Typically, the only shakeup would come from automakers putting pressure on suppliers to cut costs.
“It’s been amazing,” Sharkey said. “Some have taken a surprisingly generous view and they’ve been actually giving price increases. Now, there’s no Santa Claus or Easter Bunny, but I’ve actually been surprised that some of the OEs are actually giving price increases because right now everyone’s having trouble getting supply, so they want to be the supplier’s favorite customer.”
The lack of supply chain-related lawsuits also indicates a desire by companies to resolve disputes before litigation. Earlier this year, Stellantis NV supplier JVIS-USA made headlines when it sued NXP Semiconductors, alleging that the chip maker’s failure to ship semiconductors would cause a shutdown of the Jeep plant in Detroit. The gush of similar lawsuits predicted by some has not happened amid the global microchip shortage.
Some automakers are more willing to renegotiate than others, just as some suppliers have different breaking points before asking customers for concessions. Sharkey and Walters declined to name clients.
Stellantis and General Motors declined to make anyone available to interview for this story. Ford did not respond to requests for comment.
Automakers keep purchasing strategies close to the vest, but whether and how they decide to help their suppliers absorb costs has an impact on their bottom lines, about which they must answer to investors.
“Obviously, I’m not going to go into any detail on any conversations that we’re having across our supply base, but what I would say is the singular focus is making sure that we have consistency and reduce some of the volatility that we’ve seen in the supply chain, whether it’s due to logistics or semiconductors, etc.,” GM CFO Paul Jacobson said during an October call with investors.
During a call with investors last month, Toyota executives briefly discussed the topic of price negotiations with suppliers and emphasized the need to accommodate both sides.
“With regard to relations with suppliers, well, we would like to coexist with our suppliers so that we can reduce cost and enhance the competitiveness together,” Kenta Kon, operating officer at Toyota, said during the call. “We would like to enhance competitiveness of suppliers, and we would like to reap the achievements fairly, together.”
Several big suppliers have echoed the all-in-this-together sentiment. Robert Lee, president of Automotive Technologies Continental North America, told Crain’s in a recent interview that the company is having “constructive dialogue” with customers regarding new supply deals.
