What’s holding European OEMs back?
Despite the clear advantages of deeper collaboration with suppliers, many European OEMs continue to operate within rigid, siloed frameworks that hinder progress. During the Euroguss Executive Circle podcast, the conversation dove into why European OEMs struggle to fully embrace supplier integration, even as their global competitors surge ahead.
1. Departmental Silos and Communication Gaps
Perhaps the most glaring hurdle is structural: OEMs often suffer from organizational silos. Pre-development, industrialization, and purchasing are handled by separate departments, often with poor handoff mechanisms between them.
“Every time you move from pre-development to purchasing, it’s like starting the project all over again,” said Fabian Niklas. This fragmented approach leads to misaligned goals, repeated discussions, and wasted effort. Worse still, valuable supplier input offered during the early phases is frequently not carried through to the final sourcing decision.
2. Cultural Inertia and Risk Aversion
Katrin Grebe highlighted a deeper issue, the corporate culture. Many European OEMs are bound to compliance-heavy frameworks and traditional procurement practices that prioritize short-term cost over long-term value. Even when suppliers propose smarter, more sustainable solutions, internal structures make it difficult to adopt them.
“They follow a Harvard-style process: one department hands it off to the next. There’s no flexibility, no structure for creative collaboration,” Katrin Grebe remarked. This culture of “playing it safe” often discourages the adoption of innovative models like front-loading or networked supplier teams.
3. The Disconnect between Strategic Intent and Procurement Reality
While OEM leadership may speak of agility and innovation, purchasing departments often default to old habits: focusing solely on upfront cost. This disconnect was a recurring theme in the podcast. “Purchasing talks about TCO, but in the end, it’s still the cheapest offer that wins,” said Fabian Niklas.
This tunnel vision often leads OEMs to choose low-cost suppliers from overseas, ignoring hidden costs like shipping delays, quality risks, and tooling inefficiencies that erode value over time.
4. Lack of Casting Expertise Within OEMs
Another consequence of these trends is the erosion of internal technical expertise. Katrin Grebe observed that most OEMs have significantly downsized their casting knowledge, leaving them unable to assess or optimize casting-based solutions on their own.
“They need our competence because they no longer have it,” she said bluntly. This knowledge gap makes OEMs more dependent on suppliers. Yet, paradoxically, they remain hesitant to formalize those collaborations in ways that protect and reward shared innovation.
5. A Contrast in Mindset
The podcast compellingly contrasted European OEMs with their counterparts in Asia and the U.S.. The Asian and American manufacturers are often more open, agile, and collaborative. They approach suppliers not just as vendors but as innovation partners.
“In Asia, it works. In the U.S., they adapt fast,” said Staffan Zetterström. “Rivian, for example, took two years to adopt Rheocasting. It took others five.” This mindset shift allows newer OEMs to leapfrog traditional players. By embracing partnership-based models, they gain faster time-to-market, better product quality, and more resilient supply chains.
6. The Need for Strategic Sensibility and Industry Lobbying
While the challenges are daunting, solutions are emerging. Industry forums like the Euroguss Executive Circle provide a platform for shared learning and collective advocacy. As Katrin Grebe emphasized, the goal is not to blame but to sensitize OEMs to the opportunity they are missing out on.
Moreover, these conversations must extend beyond technical circles and into executive leadership, policymaking, and public dialogue. European manufacturing needs strong lobbying efforts to support policy reform, encourage innovation adoption, and ensure the survival of local supplier networks.
Conclusion
The roadblocks to OEM-supplier collaboration are real but not insurmountable. They are in their own hands or contracts. With open dialogue, cultural change, and structural reform, European OEMs can unlock the full potential of their supplier networks. Global competition isn’t waiting, and neither should Europe.
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