For years we've been reading and writing about the close relationships that have developed between distributors and end users. Buyers tell us they're willing to pay for value-added services and want to "partner" with their distributors. Price, they say, is not the most important determining factor in selecting a distributor. Instead, these buyers are looking at total cost of procurement. And we've also been told that they want their distributors to be financially strong.

That may be true for some buyers, but actions, as Grandma Keough used to say, speak a lot louder than words.

Take the recent decision by DaimlerChrysler to order 900 suppliers to reduce their prices by five percent, regardless of previously negotiated contracts. The cuts took effect on Jan. 1st. So much for living up to contractual obligations. In fact, Chrysler officials said the reductions were non-negotiable. I wonder what would have happened if suppliers had increased their costs by five percent. Would the automaker have chastened the suppliers for not living up to the previously negotiated price? What do you think?

Does Chrysler really believe that suppliers were making that much money with them to begin with? And has Chrysler really looked at their own internal operations to reduce costs before they seek regressive cuts from their suppliers? So much for partnering.

That's not all. A second phase of the cost cutting will occur over the next two years. Suppliers will be expected to cut their prices by another 10 percent. The initial five percent will be direct from the suppliers' bottom line, while DaimlerChrysler says it will work with suppliers to reduce costs in the second phase.

It will be interesting to see how suppliers react to this decision. We've interviewed distributors in the past that have actually walked away from doing business with automakers because of their demand for price reductions. "It wasn't worth our time and investment," one distributor told us.

"The real question is whether suppliers will have the backbone, will they cave in to Chrysler?" Bear Stearns & Company analyst Eric Goldstein told a Detroit newspaper. "We'll see how badly Chrysler wants to bankrupt its supplier base."

The decision by the automaker is bound to have repercussions. We'll keep you posted.