Toyota, together with Air Liquide and CaetanoBus for the development of hydrogen mobility

Toyota

Toyota Motor Europe, Air Liquide and CaetanoBus formalize the new memorandum of understanding which aims at the development of integrated hydrogen solutions. The objectives will include the development of specific infrastructures and fleets of vehicles to accelerate the spread of hydrogen mobility not only for cars but also for heavy vehicles.

This type of partnership is essential to create efficient ecosystems that will foster the emergence of hydrogen mobility in Europe. This partnership testifies to the industry's ability to bring concrete solutions in the fight against climate change, commented Matthieu Giard, vice president and member of the Executive Committee of Air Liquide.



Not surprisingly, the partnership between the companies was born not only in order to make a contribution to the decarbonisation of transport but also to increase the development of local hydrogen ecosystems linked to mobility. According to what has been published, Air Liquide, CaetanoBus and Toyota Motor Europe will commit themselves using all their complementary skills aimed at managing the hydrogen mobility supply chain, starting with the production of renewable or low-carbon hydrogen and the creation of distribution infrastructures and refueling.

We are excited about the opportunity to join forces to expand the development of hydrogen ecosystems. Toyota's role is to bring hydrogen applications into the ecosystem. Working together with our partners, we want to accelerate and intensify the use of hydrogen as a zero-emission solution for mobility. This will gradually reduce the costs of hydrogen and related infrastructure, while improving the business model of many future applications, including mobility, said Matt Harrison, president and CEO of Toyota Motor Europe.| ); }
It is a great pleasure to work on hydrogen projects with these partners and have the opportunity to strengthen the role of new forms of energy in the pursuit of a sustainable lifestyle. If we can do this through partnerships, in order to create a complete ecosystem, it's even better, because energy transitions are only effective with true alignment between companies, countries and policies.

---

Toyota, Honda finish 1-2; General Motors finishes at 3rd in annual Supplier Working Relations Study

DETROIT, May 23, 2022 /PRNewswire/ -- Results of the 22nd annual North American Automotive OEM - Supplier Working Relations Index® (WRI®) Study were released today by Plante Moran. The study shows in spite of supply chain shortages and production volatility, transition pains to electric vehicles, logistics constraints, and increasing raw material costs impacting automakers and suppliers, two of the six major U.S. OEMs made substantial improvement in their WRI® scores and two held steady, while two others fell – one significantly.

Toyota, in the top position, dropped 2 points to 345, while Honda gained 18 points and rose to 334, narrowing the gap between first and second to 11 points. GM fell 2 points to 287, maintaining its gap to Toyota while increasing its lead over Ford as Ford fell 7 points to 242. Nissan improved 8 points to 219, closing in on the top four OEMs. Stellantis dropped 42 points to 128 (see Figure 1).

Most improved overall this year were Honda and Nissan. The spread from highest (Toyota 345) to lowest (Stellantis 128) was 217 points, the greatest since 2008 spread of 206 between the same two automakers. But the numbers don't tell the whole story.

'The industry was hit with unprecedented challenges this past year that created tensions with suppliers that will only get worse if they're not resolved,' said Dave Andrea, Principal in Plante Moran's Strategy and Automotive & Mobility Consulting Practice, which conducts the annual study. 'Combine the supply chain disruptions with the accelerating shift to EVs that will negatively impact many suppliers, and OEM supplier relations could become unnecessarily strained unless this transition is handled in an open and honest manner.'

TRUST AND TIMELY COMMUNICATION KEY

The key to mutual success in OEM-supplier relations is trust, said Andrea, and trust is based on three factors: setting realistic expectations; delivering on commitments; and sharing information. 

Trust goes both ways, he said.  'Companies get out what they put in. In the new world of scarce resources with numerous customer opportunities, the supplier has to ask himself:  who would I rather do business with, my customer of choice? And the answer comes down to three questions: Who do I trust? Where will I get the best return on investment? And, what is the prospect for future business? And the OEMs are equally dependent on suppliers they can trust.'

'The OEMs really need to focus on more transparency and better communication. They need to better align purchasing, engineering, and manufacturing to achieve the same goals – improved communication, efficiency and speed – in order to take cost and time out of the entire supply chain while helping suppliers achieve their cost and financial performance goals as well. These processes must become more agile and streamlined to benefit both the OEM and supplier. If done property, it's win-win, and setting realistic goals, fulfilling commitments, and sharing information openly and honestly doesn't cost any money.'

FASTER RESOLUTION OF ISSUES

Andrea listed areas of on-going concern to suppliers that could be resolved if given priority and if resolved would greatly benefit both the suppliers and the automakers. They include:  

Eliminating lengthy delays on piece part and tooling price disputes: This year showed there is likely to be more, not fewer, price disputes. These will require better methods to close disputes more quickly to enable OEMs and suppliers to understand cash flow implications and deal with production and launch issues. Key issue: the need for local autonomy and decision making to speed the process.

Handling volatile production schedules: Supply chain shortages, as well as emerging build-to-order strategies, will require new capabilities to make long-term contracts and production release systems accommodate more flexible production. Key issue: Purchasing contracts and production scheduling need to align with 'war room production optimization' decisions.

Sharing price and other market risks: Volatile market conditions for both common and more exotic materials such as lithium, cobalt, etc., increase risk for both parties and are taxing conventional contractual processes and traditional industry practices such as the annual 'productivity' ask. Key issue: Misalignment between purchasing, finance, logistics, manufacturing, and other functions that creates friction rather than minimizing risk.

Developing bench strength: High turnover among OEM purchasing staffs and buyers cause unnecessary delays in decision-making, approvals, and changes requiring other OEM function buy-in. Key issue: executive rotation may have unintended consequences when decisions are required so frequently that knowledge and familiarity outweigh the risk of 'being too friendly.'

Recognizing supplier relations is everyone's responsibility: OEMs that increased or maintained their WRI scores in the chaos of 2021 had the cooperation of engineering to support material substitution, finance to support constrained cash flows, and manufacturing to accommodate required logistics patterns. Key issue: supplier relations is not the responsibility of only purchasing. Like quality, it is 'everyone's' job, and poor supplier relations often indicates structural and process problems at the OEM.

'All of these typical problems can be resolved',' said Andrea. 'Look how fast and successfully automakers switched to the production of Covid face masks and respirators. When there's corporate commitment, things get done – fast. These are not complicated issues. And if resolved, the automakers will be more profitable, improve vehicle launches, reduce warranty claims and recalls, and better positioned to transition to EVs.'   

The WRI is important because it measures the OEM purchasing organization's capacity and capability not only to handle day-to-day business, but also their ability to respond to unexpected market disruptions like those faced by automakers this past year. The OEM buyer is on the front line here, but so is the supplier.     

HONDA EXCELS IN PURCHASING EFFECTIVENESS

Honda built its gains on 'purchasing effectiveness' which involves timely communi-cation, resolving issues, and buyer accessibility among other characteristics shown in Table 1. In Overall OEM Purchasing Organization Effectiveness Honda lead in six of the seven categories with a composite average score of 3.45. Toyota remained in second, tying its last year score of 3.30; GM dropped slightly but remained in third place with 3.20; Ford remained in fourth at 2.86. Nissan was up slightly at 2.79; and Stellantis dropped significantly to 2.23.  

In additional detail behind the Purchasing Organization Effectiveness factors, suppliers identified Honda's gain came with buyer improvements in commercial knowledge, communication of business strategy, and buyer accessibility. Toyota buyers dropped slightly in timely communication, resolving unanticipated material cost increases, and buyer knowledge. Toyota offset these dips with small gains in effective involvement in product development, resolving tooling payment issues, and buyer effectiveness in resolving issues. GM buyers fell slightly in three key areas: knowledge of supplier products and services, sharing information in a timely manner, and timely resolution of issues. Ford buyers dropped significantly in commercial knowledge, sharing long-term purchasing strategy, and timely resolution of issues. And Nissan gained in three areas:  buyer commercial knowledge, sharing OEM's strategy, and integrity.

'The automakers will have to continue building on these fundamentals to survive near-term parts shortages like the scarcity of microchips, and truly deepen supplier relations to support the transition to electric vehicles which could involve taking more technologies in-house, making new acquisitions or forming partnerships to gain technical capability or to manufacture parts and components. These industry challenges put more pressure suppliers and on OEMs to respond and resolve issues faster.'

WRI CORNERSTONE: OEM-SUPPLIER TRUST AND COMMUNICATION

The Study has shown the cornerstone of good working relations to be trust and communication, particularly important factors in the current uncertain business environment with billions of dollars and thousands of jobs at stake. Figure 2 shows Trust of the company in general, and substantial gains for Honda and Nissan with Ford down slightly and Stellantis down substantially.   Note how the Trust rankings track the overall WRI rankings.

Figure 3 show supplier trust of the Buyer where Nissan, Honda and Toyota made gains. Off a significant gain in 2021, GM was down in 2022 but is still rated above its 2020 level. Ford has been down each year since 2020, while Stellantis was also down significantly.

BUYERS PLAY A KEY ROLE

Continuing the focus on the key role of buyers in the overall WRI score, the Buyer Characteristics Index (see Figure 4) specifically ranks their performance. The BCI™ focuses on key attributes such as the buyer's knowledge, communication, and overall working characteristics such as integrity and trust. Organizational changes can affect this measure, as does the pressure of the changing business environment. Even so, Honda and Toyota were ranked one and two and are improving, while GM was in third place and trending down. There was a significant gap to the next group of Ford and Nissan, with Ford trending significantly downward and Nissan on the upswing. 'The buyers, while always on the front line, play an essential role in improving communication frequency, transparency and accuracy',' said Andrea.

PURCHASING AREA WRI®

The rankings in the overall WRI® provide high-level insight, but the study also delves deeply into OEMs' specific purchasing areas. By examining each specific area, management can determine where improvements are needed. As shown in Table 2 above, Toyota ranks best in five of the eight specific purchasing areas, with Honda best in the other three. It is especially noteworthy that in the two most important areas going forward -- autonomous vehicles and EVs -- Toyota ranked highest in EV & Hybrid Powertrain and in Electrical & Electronics.

For years, Toyota has led the industry in supplier relations. As Table 3 shows, Toyota was first in three of four indexes – but Honda is moving up. Toyota is also the automaker that suppliers prefer to work with, and receives the benefits that go with that preference. But Toyota's WRI line has essentially been flat since 2015. That could change, with Honda showing new commitment to improving its WRI ranking, said Andrea.

About the Working Relations Index® StudyNow in its 22nd year, the 2022 North American Automotive OEM-Tier 1 Supplier Working Relations Index® Study was conducted by Plante Moran from mid-February to mid-April. Respondents are salespersons from Tier-1 suppliers serving the Top 3 Detroit and Top 3 Japanese automakers. The annual study tracks supplier perceptions of working relations with their automaker customers in which they rate them across the eight major purchasing areas broken down into 20 commodity areas. The results of the study are used to calculate the WRI® which can then be used to calculate the economic value of working relations based on a proprietary economic model.

Respondents were 673 salespersons from 436 Tier-1 suppliers, representing about 50% of the six OEMs' annual buy. The sales personnel provided data on 2,226 buying situations (e.g., supplying brake systems to Ford, tires to Toyota, seats to GM). Demographically, the supplier-respondents represent 41 of the Top 50 NA suppliers and 71 of the Top 100 NA suppliers.

The study was founded in 2001 by Dr. John Henke, CEO of Planning Perspectives, Inc., and acquired by Plante Moran in 2019. The study is watched carefully by automakers because their supplier relations rating on the Working Relations Index® (WRI®) is highly correlated to the benefits that the OEM receives from its suppliers, including better pricing, more investment in innovation and technology, more sharing of technology, and better supplier support, all of which contribute to the OEM's operating profit and competitive strength.

About Plante Moran: Recognized as a leader in automotive and mobility strategy, Plante Moran is among the nation's largest accounting, tax and consulting firms and provides a full line of services to organizations across many industry segments. Plante Moran is among the nation's largest accounting, tax, consulting, and wealth management firms and provides a full line of business analytics and data management services to private and public sector organizations. Plante Moran has a staff of more than 3,300 professionals throughout the United States with international offices in Shanghai, China; Monterrey, Mexico; Mumbai, India; and Tokyo, Japan. Plante Moran has been recognized by a number of organizations, including Fortune magazine, as one of the country's best places to work. For more information, visit plantemoran.com.

View original content to download multimedia:https://www.prnewswire.com/news-releases/toyota-honda-finish-1-2-general-motors-finishes-at-3rd-in-annual-supplier-working-relations-study-301552440.html

SOURCE Hedge & Co.