GM asks suppliers for larger contracts, increased innovation image

The biggest US automaker and the third largest in the world turned its traditional event dedicated to its parts makers into an impromptu sales drive, seeking big ideas and just as large contracts.

The company’s incoming purchasing boss, Steve Kiefer, was on stage during the event at the start of the month to commend 78 suppliers who excelled in quality and innovation last year. During that time, he also took the opportunity to deliver some commercial insights to their partners – urging and explaining why the suppliers would do well to bring their best stuff to the automaker. “The smart money should be on General Motors,” he commented. He added that in the next 18 to 24 months the company will be “sourcing hundreds of billions of dollars worth of new business contracts.” The manager took the position of vice president of global purchasing and supply chain back in November and is eager to prove he was chosen for the right reasons.

Kiefer, 51, even courted the suppliers by asking them to pitch him, personally, with a larger than life idea during the next month. The event’s morphing into a true sales pitch shows how far carmakers have come to depend on their supplier base to source innovative ideas. They need them more than ever to drive progress, with the auto industry on the brink of a technological revolution – all triggered by the emergence of driverless cars, connected and mobility services. “Suppliers are much more willing and able than ever to go with the OEMs with which they have the best relations,” says John Henke, president of research firm Planning Perspectives. His firm usually delivers an annual survey on the relations between carmakers and suppliers, stressing the former are increasingly vying for more exclusive contracts or becoming the “preferred customer” for parts makers to bring their latest innovations.

Via Automotive News Europe