Lopez 'success' challenged
To the Editor,
I WAS DISAPPOINTED to read in your front page article, 14 April issue, the repetition of the canard that the (surely disgraced) former VW executive, Senor Lopez, saved GM and VW $30 billion during his years as a purchasing executive of these companies.
There is no independent evidence to support this claim other than Senor Lopez's own publicity. Unfortunately, once claims are made they rest in cuttings files and pass into the mythology, never being challenged. The true measure of the skill of a senior manager with the type of responsibilities exercised by Senor Lopez can only be judged in the medium to long term.
The typical cost structure of an automotive component supplier involves direct costs at 60-65 percent of selling price. Therefore any fool could cut component prices in the very short term by holding a shotgun to the heads of suppliers who do not have any alternative customers. This is one of the tactics used by Senor Lopez, and it is one of the strategies on which he has built his reputation.
Unfortunately, suppliers subjected to this kind of action have to seriously curtail their medium to long term investment and/or immediately commence a switch to more forward-thinking customers who appreciate that the only possible calculation for a company in a free market is to secure a return on capital employed with which the providers of the capital are happy in the medium to long term.
There is plenty of evidence that problems have emerged with some suppliers affected by Senor Lopez's crude actions which have been detrimental to the business of his former employers.
Can we please not create a mythology about this man and his short-term 'success.'
J. J. Boulter
Chairman and Chief Executive
Bristol Bending Services Ltd., UK
Audi backs Euro currency
To the Editor,
Audi anticipates that European monetary union will take place according to schedule and is basing its plans for the future on this assumption. Audi is having to make far-reaching adjustments which are necessitating extensive reorganization projects.
These projects at Audi have been progressing at full speed since mid-1996. In addition to changeover measures costing tens of millions of marks, the company will have to absorb high demands on its data-processing capacity in particular.
It is important that our staff are psychologically prepared for the Euro. Their acceptance and their readiness to adjust rapidly will depend critically on clear policy statements and on an effective information campaign to inform the general public.
Those public bodies which have decided not to switch to the Euro during the transitional phase up to 2002 must not be allowed to add to the financial and organizational burdens facing business.
Juergen de Graeve