General Motors‘ recently appointed head of purchasing, Steve Kiefer, is happy to see his suppliers making plenty of money as the automotive industry continues on its turnaround. This is a feeling he doesn’t share with Fiat-Chrysler CEO Sergio Marchionne, who said he’d “find a way that we (FCA) can at least participate in (suppliers’) well-being, and perhaps allow them to rub off some of their newfound wealth onto us,” Automotive News reports.
Kiefer jumped aboard the GM mother ship in August of 2013 after leaving Delphi, and has since replaced Grace Lieblein as the company’s global head of purchasing and supply chain. He’s looking to repair GM’s historically strained relationships with its suppliers, and coming from a supplier background himself, he has a good understanding of what keeps them happy.
“There has been a lot of talk about our supply base making too much money,” Kiefer told AN. “I would say I disagree with that. I have no concerns with that. Having been a supplier, I know how hard it is making money in this industry.”
“From my perspective, our suppliers that are making good margins, have sound balance sheets,” Kiefer said. “They are financially sound. These are good suppliers. We like these kinds of suppliers.”
Kiefer said GM will be awarding “hundreds of billions” of dollars worth of supplier contracts for different global vehicle platforms over the next two years. Controlling costs will be a major part of the plan, but the automaker doesn’t plan on doing it by wringing their suppliers of profits.
By improving its sales forecasting, communicating better and listening to supplier concerns, involving suppliers more in the vehicle development process and awarding longer-term and higher-volume contracts, GM will better control costs while also improving supplier relations.
“We are going to earn trust by more transparent communications and more honest and accurate planning,” said Kiefer. “I know our volume planning has been a shortfall in the past, and we are committed to improve on that.”