My version of Automotive Supply Chain History as seen through my eyes over just under 30 years working for various suppliers to the industry. I'm leaving out all political references and will make referrals to various aspects of the industry as generica and neutral as possible. Feel free to read as much or as little as you'd like to "between the lines".
When I became involved in the plastics molding industry in the early 80's the U.S. carmakers were struggling to turn around their position. Post WWII boomed so strongly that they began to produce some dreadful vehicles because after decades of pent up demand, most of what they made sold and they made enough money that the status quo worked fine. Japanese industry in particular embraced up-front research and engineering in order to eliminate costs in manufacturing and assembly. (This is a whole entirely different subject that I remain fiercely passionate about in every element of my job to this very day. If you ever care to hear my rant on that subject we can do that in a different thread. lol)
It was apparent that approaches that were being used in Japan in particular were effective (which were taugh to them by an American) but the domestic car companies were stuck with a cost structure and cultural obstacles that prevented them from moving in the new direction, at least as quickly as they needed to in order to compete with their newly emerging competitors. They looked to their suppliers to gain an advantage on several fronts. First, their suppliers could move quicker than they could. Second, their suppliers had tacit and critical knowledge of their own processes that could help develop a higher quality product at a reduced cost. (It used to be that the carmaker sent you a drawing and asked you to provide pricing. Lowest price wins. Then they realized especially in the case of plastics that the guy designing a nylon gear was a guy that had been designing steel gears for 25 years and he really doesn't know that much about molding. The person who has been molding plastic gears can help you design one that works better and is easier to mold.)
This worked well through the late 80's and more design and development went to the suppliers. The carmakers cut much of their white collar work force (engineering and design) and some shifted to be employed by the suppliers, some were hired back as "contract" employees. (This allowed the accountants to take them off their books as financial liabilities. They were paid more but without benefits. I can't speak as to weather the higher pay offset the lack of benefits or not.)
Around the same time the carmakers wanted to deal with fewer suppliers. On first glance this makes sense - why deal with thousands of different companys when you could be dealing with a few hundred? Easier all the way around. So the next wave was for their "major" suppliers to develop even more engineering capabilities and evolve into "system suppliers". Rather than supply parts, they would supply entire drive trains, interior packages, body systems, etc. With this new "reward" for the supply base also came the "risk". If you were the lucky winner and supplied "systems", you'd also be responsible for warranty costs. This also seems very reasonable because after all, the supplier is designing, developing, testing, and producing the system.
The issues I saw through the late 1990's were related to pricing pressures. The design, development, testing and warranty costs were shifted to the suppliers while the car makes began to demand (and I mean demand, not request) annual price reductions. The suppliers that became big-hitters had increased their overhead tremendously and were now facing a reality that their millions of dollars of business had grown into billions of dollars of business and if you can't hit those price reduction demands, you're in trouble because you'll lose the work.
So the suppliers began to do what the car makers could not do themselves - move production, realign costs, etc. The main issue I've seen over the last 15 years is that the supply base did not have the infrastructure and resources in place to properly manage it. They started doing what I call "saving money no matter what it costs". Decisions were made based upon this quarter's profit instead of the long term health of the company and the business environment in general.
I still remember being "called on the carpet" with our largest customer at the time about 10 years ago. I was trying to be as tactful as I could out of respect for this customer but their recently promoted "quality director" was apparently growing tired of my protests and decide to flex his muscle in a filled conference room. They'd had a complaint that the interior part we supplied was not "black" enough. (Don't get me started on color matches - it's trickier than it sounds, lol.) We were using a "standard black" off the shelf which DuPont will tell you has no guarantees, it's just going to look "black". He's requesting we go to a custom color match and I tell him we'll gladly do that, but there will be a cost increase involved. He refuses to absorb the cost increase. I tell him I won't do it. He threatens me with pulling all of his work from me. I tell him he must do what he must, but I don't believe he has the authority to do so. He then gets really pissed and starts thumping his finger on the drawing on the table and shouting "You are responsible for meeting every single specification on THIS drawing."
I reply "This drawing right here?" and thump my finger on the same drawing.
"This drawing that's clearly stamped 'FOR REFERENCE ONLY'?"
"Very good then. Three of your plants will be shut down by morning."
"What do you mean?" (As snickers start to build in the room.)
"2/3 of your drawings don't come close to reflecting what you actually do in production. Your document and revision control sucks. Your people are all flying by the seat of their pants, but if you want it to be a black and white world, I'm good with that. If you want my employer to cover the costs of your oversights, I refuse to do so. Have a great aftenoon. I'll start sending up trucks to retrieve all our shipments made in the last week."
"You can't do that!"
"Not only have you given me permission to do that, I have the legal authority to do that. You haven't paid for any of that product yet so legally it belongs to us."
15 minutes into my drive back to the plant I get a call from the head of purchasing asking me "Tom, WTF are you doing?"
"Simply responding to the demands made of me."
"'!#@$# I don't need this drama."
"Neither do I dude, reign in your boy before he creates even bigger problems."
So what we have now are a collection of surviving suppliers spread across the globe that are doing a great deal of the development work that definitely has a payback. The ones who have survived have been able to do so by wisely using their resources, managing their costs, and knowing when to say "no".
We make a lot of electrical connectors and ship them to customers in low cost labor areas. Why not mold them there? We have the resources and experience to mold them better and as economically competitive as anyone else in the world. Why not assemble them to harnesses here? No way to automate sticking terminals into connectors on harnesses. We pay our people to mold and inspect parts on a highly automated line. They pay theirs to do the tedious manual assembly.
It's incredibly difficult to truly establish the true "origin" of everything. As others have pointed out a transmission may be assembled in one country, but many components may have been common in a different transmission and were produced in another country. Doesn't always make sense to tool it up in several places. If one machine is already banging 'em out, bang out more and send them to the other assembly point.
I always chuckle when I read articles that state the Kappa was a "parts bin car". What car ISN'T these days? If GM has 20 million power window buttons being produced already, would they really dump $60, $80, $120,000.00 to design, develop, and tool a new version? Heck no, all car companies commonize their components.
2007 2.4L N/A. Stock + WindRestrictor V2 + Kappa Attic + Kapparoo + Lil' Chromies + Kappa Luggage.