Toyota tops auto-supplier relations study, as Honda rises and Stellantis drops

Toyota Motor Corp. had the best working relationship with its North American suppliers, according to an annual study from accounting firm Plante Moran, while Honda Motor Co. showed the most improvement, and views on Jeep-maker Stellantis NV soured.

This year's North American Automotive OEM-Supplier Working Relations Index was ripe for change given the supply-chain disruptions ongoing for more than a year that have halted vehicle assembly, depleted inventories and increased the costs of production. But the results, whose positioning was consistent with last year, show decreasing trust in those relations that represent 75% of the value of a vehicle isn't a foregone conclusion, said Dave Andrea, a principal and automotive strategist at Plante Moran. Maintaining that cooperating can be an indicator of navigating future crises.

"Supplier relations don't need to dip or weaken in that these situations like that," he said. "When you look at both Honda as well as Nissan, it showed they could improve their overall relations in an atmosphere of the same deck of cards that were dealt with all six of the OEMs and improve their supplier relations."

Honda improved by 18 points to 334, narrowing its gap to 11 points with No. 1 Toyota, which fell by two points year-over-year and sold more vehicles in the United States last year than any other automaker. Nissan Motor Co. Ltd. at No. 5 with 219 points rose by eight points.

Honda showed strengths in timely resolution of issues and accessibility, and it recently appointed a new senior vice president of purchasing, Andrea noted. Supplier relations also is a key point of the Nissan Next corporate strategy.

The evaluation from mid-February to mid-April came from 673 responses from 436 supplier companies representing more than half of the six automakers' spend, according to Plante Moran.

No. 3 General Motors Co. with 287 points fell by two points after dramatically increasing its score from 2020 to 2021. Ford Motor Co. behind it fell by seven points to 242.

"This comes back to all the issues, all the fires across the different fronts that the OEMs need to cover," Andrea said. "It gets back to resources for the timely resolution of issues on material cost increases or on pricing disputes. That was one area where (Ford) took a hit."

Whereas at GM, "it didn’t overwhelm them," he said. "It certainly pushed and tested their people and their process this year," especially with major launches of the all-electric Cadillac Lyriq SUV and GMC Hummer pickup.

GM said the consistent survey results highlight the importance of trust and transparency with suppliers, Jeff Morrison, GM's vice president of global purchasing and supply chain, said in a statement.

“The ongoing support and commitment of our suppliers has been key in helping us manage the unprecedented number of challenges that have impacted the global industry this past year,” Morrison said. “This will be instrumental as we build a resilient, secure, scalable and sustainable supply chain to support our EV growth moving forward.”

Stellantis fell by 42 points to 128. A major contributor to the decrease was the introduction of unpopular new contract terms with suppliers that in North America would've required them to pass along any cost savings to the transatlantic automaker, Andrea said. Following a backlash, Stellantis last week retracted the changes.

"That decision was definitely supported in how these results turned out," Andrea said. "It's a two-way street for OEMs and suppliers. There's three key elements that we measure in the study around realistic expectations, about accountability, and the sharing of information. It almost codified mistrust in the relationship."

Other concerns also came up around Stellantis with respect to downsizing following its creation from the merger between Fiat Chrysler Automobiles NV and French automaker Groupe PSA last year and suppliers needing to share in bearing the increased cost of electric vehicles over conventional ones, Andrea said.

bnoble@detroitnews.com

Twitter: @BreanaCNoble