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Big 3 gain in supplier survey

Published May 15, 2012

DETROIT — Honda and Toyota plummeted in a survey on relations with suppliers, while gains by Chrysler and General Motors helped close the gap between top and bottom performers.

While no company changed places on an annual list with the six largest automakers by U.S. sales, the gap from Chrysler at No. 6 in supplier relations to Toyota at No. 1 was 19 percent, the narrowest in 12 years of research by Planning Perpectives Inc. In 2005, Toyota's score was more than triple that of GM, then No. 6. All six companies now are in the "low adequate range," the researcher said Monday.

Collaboration with suppliers can help automakers lower costs, improve quality and spur innovation. When sales drop, as in the recession and last year's tsunami and earthquake in Japan, automakers have leaned on suppliers to cut costs, said John Henke, Planning Perspectives' chief executive officer. Starting with the 2008-09 downturn, Toyota and Honda became "a little more adversarial" with suppliers, he said.

"It has gotten worse, but they're well above everybody else," Henke said.

Toyota's rating fell 9.5 percent, the biggest decline, while No. 2 Honda's dropped 5.2 percent, according to Planning Perspectives. Toyota and Honda have lost points in scoring for five straight years.

Chrysler gained 12 percent, the biggest increase, having improved for the third straight year. While Chrysler remained in last place, the difference between it and both GM and Nissan isn't statistically significant, Henke said.

Ford remained in third place for the second straight year.

GM rose 6.4 percent and ranks fifth. The Detroit-based automaker, which exited bankruptcy in 2009, has more than doubled its standing with suppliers since bottoming out in 2005. Nissan, based in Yokohama, Japan, rose 3.6 percent and ranked fourth.

Comments from the companies show they pay attention to the survey results.

"While we appreciate our ranking position, we clearly understand we have work to do in strengthening our relationships," said Robert Young, Toyota's head of purchasing for manufacturing operations in North America.

"There has been this convergence and all the relationships are improving overall," Honda spokesman Ron Lietzke said. "It validates what Honda started 30 years ago that developing cooperative partnerships with suppliers has perhaps become mainstream in the industry."

At Chrysler, "we are very pleased to see evidence that the work we are doing to improve our relationships with our suppliers is making an impact," said Scott Kunselman, senior vice president for purchasing. "The survey results make it clear that while we are on the right track, we still have a long way to go."