AUBURN HILLS, Mich.—Michelin North America Inc. and Goodyear are among scores of suppliers asked by DaimlerChrysler A.G. (DCX) to cut material costs 5 percent effective Jan. 1, 2001.
The Auburn Hills-based car maker announced the request for price discounts Dec. 7. It is the first of a two-phase cost-cutting program the company hopes will prune 15 percent off the overall cost it pays to parts suppliers by the end of 2003.
In phase two, DaimlerChrysler said its engineers, platform teams and manufacturing and procurement engineers will work with suppliers to "identify an additional 10 percent cost improvement over the two-year period from 2001 through 2002." The company said the price reductions are intended to be "margin neutral"—that is, not affecting the profits of suppliers.
Teams of specialists for the car maker will spend six- to eight-week periods with suppliers to work on improving material costs. Within a year, these teams will consult with about 150 suppliers that represent more than 75 percent of DaimlerChrysler's annual purchases.
A spokesman for the auto maker told Tire Business that Michelin and Goodyear—the only original equipment tire suppliers for DCX—will be asked to discount prices.
However, he didn't know whether the two tire makers will be visited by DCX specialists.