Abstract
Daimler - the world' s second largest premium OEM by volume - is
experiencing a great deal of pain in the current severe economic downturn.
After recently posting a worse - than - expected 2009 Q1 Net Loss of €
1.28bn, fewer advantages from scrapping bonuses compared to its peers, and a
significant cash burn forecast to run up to € 3.2bn, Daimler has to put
into action plans to optimise its cost structure. This is likely to result in
pressures on suppliers even if no formal plan has yet been disclosed to
achieve purchasing savings through price reductions.
In addition synergies in purchasing are expected from the much - touted
collaboration with arch - rival BMW. Although it is unlikely to become a
cross - ownership deal, the alliance might become increasingly industrial and
acquire a higher strategic profile.
Another source of changes in the relationship with suppliers will occur in
light of the introduction of a new cooperation model called the "Daimler
Supplier Network", which replaces the former approach of the "Extended
Enterprise". A new modular approach will allow the OEM to increase
standardisation and cross - platform sharing of modules with significant
operational and economic advantages. Favoured suppliers could reap the
benefits of the increased volumes from this new approach.
But while Daimler is not always perceived as demanding on price reductions, it
is becoming even more demanding of high quality. An area where Daimler is
unwilling to skimp on is R&D, with the budget for these activities increasing.
This is primarily justified by the need to lower its average emissions to meet
stricter standards.
Suppliers are required to act accordingly. The Stuttgart automaker wants to
appropriately reward those suppliers that come up with breakthrough
innovations. Exclusivity in innovations, no matter how expensive, has a high
priority.
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