One-by-one, engineering executives have moved into the top procurement jobs and they are focusing more on integration of parts procurement with product development and smooth launches, than slashing piece prices.
True, not all supplier executives agree with that assessment. But there is a clear, measurable difference in the way they view their American customers compared to a decade ago, when relations were far more contentious.
The latest move in this direction is the departure at the Ford Motor Co., which last week announced the retirement of Tony Brown, Ford’s global purchasing boss since 2002. Brown, 57, has been replaced by Hau Thai-Tang, who had been the company's engineering chief.
Thai-Tang is representative of the new group of purchasing leaders at the Detroit Three. They are career engineering and product development executives, not professional parts-buying titans who have spent their entire working lives in the purchasing organizations of their companies.
The trend is noteworthy and the impact on suppliers is significant. A more collaborative style among the Detroiters is obvious from the results of SupplierBusiness OEM-relations sampling and in other surveys.
Brown was a former supply chain executive at United Technologies Automotive, before joining Ford in 1999. Thai-Tang, 46, who was born in Vietnam, ran Ford’s global product programmes before becoming head of engineering. His resumé also included responsibility for Ford’s SVT high performance group and the launch of the 2005 Mustang. Earlier in his career he was a race engineer for Nigel Mansell and Mario Andretti.
That’s not your garden variety purchasing czar. Indeed, Thai-Tang had been pegged as a rock star in the product engineering realm, which in the past would have never put him on a path to purchasing at a Detroit Three company.
Grace Lieblein, GM’s new top purchasing executive, had never worked in purchasing before taking her current post late last year. She began to draw attention as the chief engineer on the GMC Acadia and Buick Enclave crossovers that arrived in 2007 and then moved to the top job at GM Mexico in January 2009.
Later, as the company’s top executive in Brazil, she developed a reputation for supply chain expertise while GM do Brasil launched nine new models in under two years. She won high marks for integrating purchasing and logistics with product development globally. GM executives have lavished praise on the way Lieblein brought the two disciplines together in Brazil.
In her new job as global purchasing boss, she focused initially on a smooth execution of the launch of the Chevrolet Silverado and GMC Sierra pickups. It was Lieblein who called in retired GM engineers to work with suppliers to make sure nothing went astray as the crucial full-sized pickups went into production.
Some Detroit industry-watchers say the current trend toward accomplished engineering executives running purchasing began with the appointment of the late Dan Knott as Chrysler’s procurement boss. Knott, who died last year, had been a product development executive at Chrysler and injected a strong sense of supplier partnership when he was named head of purchasing in 2009.
Knott had been a pure product guy before taking over the job. He had helped create SRT models including the Dodge Viper, Jeep Grand Cherokee and Chrysler 300C.
His successor was Scott Kunselman, who had been head of engineering at Chrysler. Kunselman’s approach also is typical of the new breed. Indeed, teams of Chrysler engineers are working closely with 10 suppliers to improve their productivity.
But Knott set the tone at Chrysler, just as two other executives played key roles in changing the purchasing culture at the other Detroit automakers.
One is GM North American President Mark Reuss, who returned from the top job at Holden in Australia three years ago to become GM’s head of engineering. In that position, he immediately instituted monthly meetings with suppliers to work out issues upstream. As the President of GM North America, his current position, Reuss brought his influence to bear on veteran purchasing executive Bob Socia, Lieblein's predecessor.
The other major change agent in the turnaround of Detroit Three supplier relations was Ford CEO Alan Mulally, who carried over his legendary supplier relations expertise from Boeing when he moved to Ford in 2006. Many suppliers say that it was Mulally, more than Tony Brown, who brought about the positive cultural change in Ford purchasing in recent years.
