota Motor Sales USA, Jim Lentz, has said that the automaker can handle a GM bankruptcy. Although GM and Toyota share roughly 330 suppliers, Lentz says "only a small number... are critically short on cash," without giving any indication of how many shared suppliers are included in that assessment. Even for those that might be in trouble, the $5 billion Supplier Support Program should further minimize the number of losses among them.

[Source: Detroit News | Image: Bill Pugliano/Getty]

Toyota exec says automaker ready for GM bankruptcy originally appeared on Autoblog on Thu, 09 Apr 2009 08:03:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>bankruptcyearningsfinancialsgmgm bankruptcyGmBankruptcymanufacturingplantssuppliersupplier support programsuppliersSupplierSupportProgramtoyotaThu, 09 Apr 2009 08:03:00 EST<![CDATA[Camaro supplier sues GM right back]]>http://www.autoblog.com/2009/02/18/camaro-supplier-sues-gm-right-back/http://www.autoblog.com/2009/02/18/camaro-supplier-sues-gm-right-back/http://www.autoblog.com/2009/02/18/camaro-supplier-sues-gm-right-back/#commentsFiled under: , , , ,



The Cadence-and-Camaro saga continues. Cadence, which makes interior parts for the Camaro, declared bankruptcy last August. GM sued the supplier to recover the specialized tooling machines it could need in order to continue Camaro production - or will it need to have the machines made again. GM also refrained from paying Cadence $4.9 million that Cadence says it is owed for "parts, labor, and equipment."

Cadence has now countersued The General, not just to get the money, but because that money is an integral part of Cadence's liquidation plans. Without it, Cadence maintains there will be "substantial harm to Cadence's bankruptcy estate." The pre-production Camaros are already in the works, and we have no idea how this development will affect the production version of the car. This battle can't be good for either company, but it's especially bad news for all of the Camaro faithful who are patiently awaiting the return of their king. Thanks for the tip, Scot!

[Source: Reuters]

Camaro supplier sues GM right back originally appeared on Autoblog on Wed, 18 Feb 2009 07:58:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>2010 camaro2010Camarocadencecamaroconvertiblecoupegeneral motorsGeneralMotorsgmmanufacturingsports carSportsCarsuppliersuppliersWed, 18 Feb 2009 07:58:00 EST<![CDATA[GM suing supplier to keep Camaro production going]]>http://www.autoblog.com/2008/12/27/gm-suing-supplier-to-keep-camaro-production-going/http://www.autoblog.com/2008/12/27/gm-suing-supplier-to-keep-camaro-production-going/http://www.autoblog.com/2008/12/27/gm-suing-supplier-to-keep-camaro-production-going/#commentsFiled under: , , , , ,



Every time GM turns a corner it seems to come face to face with another obstacle. The latest setback concerns supplier Cadence, LLC, which provides interior parts for the 2010 Camaro. Cadence declared bankruptcy in August, and is now in liquidation proceedings. To GM's chagrin, joining Cadence in its descent into commercial tar pits are the specialized machines that GM needs to make parts for the Camaro.

If GM can't get the tooling, there are certain to be disruptions at assembly plants and then on down the food chain. The General would then need to pay to have the tooling made again while it looks for another supplier, a cost GM describes as "substantial." GM would like to have a new supplier in place by January 12, 2009 because Camaro production is slated to begin on February 16, with deliveries in mid-March.

So far, it's unclear as to who actually owns the machines in question - Cadence or GM - and Cadence has had nothing to say on the matter. Regardless, if GM doesn't get its way, then it has to spend a chunk of the money it just fought for to recover old ground. The most recent precedent isn't promising: Chrysler tried to get the tooling from bankrupt parts supplier Plastech, and was denied. Thanks for the tip, Jerry!

[Source: The Wall Street Journal]

GM suing supplier to keep Camaro production going originally appeared on Autoblog on Sat, 27 Dec 2008 09:31:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>2010 camaro2010Camarobankruptcybankruptcy courtBankruptcyCourtcadence llcCadenceLlccamarochevrolet camaroChevroletCamarogmlegalmanufacturingpartssuppliersSat, 27 Dec 2008 09:31:00 EST<![CDATA[Chrysler suppliers demanding COD]]>http://www.autoblog.com/2008/12/12/chrysler-suppliers-demanding-cod/http://www.autoblog.com/2008/12/12/chrysler-suppliers-demanding-cod/http://www.autoblog.com/2008/12/12/chrysler-suppliers-demanding-cod/#commentsWith Chrysler's cash dropping to $2.5 billion as we race to the end of the month, suppliers to the automaker have begun asking for immediate payment for delivered parts. When suppliers demand COD from struggling companies such as Chrysler LLC instead of extending payment terms, it wreaks havoc with the company's financial structure. Chief Financial Officer Ron Kolka and Vice Chairman Tom LaSorda told the Associated Press that the company is "fending them off." In order to work out a viable agreement, the company has scheduled meetings with the suppliers today.

Although $2.5 billion sounds like a nice chunk of change, it's the bare minimum the automaker needs to make payroll and pay suppliers (as of now, Chrysler pays $7 billion to suppliers every 45 days). With the failure of the bailout last night in the Senate, Chrysler is in dire straits - without an immediate cash infusion the company could run out of funds by the end of the month.

[Source: Automotive News, subs. req'd]

Chrysler suppliers demanding COD originally appeared on Autoblog on Fri, 12 Dec 2008 13:58:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>cash flowcash reservesCashFlowCashReserveschryslerchrysler llcChryslerLlcKolkaLaSordasuppliersFri, 12 Dec 2008 13:58:00 EST<![CDATA[Surging steel prices cost automakers $500 more per vehicle]]>http://www.autoblog.com/2008/06/02/surging-steel-prices-cost-automakers-500-more-per-vehicle/http://www.autoblog.com/2008/06/02/surging-steel-prices-cost-automakers-500-more-per-vehicle/http://www.autoblog.com/2008/06/02/surging-steel-prices-cost-automakers-500-more-per-vehicle/#commentsFiled under: , , , ,

A few years ago, high(ish) gas prices and fierce competition had Detroit automakers talking about the "perfect storm" that the domestic industry was facing. Fast forward to 2008 and the entire auto industry, not just U.S. automakers, is in a full-blown tsunami. Gas is $4 per gallon, the U.S. is muddling its way through some seriously wobbly financial times, and now the price of steel has nearly doubled in five months to $1,035 per ton. Since just this January, the cost of steel in your automobile has risen $500 per car. The reasons for the sharp incline in prices includes both the increased cost of energy for steel makers and higher demand for the strong stuff coming from rapid growth in countries like China and India.

With everybody feeling the pinch of high materials, which also includes sharp increases in platinum and aluminum, suppliers are passing these costs on to OEMs, who in turn will be passing them on to us. That means we may soon be paying a lot more for our next vehicle. With rising gas prices, inflation, and a weak U.S. economy, car customers appear to be experiencing their own little thunder storm, too.

[Source: Automotive News - sub. req'd]

Surging steel prices cost automakers $500 more per vehicle originally appeared on Autoblog on Mon, 02 Jun 2008 11:28:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>ChryslerFordGMsteel pricesSteelPricessuppliersToyotaMon, 02 Jun 2008 11:28:00 EST<![CDATA[Striking UAW and American Axle will sit down and talk today]]>http://www.autoblog.com/2008/03/06/striking-uaw-and-american-axle-will-sit-down-and-talk-today/http://www.autoblog.com/2008/03/06/striking-uaw-and-american-axle-will-sit-down-and-talk-today/http://www.autoblog.com/2008/03/06/striking-uaw-and-american-axle-will-sit-down-and-talk-today/#commentsFiled under: , ,



The nine-day-old UAW strike on American Axle has already halted production at five GM plants and seven suppliers, and the two sides have yet to hit the bargaining table. That will change today, as both sides at least agree that they should be trying to reach an accord. The two sides are still far from agreeing on anything else, however, as American Axle wants to cut wage and benefit costs in half, even though the parts supplier is currently profitable.

Following the pattern of wage cuts at other suppliers, American Axle is prepared to offer buyout packages of $80,000 to $110,000. American Axle may also offer buy-down deals that will give workers a bonus for a number of years to cushion the blow of wage cuts. So far the strike has done little to hurt GM, as the automaker has been able to pare-down SUV and truck inventories while its plants are idled, but it's only a matter of time until the best available vehicles are gone. The 20,000 workers at GM and several suppliers that aren't working because of the strike are likely a bit more worried, but at least the two sides are talking.

[Source: Detroit News]

Striking UAW and American Axle will sit down and talk today originally appeared on Autoblog on Thu, 06 Mar 2008 07:01:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>American AxleAmericanAxleGMstrikeSuppliersUAWUnionThu, 06 Mar 2008 07:01:00 EST<![CDATA[Sorry suppliers, Ford and other automakers set to insource more parts]]>http://www.autoblog.com/2008/02/15/sorry-suppliers-ford-and-other-automakers-set-to-insource-more/http://www.autoblog.com/2008/02/15/sorry-suppliers-ford-and-other-automakers-set-to-insource-more/http://www.autoblog.com/2008/02/15/sorry-suppliers-ford-and-other-automakers-set-to-insource-more/#commentsFiled under: , ,

In this blustery economy, we often hear of jobs being outsourced to save money. The auto industry, however, and in particular Ford, is set to start a new trend: insourcing. Rather than contracting with suppliers to build certain components or sub-assemblies, automakers are now considering doing that work internally with union employees. The Detroit Free Press reports that Ford will be one of the first this spring when it begins assembling its own instrument panels for the Ford Taurus and Lincoln MKS sedan at its plant in Chicago.

The motivation to insource is the same it is for outsourcing: saving money. The United Auto Workers union signed new contracts with Ford, General Motors and Chrysler LLC. that allow each automaker to hire union workers at a new second-tier wage of around $14, or about half of the previous starting wage. Coupled with lower benefits, it's now cheaper in some cases to have the union do what was previously outsourced to a supplier.

It appears that the UAW had this in mind all along. The Big 3 actually agreed in writing with the UAW to begin insourcing a certain number of jobs - 3,000 for GM, 1,500 for Ford and 1,025 for Chrysler. The UAW even secured the right to effectively bid for future work along with the suppliers, for whom all of this does not bode well. Automakers, however, are not out to destroy their supplier base, as there'll still remain plenty of parts that make more sense to outsource and plenty that need to still be produced in the mean time.

[Source: The Detroit Free Press]

Sorry suppliers, Ford and other automakers set to insource more parts originally appeared on Autoblog on Fri, 15 Feb 2008 16:51:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>fordford insourceFordInsourceinsourceinsourcingsuppliersUAWunionunion suppliersUnionSuppliersFri, 15 Feb 2008 16:51:00 EST<![CDATA[BMW running at 100% capacity, simultaneously irritating suppliers]]>http://www.autoblog.com/2007/12/18/bmw-running-at-100-capacity-simultaneously-irritating-supplier/http://www.autoblog.com/2007/12/18/bmw-running-at-100-capacity-simultaneously-irritating-supplier/http://www.autoblog.com/2007/12/18/bmw-running-at-100-capacity-simultaneously-irritating-supplier/#commentsFiled under: , ,

BMW's running full-bore as it strains to double its profit margin within the next five years. Across all 23 of the company's manufacturing locations, capacity is maxed out at 100-percent, and there's nary an extra Roundel badge to be had. As BMW pushes for a 10-percent profit margin, they're also putting the squeeze on suppliers. To the OEMs, it seems that BMW has shifted its focus from quality and innovative technology to the bottom line. Not helping matters was a public statement by Manfred Scoch, deputy chairman of BMW's supervisory board, criticizing their suppliers for having better profits than the automaker. With their focus on building the Ultimate Driving Machine, BMW has enjoyed a reputation as a favorite customer of automotive suppliers. Scoch's lead balloon didn't go over well with the companies that make parts for BMW, and has stirred further rumblings that there's growing dissatisfaction with BMW's apparent focus shift. Suppliers shot back at BMW, expressing alarm at Scoch's statement and stating that their ability to generate a profit is tied to their innovation and hard work, rather than overcharging BMW. Understandably, suppliers are loath to concede any price breaks on agreements that are already in place.

For its part, BMW's decided that it's more cost effective to increase their ability to make some components in-house. With that in mind, the Leipzig and Regensburg stamping plants are undergoing expansion, and there will be a new Leipzig stamping facility in 2009. At least 200m euros will be invested in Leipzig and Regensburg, but BMW believes it's a better idea to invest its capabilities, rather than pay a supplier to sort it all out. By the time it's all said and done, further integration may happen to keep the slices on the pie chart looking healthy. If they keep ticking off the companies that make the pieces that they bolt together into automobiles, BMW may end up doing it all themselves.

[Source: Automotive News - Sub. Req.]

BMW running at 100% capacity, simultaneously irritating suppliers originally appeared on Autoblog on Tue, 18 Dec 2007 08:33:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>bmwcapacitymanufacturingmarginoemplantsproductionprofitscochsuppliersTue, 18 Dec 2007 08:33:00 EST<![CDATA[Toyota exec answers recall issues]]>http://www.autoblog.com/2006/09/18/toyota-exec-answers-recall-issues/http://www.autoblog.com/2006/09/18/toyota-exec-answers-recall-issues/http://www.autoblog.com/2006/09/18/toyota-exec-answers-recall-issues/#commentsFiled under: ,

It is no secret that Toyota has had its share of quality problems this year. The company has recalled over 1 million vehicles, and Kazuo Okamoto, head of its research and development organizations, is looking for the silver lining.

According to Okamoto, his company's recent quality problems can be pinned on their suppliers, and once Toyota figures out how its component quality slipped, its quality scores will be even higher than they are now! While we did not see any form of sinister laughing tucked in Okamoto's comments, we did find that he admitted the crux of Toyota's success in the US: the company's quality image in the United States is the 'lifeline' for all of its products. What was that, you mean it's not Toyota's exciting products?

Gary Convis, Toyota's executive vice president of Toyota's North American engineering and manufacturing operations, claims that the recall numbers seem high because of Toyota's move to consolidate suppliers by sharing components across several product lines. We call baloney on that, since many of the recalls we've seen also effect vehicles made ten years ago. Sharing components across products is nothing new. Anyway, we can all rest assured that Toyota's plans for global automotive domination will continue once it gets to the bottom of its component quality issues.

[Source: Automotive News, sub. required]

Toyota exec answers recall issues originally appeared on Autoblog on Mon, 18 Sep 2006 13:57:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>recallsuppliersuppliersMon, 18 Sep 2006 13:57:00 EST<![CDATA[Level Field Institute releases report on domestic content]]>http://www.autoblog.com/2006/09/01/level-field-institute-releases-report-on-domestic-content/http://www.autoblog.com/2006/09/01/level-field-institute-releases-report-on-domestic-content/http://www.autoblog.com/2006/09/01/level-field-institute-releases-report-on-domestic-content/#commentsFiled under: , , , ,

The Level Field Institute - a group consisting of Big 3 retirees - has released a report detailing the impact of domestic and transplant automotive OEMs on the American auto parts industry, and it contains some interesting nuggets of information.

Of the $225B in auto parts purchased from the US last year, approximately 77% was bought by the Big 3. GM led the spending with $85B in purchases, compared to $20B by Toyota. Overall, the domestic content of vehicles from the Big 3 averaged 71%, while Japanese automakers came in at 48% (note that both figures include vehicles that were manufactured elsewhere and imported into the US). Honda has the highest domestic content of any company outside of the Big 3, with 59% of its parts sourced in North America.

As the Level Field Institute points out, if the Big 3 were to drop their domestic parts buying down to the level of import manufacturers, the net loss to the US auto parts industry would be about $83B and 232,000 jobs. On the other hand, if the import manufacturers bring their domestic component buying up to the same level as the Big 3, the gain would be about $47B and 131,000 jobs. In all likelihood, what we'll actually see in the coming years is a convergence of these trends, with domestic manufacturers buying fewer components state-side, and foreign manufacturers increasing their domestic content.

[Source: Level Field Institute]

Warning - the Read link below points to a PDF.

Level Field Institute releases report on domestic content originally appeared on Autoblog on Fri, 01 Sep 2006 15:26:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>chinacompetitioncomponentscontentdcxdomesticfordforeignGMhondamanufacturingNAFTApartspurchasingsupplierstoyotatransplantFri, 01 Sep 2006 15:26:00 EST<![CDATA[Ford losses won't change plans for suppliers]]>http://www.autoblog.com/2006/07/24/ford-losses-wont-chane-plans-for-suppliers/http://www.autoblog.com/2006/07/24/ford-losses-wont-chane-plans-for-suppliers/http://www.autoblog.com/2006/07/24/ford-losses-wont-chane-plans-for-suppliers/#commentsFiled under: , ,

Ford Motor Company's recent $123 million second quarter loss may have the company scrambling to cut costs and otherwise speed up the Way Forward plan, but the company's suppliers shouldn't be too concerned. The company maintains that its efforts to streamline its supplier base will stay on track, which have already seen its supplier base of 2000 cut in half. Ford has already identified 36 preferred suppliers identified as supplying crucial parts to its manufacturing operations and signed multi-billion dollar long term contracts with some of them.

[Source: Detroit Free Press]

Ford losses won't change plans for suppliers originally appeared on Autoblog on Mon, 24 Jul 2006 09:28:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>fordsuppliersway forwardWayForwardMon, 24 Jul 2006 09:28:00 EST<![CDATA[Surprise, surprise: UAW not down with the plan to renew the exec bonus plan]]>http://www.autoblog.com/2006/07/15/surprise-surprise-uaw-not-down-with-the-plan-to-renew-the-exec/http://www.autoblog.com/2006/07/15/surprise-surprise-uaw-not-down-with-the-plan-to-renew-the-exec/http://www.autoblog.com/2006/07/15/surprise-surprise-uaw-not-down-with-the-plan-to-renew-the-exec/#commentsFiled under: ,

Not surprisingly, the United Auto Workers have taken issue with a bonus plan proposed for Delphi's executive management, saying that if the bonuses were to pass, it would ruffle some feathers as the two parties proceed with negotiations. The plan, which Delphi successfully petitioned the judge for in the first half of 2006, is in place to keep compensation at a level necessary to retain the best talent at the executive level, the company says. UAW workers don't agree, and as such, have filed objections with the court.

[Source: Reuters via Automotive News]

Surprise, surprise: UAW not down with the plan to renew the exec bonus plan originally appeared on Autoblog on Sat, 15 Jul 2006 13:08:00 EST. Please see our terms for use of feeds.

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Al Koch helped see over the revival of Kmart, so he knows a thing or two about financial difficulty - and that's exactly what he sees in the auto-part industry. Koch specially mentions decreasing production from domestic automakers as potentially causing severe trouble. While a move away from incentives has increased the profitability of the Big Three, it puts the squeeze on suppliers by decreasing production (you can bet that none of that profit makes its way down the supply chain). The loss of cash flow is particularly hazardous to those who have made substantial capital and R&D investments - not the sort of businesses that the industry wants to see struggling.

One potentially good shred of news is that capital is still easy to obtain, so that those suppliers who wish to borrow money can still do so. Conditions could also improve if gas prices fall or if the domestic automakers manage to stabilize their market share. A relatively painless resolution of the Delphi situation would also be viewed as a positive sign for the segment.

[Source: Houston Chronicle] 

Turnaround expert: Auto parts sector is a "very, very troubled industry" originally appeared on Autoblog on Fri, 23 Jun 2006 16:59:00 EST. Please see our terms for use of feeds.

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Delphi has announced the successful negotiation of a buyout deal for its employees who are represented by the International Union of Electrical Workers (IUEW). Approximately 8,000 employees are eligible to participate, and will receive either lump-sum payments of $35,000 or packages ranging from $40,000 to $140,000.

Delphi's former parent company General Motors will be footing the bill for these buyouts, which will be in the neighborhood of several hundred million dollars. Additionally, up to 3,200 IUEW workers will be able to transfer to GM for retirement purposes.

[Source: Money/CNN]

Delphi reaches buyout agreement with second-largest union originally appeared on Autoblog on Sat, 17 Jun 2006 21:40:00 EST. Please see our terms for use of feeds.

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Within the auto industry, it's something of an secret that most suppliers prefer to work with Asian "transplant" OEMs, who are perceived to be easier to work with. Planning Perspective's recently released survey shows that the Big 3 are making substantive improvements, but still have a long ways to go until becoming Best Friends Forever with the companies that supply parts to them.

Toyota once again topped the survey, earning 407 points out of a possible 500. Honda followed behind with 366 points, and Nissan brought home the bronze with 300 points. All of those scores are down or flat from last year, but they're still substantially better than Stateside competition. Tops among domestic automakers? DaimlerChrysler with 218 points, followed by  Ford with 174, and General Motors bringing up the rear with just 131.

While 76 percent of Toyota's suppliers stated that their customer relationship was "good" or "very good" and 11 percent characterized their rapport as "bad", only 3 percent had a favorable view of their relationship with GM, and a whopping 86 percent called their situation "poor."

[Source: Detroit News]

Domestic automakers improve relationships with suppliers, but Asians still much favored originally appeared on Autoblog on Tue, 13 Jun 2006 12:54:00 EST. Please see our terms for use of feeds.

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