John L. Russell / Associated Press

"The days are long past where GM was so arrogant that we thought we knew everything," GM Vice Chairman Robert Lutz says. GM urges more open dialogue as parts makers face intense pressure to cut prices.

GM aims to improve supplier ties
'We are ready to learn,' Lutz tells conference

By Susan Carney and Mike Hudson / The Detroit News

TRAVERSE CITY -- General Motors Corp. wants to improve its relationship with suppliers through the kind of communication that will earn their trust, GM Vice Chairman Robert A. Lutz said Wednesday at the auto industry's annual management conference here.

Parts makers are critical partners in developing innovative, high-quality cars and trucks and should have collaborative relationships with automakers, Lutz said.

They should suggest different ways of doing things and should not hesitate to question customer demands. Blind compliance amounts to what he called "malicious obedience."

"The days are long past where GM was so arrogant that we thought we knew everything," Lutz said. "We're ready to learn."

GM's call for more open dialogue comes as parts makers face intense pressure from all automakers to cut prices even while taking on more expensive design and engineering work.

But suppliers have the worst relationships with Detroit's Big Three automakers, according to a recent survey by consultant Planning Perspectives Inc. in Birmingham.

Building trust with suppliers is part and parcel of a common sense strategy Lutz said is key to thriving in the automotive business.

Whether the challenge is intensifying competition, slumping sales or moribund products, the companies best prepared to cope with problems are those that anticipate and prepare for them.

"When you've been through enough of these crises at enough companies and seen enough of these threats coming at you, you learn you have to just sit down and stare 'em in the face," said Lutz, who helped resuscitate the former Chrysler Corp. in the 1990s.

The common sense strategy is paying off for GM, he said. The automaker, not long ago considered a lumbering bureaucracy that churned out too many look-alike products, is evolving into a more nimble, more focused organization.

"GM has changed, and it's changing more, and changing faster than I would have ever believed before I arrived a year ago," Lutz said.

In a question and answer session after his speech, Lutz addressed environmental concerns and GM's controversial decision to stop offering anti-lock brakes as standard equipment on most vehicles.

He said California's recently enacted emissions law was a noble effort to control pollution, but was trumped by the fact that gasoline prices are so low in the U.S.

"If gas is $1.20, you can forgive the customers for buying a Lincoln Navigator or Hummer2," Lutz said. "We can't go in the opposite direction of our customers."

Lutz further said low gasoline prices were a deterrent to the acceptance of more fuel efficient diesel engines in America.

GM made anti-lock brakes optional because only 40 percent of customers want the technology enough to pay for it as a standard equipment.

"If safety were a question," he said, "we wouldn't have done it."