GENEVA - Siegfried Wolf edges closer to the screen. He's watching a crucial match in which he is one of the competitors.
Wolf is bidding online for a huge contract to supply elaborate cockpit modules. The entire competitive process will take less time than the average football game. The scenario still is a fantasy for the president of Magna Europe, but one he is convinced will become real.
Wolf's view represents one extreme in the aftermath of the February 25 announcement of the word's largest online purchasing exchange created by General Motors, DaimlerChrysler and Ford Motor Co. Wolf believes complex systems of automotive parts, such as cockpits, will someday be secured online.
Others see online procurement being limited to commodities and simple components.
In general, automakers and suppliers have very different expectations for Internet-based reverse auctions in the purchasing of production parts.
But one aspect is clear: Its intention is to reduce component costs. DaimlerChrysler Chairman Jurgen Schrempp said last week online purchasing could someday save as much as $1,000 per vehicle.
Such figures have alarmed some parts makers. A purchasing executive at one Michigan-based electronics supplier, who asked not to be identified, went so far as to say it could simply be a ruse to scare suppliers into cutting costs.
While the three automakers surge forward with their combined trade exchange dealing with at hundreds of billions of dollars of production parts, other automakers foresee Internet purchasing in their own ways.
'No, no, no, no, no,' said Wolfgang Ziebart, board member for product development at BMW AG. 'For us, we will never do any auctions for parts that we deliver to our customers.'
Ziebart and BMW purchasing chief Wilhelm Becker, interviewed at the Geneva auto show, said BMW could use auctions for non-production, consumable commodities. But they said BMW would not use the auction for tires, as Ford Motor Co. already has.
'I don't see it for engineered products,' Becker said.
'Not even steel,' said Ziebart. Steel comes with too much variability in surfaces to leave the purchase up to an auction, he said.
David Thursfield, the Ford Motor Co. manufacturing expert who recently became president of Ford of Europe, suggested some caution. An Internet exchange could procure many individual components, but not modules, he said at Geneva.
At PSA/Peugeot-Citroen, Chair-man Jean-Martin Folz said the Internet represents progress from current systems of procurement, which are already electronic. 'We will certainly join one of those marketplaces,' Folz said.
Folz envisions buying parts such as switches on an exchange, but not something as complex as an instrument panel.
But Magna's Wolf has a different view. 'Commodities are a given, components are a given and (systems and modules) will be there, that is for sure,' he said. 'Why should the procurement people at the carmakers stop there?
'A cockpit? No doubt. They could auction off a black-box design just like everything else.'
Wolf said only parts which affect driving characteristics will not be auctioned.
For BMW that includes tires.
'For us a tire is not a commodity,' said Ziebart. 'We will only auction things that are not in the car. This is the BMW philosophy, and it also applies to Rover.'
Jens Neumann, a Volkswagen AG board member in charge of North American strategy, said he does not think that Ford, GM and DaimlerChrysler will jointly order production parts in their new venture, but rather commodities like steel.
Bob Lutz, CEO of battery maker Exide Corp. of Reading, Pennsylvania, USA, said the prospect of a single Internet marketplace reordering the automotive industry is overblown.
The former Chrysler Corp. president said the automakers might be able to shop online for commodity items such as batteries or brake pads. 'But the OEMs like to work with giant suppliers such as Lear or Dana, so the amount of shopping they can do is limited to the big systems suppliers,' he said.
Lutz said an open auction process with different parts up for bid every six months would mean reopening contracts. 'The industry would give up everything it has gained through cooperation,' he said. 'It will bring us back to price only, and then you can forget about quality.'
But Wolf said he can imagine the new e-purchasing world vividly.
'You had the previous contract, but now you are sitting looking at a screen,' he said. 'After 10 minutes you see the price go to $98 million, then $97 million. After 35 minutes the game is over.'
In the Ford tire auctions, after bids are made, the other participants have up to 30 minutes to counter. Rivals can see the other bids on the screen, but they don't know who is submitting them.
It is then, Wolf said, that things could get really exciting.
'A couple of competitors drop out, but there is one left which has bid $75 million,' he said. 'You ask yourself, 1/8what should you do now'? Is the competitor in-house? Or is this really a competitor at all? You'll have to be very careful.'
Peter Brown, Richard Johnson, Lindsay Chappell and Robert Sherefkin contributed to this report.