Since the supplier that I worked for supplied to Ford/Visteon and GM/Delphi, but not to Chrysler, I can't dispute that. While I can't say that that didn't happen at Ford or GM, I can say that I never saw any evidence of that. Cut cost where you can (and sometimes even where you can't), but not to intentionally design all enginerring safety factor out of it to intentionallly make it fail earlier). IOW, while it may have been the culture at Chrysler, I can honestly say that I saw no evidence of that type of culture at Delphi or Ford).
While Ford's 5% per year mandated reduction in parts cost from suppliers (that truly was mandated - some years even more than 5%), was unconscionable, in their defense I will say that some of their costs, such as employee health insurance, ate up a lot of savings, as it has in all businesses. But it does seem rather hypocritical of them to expect a supplier, whose unavoidable overhead costs are also going up, to absorb such costs while at the same time dumping more and more costly, often-times non-value-added bogus quality-control programs onto the supplier (another source of cost increase to the supplier). The inevitable result was that the supplier, in order to stay in business would fake the quality programs to cut down on number of employees to run them, and the amount of resources that remained to maintain true quality measures were grossly inadequate. This resulted in quality spills and even greater costs shoved back onto the supplier (Ford simply issued an accounting of their costs associated with the quality spill and deducted that amount from outstanding invoices). So now the supplier has even less margin from which to improve their quality systems, if they are not already in the red. Remember Firestone tires on the Explorers?
Contrary to your numbers, the downward spiral of that scenario has proven to impact Ford's profits. Instead of it resulting in their sales increasing faster than their costs, quite the opposite has happened (i.e., profits are **WAY** down).
Not true. GM has plenty of their own tricks to screw the supplier (witnessed first-hand). Ask your friend who works at Chrysler what "Lopez'ing" is. I bet he knows - and Lopez left GM several years ago to go with VW, yet the term "Lopez'ing" is still standard lingo in the auto manufacturing biz for underhanded contracting techniques. GM was so proud of the supplier-screwing techniques that Lopez developed while at GM that when he went to VW, they (GM) sued him to prevent him from transferring the same techniques to VW. He ended up doing some hard time, but I forget what that was for - maybe not related to his techniques.
One of GM's "screw the supplier" techniques: PICOS. That's where they have your company (who is currently making a part for them) spend many man hours and $$ traveling to meet at their facilities and also hosting them at yours for several two-, three-, and four-day meetings, brainstorming how to improve and cheapen a product and manufacturing process - this is all done with the absolute up-front promise that they will not put the part out for competitive bidding at the end of the process, and that you will share 50/50 in any cost savings that result from the joint effort. And then, when you have the parts and process drawings all updated with the money-saving improvements that you spent lots of money helping them come up with for mutual benefit, they circulate the new drawings that you helped develop with the improvements to all of your competition and ask for competitive bids. And guess what? If you want to keep the business, to stay competitive, you have to cut your price and loose all the savings that they promised you at the beginning of the PICOS process that you would share in - if you don't bid with *ALL* of the savings taken out, your competition will outbid you and you lose the business. When you bitch to their contracts people, their response is "Well, no problem, go ahead and keep those future cost savings in your price if you want to". Modern business ethics at its best.
Also, I saw an incident in which a supplier refused to cut their price to GM in ***the middle*** of a supplying contract, and, in retaliation, GM put them on their supplier black list (i.e., existing business stays as is, but no *new* business allowed to be let to that supplier until they are removed from the list). Could the supplier sue? Sure, and possibly even win - but then that will be the last piece of business they would ever get from GM, and possibly from Ford too - so they possibly would win the law suit, but would end up going out of business.
Reminds me of a story I heard one time from a person. Seems that he notified the buyer at Delphi that a mistake had been made on a recent quote - that the price that was going to be charged to Delphi for the part should have been higher. The buyer's response in effect: "Hey - a deal's a deal - you already quoted it - that's what you have to sell it to us for - too bad". The supplier had its people go over the numbers with a fine-toothed comb to better understand the mistake and see if maybe it wasn't as bad as originally thought. Lo and behold, they discovered that - yes - an error had been made on the quote, but instead of the price being to low, it was actually too high by very close to the same amount. They picked up the phone to notify the buyer, but paused long enough to remember his words: "A deal's a deal...too bad", and said to themselves "Darn - I guess there's no use telling him about it - after all - a deal's a deal". They put the phone down. True story - funny though - I can't remeber that guy's name who did that.
Bill Putney (to reply by e-mail, replace the last letter of the alphabet in my address with "x")