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Comment by Kliment | Hacker News Reader

That's not the case here - the case is that they are big and powerful enough to bully suppliers so that suppliers assume a lot of the risks that any normal-sized company with fewer political connections would have to assume itself.

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From your original comment I gathered that they "will pay literally anything" for you to swap the mask in your remaining 100 slots. That sounds to me like regular free market-enabled bullying.

Are you saying it's a different kind of bullying? What makes it different? You original comment really piqued my desire to understand this.

Customized car parts are often a major part of a subvendor's revenue, but they are stuck in a monopsony situation - nobody but audi will buy an audi rear seat height adjustment lever. The market power of large automakers mean that they can very quickly become the primary revenue source of a small vendor, and there's no collective action that various vendors can take against the automaker. The automaker can then get away with conditions like having the vendor pay massive penalties for not delivering a number of parts within a 15 minute time window, changing delivery volumes on short notice, or payment terms where they pay for parts months and sometimes years after they are delivered, and the vendor has to sit on their costs in the meantime. The vendor can't afford to lose the automaker as a customer, but they also can't afford to have enough margin to swallow a back-and-forth variation in demand without adjusting production volumes. In this case, the automakers ended up in a tight spot because they had fucked over all their vendors in this way simultaneously, and so ended up in a situation where their production lines were literally standing still because the vendors could not deliver as they had just finished adjusting to the previous change. This is when the automakers shifted to offering way-above-market money for product, because the alternative was massive losses from stuck production lines.

Oh. You're saying they normally wouldn't pay the cost of the mask change, only say to their vendors "do it and absorb the cost or we'll pull our business?"

I'm curious to compare automakers vs Apple.

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