Suppliers Give Toyota Top Marks, But Detroit Narrows Gap

Supplier relations with U.S.-based automakers in North America continue to improve even as their relationships with top-ranked Toyota and second-place Honda keep deteriorating, says Birmingham, Mich.-based Planning Perspectives Inc.

The consulting firm's annual North America Supplier Working Relations Index is based on how suppliers perceive their relationships with the region's six largest automakers.

Scores for Toyota (-9.5% this year to 296 out of a possible 500) and Honda (-5.2% to 293) have declined for five consecutive years. Ford (267) remains in third place even though its rating has been stalled for three years. Nissan's 2012 grade improved 3.6% to 256.

General Motors and Chrysler posted their best results ever. Fifth-place GM boosted its score 6.4% to 251. Chrysler was the most-improved carmaker with a 12% gain to 248. The gap between sixth-place Chrysler and top-rated Toyota is 48 points, the narrowest range in the survey's 12-year history.

The survey gathers opinions about how well carmakers communicate, provide profit opportunities and help suppliers reduce cost and improve quality. The consulting firm says higher scores correlate with lower costs, higher quality and greater technology sharing.

Planning Perspectives President John Henke tells Bloomberg News that one reason Toyota and Honda have slipped is that they became a "little more adversarial" about pricing during the auto industry's downturn.

He notes that parts makers can now afford to be choosy about their customers because the recession thinned supplier ranks, and parts demand is now booming. Henke tells Bloomberg that automakers can no longer act like kings who treat suppliers like serfs. Among other things, that means an end to demands that suppliers reduce their parts and materials prices by 5% every year, he says.

Planning Perspectives has included BMW, Mercedes-Benz and Volkswagen in its survey since 2010 but says it does not yet have enough data to include them in the index. The firm says all three European companies have lost ground over the past two years. Even so, if they had been included in the 2012 index, BMW (307) and Mercedes (300) would have topped the ratings. VW (247) would have ranked last.