BRUSSELS - Hardly a week passes in Europe without another supplier buy-out or merger. Still, Europe's automakers don't appear worried about the emergence of mega-suppliers.
'The concentration of the supplier industry offers more advantages for carmakers and suppliers,' said Johannes Rudnitzki, Daimler-Benz vice-president of purchasing. 'The benefits far outweigh the drawbacks.'
Rudnitzki made his comments during a panel discussion at the Automotive News Europe Congress in Brussels. Top purchasing executives from Daimler-Benz, GM Europe, BMW and Volvo talked about relations with supplier companies.
Rudnitzki said consolidation creates more flexible component companies and simplifies relations with suppliers. He said that suppliers will become more competitive by adding global production sources.
The topic has been a hot one in North America, where carmakers have warned against the dangers of big suppliers buying up small ones. But Europe's purchasing chiefs sound relaxed about the wave of consolidation.
'I have no fear of mega-suppliers,' said Wilhelm Becker, BMW vice-president for procurement.
Becker said he approved of Lear Corp.'s recent acquisition of Keiper Car Seating. It will make Lear a better partner, he said. Lear supplies seats for BMW models.
In general, Becker said suppliers must take over more development work.
'At present we don't have full development suppliers,' he said. 'We are at the beginning.'
Becker said smaller suppliers often cannot finance new development two to three years ahead of production. He also said the most innovative supplier is often a big supplier.
Bo Andersson, vice-president for supply at GM Europe, agreed that innovation is becoming more important. He called for more cooperation between suppliers to better utilize resources and eliminate duplication. He said that in Europe medium-sized suppliers are often among the most innovative.
Rudnitzki does not expect the level of supplier involvement planned at Micro Compact Car's Smart car plant to become widespread. A few key suppliers will deliver large modules to the Smart assembly line in Hambach, France.
'Such an arrangement depends on the concept of the car,' said Rudnitzki. 'It is unimaginable for the S class or E class.'