April 1st, 2006, 04:39 AM
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Join Date: Mar 2006
Location: Chicago
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Volkswagen steps up pace of purchasing from China
Quote:
FRANKFURT -- Volkswagen aims to speed the pace of purchasing from Chinese suppliers as it slashes costs to sharpen its competitiveness, Europe's biggest carmaker said on Friday.
"The goal is to sign by the end of 2006 contracts worth $1 billion of exports to the group," a spokeswoman said.
Last June, group purchasing chief Francisco Javier Garcia Sanz told reporters VW's target was to have $1 billion in annual supplier contracts from China within three years versus around $250 million a year at that time.
VW said it also aims to have its Chinese operations buy 80 of their content locally by 2008 and to have its two joint ventures there bundle procurement.
Volkswagen is conducting a review of its in-house parts business in Germany, much of which it says is uncompetitive. Stepping up buying from low-cost China could exert pressure on staff to make cost concessions in negotiations now under way.
VW has said up to 20,000 jobs are at risk at its plants in western Germany.
In October, Volkswagen hammered out an agreement with 38 suppliers to cut purchasing costs by hundreds of millions of euros by forming more stable strategic partnerships with a smaller group of partners.
It is now working with them on improving quality.
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http://www.autonews.com/apps/pbcs.dl.../60331001/1003
Hopefully their quality goes the right direction with this move. |
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