GM's CEO Mary Barra says quality is the company's top consideration, but suppliers are saying GM and other automakers are focused more on cost.

During a widely attended speech this week, General Motors CEO Mary Barra said the automaker is intent on “raising the bar” on safety and quality – but is that aggressive push by GM and its competitors really having the desired affect on their corporate cultures? Automotive suppliers are saying it isn’t.

A recent survey of suppliers says that cost is beginning to be the biggest driver in its dealing with makers – at the expense of quality and potentially safety.

IHS Automotive’s SuRe Index suggests that the relationships between automakers and their suppliers are worsening, in some measure because they don’t see eye-to-eye on how to improve the quality of cars and trucks, which has been a recurrent theme in the history of the parties.

However, after recalling more than 30 million cars this year and having its executives lambasted in several high-profile Congressional hearings, GM has been touting its efforts to change its corporate culture from one focused on costs and profits to one working to ensure the safety and satisfaction of its customers.

During a brief news conference afte the speech, Barra said that the company has taken major steps to address the issues that led to the sweeping safety problems that caused the recalls and forced the automaker to set up a $600 million fund for victims of its faulty ignition switches.

The objective is to build a “zero defect culture” inside GM, she said. “We’re very focused on protecting the customers. I think we have a very good system and if we have an issue, we’re finding it very quickly.”

However, that doesn’t appear to be the practice with suppliers. The companies surveyed indicated that all carmakers, except Subaru and a few Chinese manufacturers, have actually become more lenient with regard to quality, in terms of PPM levels, testing and product or process validation.

The renewed focus on cost is impacting quality, they claim. For most automakers, such as Volkswagen, Fiat Chrysler, Ford, GM and Renault, cost pressures on the supply base are increasingly overriding quality performance that these OEMs require of their suppliers. One supplier put it bluntly: “it’s all about cost – Is Purchasing or Engineering leading quality?”

“With few exceptions, even the best performing carmakers have become more stringent on controlling costs in 2014, signaling a general shift for the OEMs towards greater cost focus and more aggressive ways to capitalize on their negotiation leverage with suppliers,” the research firm notes.

(No room for complacency, says GM CEO Barra. For more, Click Here.)

While automakers pressuring suppliers to cut costs is a well-worn tale in the industry, it’s particularly alarming because it was precisely this type of trade off – cost over quality – that led to GM’s issues with its faulty ignition switch, which is now attributable to the deaths of 30 people and injuries to 31 others.

(Click Here for details about Fiat Chrysler’s earnings and plans to spin off Ferrari.)

To compound matters, the issue is getting worse, not better with several suppliers noting that automakers are bringing back some contentious methods for extracting savings, such as setting annual price reduction targets, which they deem unsustainable.

“While the standard annual price reduction in the industry hovers around 2% to 3%, it is not uncommon for OEMs to request cuts of 5% year-over-year, and in some extreme cases, as much as 10%,” IHS reports.

(GM top-ranked domestic maker in Consumer Reports quality survey. To see how all the companies did, Click Here.)

Suppliers seem to accept the notion that they have to find innovative ways to generate savings on a year-over-year basis, however, they find it difficult to accept that they receive little or no support from the OEMs in doing so. This lack of support often results in strained relations between the two parties, therefore resulting in lower ratings in the survey, the firm reports.

Overall index ratings have decreased on average by 2.6% on average since 2013. The SuRe index is based on automotive suppliers’ ratings of 29 criteria, allocated across five categories: Profit Potential, Organization, Outlook, Trust and Pursuit of Excellence in 2014.