=+“The Big Three select suppliers on the basis oflowest price and annual price reductions,” said Neil De Koker, president ofthe Original Equipment Suppliers Association. “They look glob¬

allyfor the lowest parts pricesfrom the lowest cost countries,” De Koker said. “There is little trust and respect. Collaboration is missing.” Japanese auto makers want long-term supplier relationships. They select suppliers as a person would a mate. The Big Three are quick to beat down prices with methods such as electronic auctions or rebidding work to a competitor. The Japanese are equally tough on price but are committed to maintaining supplier continuity.

“They work with you to arrive at a competitive price, and they are willing to pay because they want long-term partnering,” said Carl Code, a vice president at Ernie Green Industries. “They

/Honda and Toyota/ want suppliers to make enough money to stay in business, grow and bring them innovation.” The Big Three’s supply chain model is not much differentfrom the one set by Henry Ford. In 1913, he set up the system ofindependent supplierfirms operating at arm’s length on short-term contracts. One consequence ofthe Big Three’s low-price-at-all-costs mentality is that suppliers are reluctant to offer them their cutting-edge technology out offear the contract will be resourced before the research and development costs are recouped.