Supplier Competence Paramount In Downturn, Says CEO

John F. Fiedler, BorgWarner chairman and CEO, says that the economic downturn puts the emphasis on competence and R&D when selecting suppliers.
Speaking at the Automotive News World Congress he noted that BorgWarner has been able to stay profitable and increase shareholder value at a time when many industry suppliers have not. He cited innovation, a geographically diverse customer base and a focus that is balanced between the short- and long-term as some of the reasons.
“I admit that I personally got caught up in the ’90s hype and I had hoped to retire from this industry without another downturn,” Fiedler said. “Since that wasn’t to be, we decided we were going to do this one right. To that end, BorgWarner will continue to stay connected to the economy, and to our customers and their customers, as we preserve our financial health while awaiting the upturn.”
In addition, he discussed key questions that OEs should ask themselves about their suppliers as the downturn ends and vehicle makers become refocused on introducing new, value-added products in a tough global market:
— Do my critical suppliers have a distinctive competency? That is, do they do something better than anyone else in the world?
— Do they have a number-one or number-two position in worldwide market share among independent suppliers?
— Have the suppliers continued aggressive investment in R&D during this downturn, or are they falling behind in technology? Do they have an innovative culture and a disciplined approach to identifying “What’s Next” in our industry?
— Are they working on the important market objectives that will drive future sales–energy efficiency, environmental protection, safety, styling and the joy of driving?
— Can they offer me the engineering support that will assure a flawless launch of new technology?
— Are my key competitors purchasing from this supplier?
— Is the supplier assisting me in giving my customers a lower price or a better value?
— If I choose to outsource systems, is the Tier I supplier the owner of the key technology, or just an assembler?
Fiedler emphasized the importance of continuing to invest in R&D in spite of challenging industry conditions, and pointed to the mid-2002 opening of the BorgWarner Powertrain Technical Center in Auburn Hills, Michigan as one of the means by which BorgWarner will continue to innovate on behalf of its customers.