The Big Squeeze

摘要

Where Will IT All End? That's the question many execu-tives at small and midsize manufac-turers are asking as they struggle to comply with mandatory price cuts. These suppliers are feeling especially pressured to cut costs as OEMs and large Tier I companies, equipped with a powerful new technology―the online reverse auction―are driving prices down to subterranean levels on everything from tires to pumps to assembled components. Critics of the forced price reductions say they arbitrarily require producers to reduce the quality of materials and parts and trim necessary labor. What's more, they complain that the painful vice-grip on suppliers not only hurts quality, but ultimately leads to plant closings as manufacturers can't afford to stay in business.