Martin Klingensmith wrote:

>Why is it that most things American on this list are automatically named as
>'EVIL'?

Is that really true? I don't think it's true.

>American's can produce good cars, as others have said it is the subsidy
>and corporate welfare that keeps fuel so cheap, I know fuel price increases
>would aggravate me and everyone else in the US but it's the only way a more
>fuel efficient car would be accepted. Does this mean the US can only produce
>"BAD" cars? As for roads, where does this statement come from? Tell me of a
>country that has more 4 lane interstate highway miles to drive on as 
>related to
>total land mass. There isn't a comparison.
>
>--- Harmon Seaver <[EMAIL PROTECTED]> wrote:
> >      Maybe so, maybe not, but it's irrelevant --- the basic problem with
> > nukes as far as I can see, and the reason I will *always* absolutely oppose
> > all of them, no matter what the design, is the human factor. Someone else
> > mentioned the terrorist problem, which is a a growing threat, but 
>the bottom
> > line is this: American workers and industry cannot even produce a decent
> > car, or decent roads to drive them on --- the worker sabotage and
> > carelessness, and the official and industrial corruption are such that they
> > never, ever will. And the same is true of the nuclear industry --- there
> > will never, ever, at any time be a safe nuclear plant built in 
>this country.
> > I've worked both in construction and also in auto plants -- sabotage and
> > absurd design are a given and always will be.

However...

http://auto.com/industry/iwirb25_20010725.htm

Study: Suppliers skimp on quality to meet automakers' cost-cutting demands

July 25, 2001

BY ED GARSTEN
ASSOCIATED PRESS

DETROIT -- A little thinner coating on the trim, a few less stitches 
on seating -- just some examples of how automotive suppliers are 
skimping on quality in order to meet cost-cutting demands of U.S. 
automakers, a study found.

HIGHLIGHTS OF THE STUDY
Some of the highlights of a study performed by Birmingham, 
Mich.-based Planning Perspectives on how cost cutting has effected 
quality among 261 major suppliers to the automotive industry:

QUALITY: 7 percent to 9 percent lowered quality to meet automakers' 
price cut demands; 20 percent improved quality; 75 percent maintained 
current quality standards.

TECHNOLOGY REDUCTION: 20 percent withheld some new technology from automakers.

SERVICE REDUCTION: 7 percent to 18 percent reduced services to 
automakers, such as consulting engineers.

PRICE VS. QUALITY: General Motors Corp., Ford Motor Co. and 
DaimlerChrysler AG place two to three time greater emphasis on price 
than quality when choosing suppliers, while Toyota and Honda balance 
price with quality.

Suppliers who were pressed by automakers to lower their prices to the 
point where it was difficult to turn a profit either maintained or 
lowered the quality of their products, according to the 2001 North 
American Automotive Supplier Survey, performed by Birmingham, 
Mich.-based Planning Perspectives.

The study looked at responses from 261 suppliers received between 
March and May.

"Only 20 percent of the suppliers said they were improving quality. 
Seventy-five percent said they're keeping quality as it is now," said 
John Henke, president of Planning Perspectives and the author of the 
study released this week.

Faced with a slowing automotive market coming off the record sales 
pace of 2000, automakers have put price reduction edicts of from 3 
percent to 8 percent or more on their suppliers.

The challenge has been for suppliers to cut prices enough to hang 
onto their contracts while remaining profitable. The answer, 
according to the study, has been to cut corners.

The study found the situations were consistent with suppliers 
regardless of their size. But Henke said occupant safety has not 
suffered.

"The goods are still at a very high quality," Henke said. "They look 
for areas where you can reduce quality without jeopardizing safety."

Henke said as other cost-cutting tactics, suppliers are cutting back 
support and services to the automakers, and withholding certain new 
technologies and extra testing.

"Both extra services and technology almost always have a relationship 
to the quality of the product," Henke said. "They're meeting the 
specifications of the automakers but not moving forward on quality."

Delphi Automotive Systems, the largest supplier in North America, 
took issue with the study and said its quality has steadily improved.

"Delphi is committed to providing our global customers with 
industry-leading technology and high quality and cost-effective 
products. We strive to achieve this through the Delphi manufacturing 
system which is our approach to lean manufacturing and by partnering 
with our customers to meet their objectives," Delphi said in a 
statement.

The study concluded that suppliers must abandon the past practice of 
applying one business plan to all their customers and adapt the 
practice of developing individual plans appropriate to each automaker.

General Motors Corp., Ford Motor Co. and DaimlerChrysler AG "place 
two to three times greater emphasis on price than quality when 
selecting suppliers, while Toyota and Honda, the quality leaders, 
virtually balance price with quality," the study said.

"Toyota and Honda provide the most help to suppliers to reduce 
internal cost and maintain quality," Henke said. In that way, he 
said, suppliers' profit margins are protected.

Before Toyota grants a supplier contract it requires the company to 
"jump an enormous number of hoops" to decide if it's qualified, Henke 
said. If the supplier wins the contract, then Toyota works closely 
with the manufacturer on cost reductions and ways to improve quality.

"Most automakers give the suppliers no help in finding ways to cut 
costs," says Jim Hall, vice president of AutoPacific. "They say, 
'give us what we need or we pull our tools."'

Auto companies provide the tools, dies and molds for certain 
components produced by suppliers to preserve proprietary designs.

General Motors spokesman David Barnas defends the automaker's 
quality, pointing to its strong showing in the latest initial quality 
study by J.D. Power and Associates. But he admits the company is 
concerned about balancing the need for cost-cutting with the demand 
for new technology.

"We recognize it. We know we need innovations in order to remain 
competitive," Barnas said.

To that end, he said GM is working hard to shore up relations with 
suppliers on several fronts.

GM has set up a suggestion program which solicits cost-cutting ideas 
from suppliers and shares in the savings.

Under the program that began earlier this year, GM splits the savings 
with suppliers on a 65 percent/35 percent basis, with the automaker 
taking the larger share. Suppliers who meet GM cost-cutting targets 
also get the first shot at subsequent business.

DaimlerChrysler also is now working more closely with suppliers to 
find cost-cutting areas, after demanding suppliers cut prices by 5 
percent earlier this year.

The move was hastened by a revolt by some suppliers, Hall said.

"They had some suppliers tell them to bag it," Hall said. "One 
supplier said 'pick up your tools."

Auto.com is published daily Monday through Friday by the Detroit Free Press.
Copyright © 2001 Detroit Free Press Inc.


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