Chrysler DEMANDS Reductions

I saw this comment recently dealing with Chrysler quality:

• "Ewasyshyn, who has been with Chrysler since 1976, said vice-chairman Tom LaSorda began a quest for better quality when he came to the company in 2000 from General Motors Corp. But Ewasyshyn is at a loss as to why Chrysler still lags behind most other automakers in quality.
  
  "If I could answer that question, you wouldn't be asking it,'' he said. ``We certainly put enough energy and effort into it."

DUUUHHHH I think I may have the answer for him. I wonder if I can charge a a consulting fee.

No real choice is given if suppliers want to keep on selling to Chrysler.

As my source wrote:

• "Another round in cost savings being paid by the small guys.
  
  We have little choice, otherwise you don't get to fight for the other stuff which is going cheap already.
  
  Stephen Funtig is going to get busier yet....."

I just wonder. How can a supplier offer that much of a reduction if the component was priced competitively before? Does that mean suppliers pad their prices expecting to be asked to reduce costs? Or is the new component going to be made cheaper thereby increasing complaints about quality and warranty claims?

If so, no wonder the car companies are in trouble. They have taught their supply chain to price high and then give back cuts! Just like the expectation of high wages for workers and big discounts for consumers. Or to build poor components.

Isn't it ironic....GM loses $15.5 billion, its third-worst quarterly performance, while Exxon's profit in the quarter is $11.68 billion, the largest profit for a U.S. company, and still fails to meet analysts' expectations.

And if you did not notice...the demand is retroactive

How many suppliers can afford to give back 5% of revenues including past revenues without having their own financial problems. It's ridiculous.

PS. I just read in the Detroit News this laughable comment:

• "The purchasing chiefs of Detroit's Big Three automakers offered a grim forecast for auto suppliers in the face of a weak North American auto market, but all vowed to improve relations with the companies that provide their components."

And this

• "Grant Thornton LLP said in a research report last week that one-third of North American auto suppliers are at risk for bankruptcy filings.
  
  "The OEMs are becoming more deliberate of letting suppliers fail," Casesa said. "Many firms will be let to fail in this terrible downturn."