Supplier Response Running 'Very Strong' to 5th Annual Study of OEM-Tier 1 Supplier Relations

BIRMINGHAM, Mich., March 22 -- Auto supplier response to the annual study that evaluates the working relations between automakers and their suppliers is running surprisingly strong, says the study's author. The 2005 study was launched one week ago and will be open for supplier participation through March.

"In just the first week, we've received more than 80 completed surveys," says John Henke, president and CEO of Planning Perspectives, Inc., which conducts the annual study. "On top of that, we had more new suppliers sign up in advance to participate than in any year in recent memory."

The annual North American Automotive OEM/Tier 1 Supplier Working Relations Study involves most of the Tier 1 suppliers and the six leading North American automakers. It covers 14 major purchasing areas and examines the impact a variety of issues have on suppliers' financial health and how OEM purchasing practices impact suppliers' response. The study covers General Motors, Ford, DaimlerChrysler, Toyota, Nissan and Honda.

The study examines various OEM purchasing policies, the degree of trust the supplier feels for the OEMs, product development and engineering change practices, how OEMs treat suppliers' intellectual property and other confidential information, and cost vs. quality issues.

New This Year: Off-shoring and Recalls

This year, several new areas will be explored, according to Henke. These include topics of current interest such as the supplier's ability to recover rising material costs, whether or not OEM price reduction pressures are driving suppliers to move jobs and manufacturing offshore, warranty cost participation by suppliers, and whether suppliers believe cost reductions are contributing to recalls.

"Vehicle recalls were at record levels in 2004 as was off-shoring of jobs, so we thought we'd take a look at how price reduction pressures on suppliers might be affecting these two areas specifically," said Henke.

The Study results will be available in about 60 days and are typically presented at various industry forums such as Original Equipment Suppliers Association meetings. All participating suppliers are given a free summary of the overall results which help them set the strategic direction of their companies.

All Tier 1 supplier sales and engineering executives who interface directly with the OEMs are qualified to participate. Executives interested in doing so may register at http://www.ppiresearch.com/go/na2 and follow the instructions. A study questionnaire is then emailed to the participant. Information provided is strictly confidential, says Henke.

NOTE TO EDITORS: Questions about the Study can be directed to John Henke, president & CEO of Planning Perspectives, Inc., in Birmingham, MI. He can be contacted at henke@ppi1.com or by phone at +1-248-644-7690.