TROY, MI -- Neil De Koker, president of the nearly 400-member Original Equipment Suppliers Association (OESA) called for automotive industry executives to work together to focus on reducing industry warranty costs. In a brief address to attendees of the Management Briefing Seminars, De Koker announced that OESA has created a Warranty Management Council, tasked with developing recommendations to reduce warranty costs.

According to Warranty Week, the industry spent $11.5 billion on warranty claims in 2004. OESA proposes that it is the responsibility of both suppliers and car companies to aggressively attack warranty and other non-value added costs.

"We heard from speakers today who tell us that the next two years will require significant and extreme action to maintain profitability," De Koker stated. "It is imperative that members of the industry collaborate to reduce warranty costs to keep companies competitive.

"OESA proposes that suppliers work with the car companies and each other, to provide insight into best practices that can reduce warranty costs," De Koker added. "The objective of this OESA group is to share best practices that reduce warranty costs for the benefit of the entire industry."

OESA anticipates releasing a publication that outlines a process the automotive value chain should consider to systematically reduce warranty potential during product development. Through this activity, suppliers exchange experiences working with various OEM warranty systems and collectively increase individual company knowledge.

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