Auto Suppliers to Automakers: "Just Say No"

Auto Suppliers to Automakers: "Just Say No"

William Davidson is hardly a household name even in his home state of Michigan, and he’s a man of few public words so when the octogenarian billionaire, who made his fortune initially in the auto supply industry, talks, he’s worth a listen.

And his advice to other auto suppliers: Just say no to ridiculous demands by automakers.

Davidson owns a Michigan company called Guardian Industries Corp., not exactly famous in the state and even less well known outside of Michigan’s borders. The extremely successful company manufactures glass for millions of the world’s motor vehicles; the glass also goes into buildings. Estimated by Forbes Magazine to be worth $3.5 billion, Davidson also owns the Detroit Pistons NBA team, the Detroit Shock women’s basketball team, the Tampa Bay Lightening hockey team as well as The Palace of Auburn Hills where the Pistons and Shock play as well as Detroit’s preeminent entertainment center.

In an interview in Sunday’s Detroit Free Press, the 84-year-old Davidson, who made page 1 headlines by donating $75 million to build a hospital in Jerusalem, credited Guardian Industries’ success (while many auto suppliers are in bankruptcy) with just saying no, a phrase that should roll off the tongues of other auto suppliers, he said. 

“Much to my regret, I had to go negative, and I had to teach our automotive group to just plain say no. And if you want to know why the other companies are going [bust], it’s because they didn’t say no to all the really ridiculous, I call them stupid, requests [of automakers]” he said, referring to automakers’ demands for lower prices. Suppliers chase volume, not profits.

The threat of overseas competition and the unlevel playing field that exists is no excuse for automotive supply company managers to not run their own businesses properly, he said. The key is lean, cost-efficient operations and relentless focus on adding value to produce more profits, he added.

Michelle Krebs:  is Editor-in-Chief of AutoObserver.com. Follow @AutoObserver on Twitter.