Suppliers are rapidly losing faith in General Motors as a business partner, according to a SupplierBusiness.com satisfaction survey.
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Trust in the world’s top car maker has decreased sharply over the last two years, GM is less attractive to work with and less respectful of suppliers’ capabilities, say survey respondents.
“GM in North America has gone from being No. 1 among the domestics to the worst of the three,” said one US-based supplier. “By far GM is much worse than the New American Manufacturers (US transplants).”
Over 50 supplier companies responded to the survey, which asked them about doing business with GM in North America, GM Europe and Saab.
The suppliers feel that General Motors has ratcheted up pressure to reduce price more than other OEMs during the survey period.
“Pressure for cost reductions within GM has broken down many processes and created a total breakdown in supplier partnerships and trust,” said one vendor.
GM has also increased quality demands, according to respondents. And demand for product liability guarantee has gone up, too.
At the same time, survey participants say the opportunity to make a decent return on business with GM has decreased significantly, said SupplierBusiness.com analyst Alex Graham.
While 86% of respondents said that they use GM’s SupplyPower web portal, suppliers said that GM is using e-business in a less even-handed way than two years ago, added Graham.
The failure of the Vectra/Signum programs in Europe to attain predicted sales volumes has led suppliers to question GM’s ability accurately to forecast volumes.
“Due to these low volumes,” said one irate respondent, “almost all of our suppliers will increase their price levels or stop business with us. For future business the extreme deviation from nomination volumes will be a major issue for our top management, concerning approval for any future GM projects.”
81% of those who replied said they found the GM performance ratings system useful for their own evaluation and most believed they are applied consistently. But many were not convinced that the ratings are applied fairly, said Graham.
One respondent said: “GM applies their ratings much more severely to suppliers who do not meet their cost down targets as a way of ‘punishment’ for perceived non-cooperation.”
The full survey will be published on January 15.
