supplier sentiment remained flat this month as delays in new
vehicle program launches, Europes recession and the
impact of federal budget sequestration held any optimism in
check, according to the latest survey from the Original
Equipment Suppliers Association (OESA).
The automotive supplier
barometer sentiment index was put at 55, unchanged from
Januarys survey but 9 points below March 2012, according
to Troy, Mich.-based OESA, which surveyed 102 companies.
Still, increasing vehicle sales
and production levelsand stable growth in bothare
encouraging for Tier I and II suppliers despite the economic
headwinds, said Dave Andrea, OESA senior vice president and
director of industry analysis and economics.
"We are still concerned about
how much investment to make," one survey respondent said. "Are
we still growing as an industry or getting near the top of the
To meet current demand for
parts, components and subassemblies, suppliers are creatively
applying alternative work schedules. Sixty-three percent of
responding companies said they are running alternative
schedules: three-shift operations, four 10-hour shifts, 12-hour
daily shifts, 24/7 operations or overtime schedules.
One company said it has added
Saturday shifts to accommodate additional volume, while several
others said they were running seven days a week with 10- or
12-hour shifts. One 24/7 operator said he is still adding
"We run three crews, but that is
to match our customers (production). We do not quote
business on an overtime basis unless the customer asks us to.
Then we absolutely communicate it to our customers about that
assumption to protect us if volumes change," another survey
"We run what we have to in some
cases. In others, we run what is most cost-effective for us and
that is transparent to the customer," a third respondent
One respondent said he had to
outsource tooling to other suppliers and his employees are
still working overtime.
As a result, companies are
spending more on hourly and salaried labor. One company
reported that it is offering premiums to shift workers who
volunteer to add hours to their schedules.