Bernd Pischetsrieder, chairman of BMW and also ACEA, the European auto industry association.
Do you favor single sourcing, and suppliers of big modules?
It depends on which components we are talking about. All components that do not determine the identity of the product will be sourced as single components. The know-how will be ours. If it is a component that does not create a competitive edge, then we have a system supplier who supplies the complete part and does the engineering.
What if he does a poor job?
We see to it that that does not happen.
Do you go into his plant and control his manufacturing methods?
Absolutely. We control his engineering and manufacturing process and we pick the most reliable, not the cheapest, supplier.
We give him a contract for the lifetime of the product. We arrange the price in the beginning and as time goes by we control how rationalizing proceeds. If we pay $100 and the cost is only $90, then we pay $95 and share the profits of higher productivity.