Friday Rant: Chrysler's Minority Suppliers — What Kinds of Opportunities Are They Really Getting?

Jason recently wrote about Chrysler's continuing to hold its Matchmaker Event for minority suppliers (Chrysler May Get in Bed with Minority Suppliers, But Where's the Love for Everyone Else?). He suggested that perhaps they were getting special treatment compared to Chrysler's other suppliers, who were being asked to invest their own resources in developing new products for Chrysler without any volume guarantees, a situation that was recently reported in the WSJ and about which I wrote a post, The New Chrysler: Ask Not What Your Suppliers Can Do For You, in which I surmised that these supplier investments in Chrysler were unlikely to happen any time soon.

Before assuming that a minority matchmaker event is special treatment, I'd like to know exactly how specially these suppliers are actually being treated and how much of this event is just showboating. What percentage of the attendees really gets business from the event? And, by the way, of those who do get business, how specially are they treated once they become suppliers? Are they paid on time? How many minority suppliers to Chrysler have been put out of business by the downturn? Apparently quite a few minority automotive suppliers are out of business, if the Knight Foundation $9.5M grant is any indication. Called the New Economy Initiative (NEI), it's "an aggressive three-year economic recovery program that will help minority automotive suppliers transition to new industries”. The bankruptcy in 2008 of one of the biggest minority automotive suppliers, Plastech Engineered Products, was one of the more visible failures.

Some of my thoughts about opportunity events for minority suppliers come from my own experience as a woman-owned business. One experience with a large aerospace prime (not Boeing) highlighted some of the difficulties in trying to get in the door this way. I was referred to this big prime through the local MEP (Manufacturing Extension Partnership). Next, a team of guys flew up to Boston to our office to meet with us. They said they were very interested in doing business with us. We were then referred to the company's MWBE officer. Even though we gave him information on our company and filled out the forms, the man just didn't seem understand that we were a software company, not a cleaning service or a trash hauler. The visiting team had understood it and seemed to think their company could use our product. Why else would they have flown up to visit us, we thought? The MWBE officer was friendly, but clueless. I think our forms went into the equivalent of their dead letter office. Why the company expended the resources to fly a team up to the office and then not take any further action despite numerous attempts on our part to interact with them and get referred to the appropriate person in the buying organization was unclear. In retrospect, we were very naïve to expect to get any business this way. In the end, I assumed it was a box-checking exercise. Yep, we interviewed another MWBE business. Our company is a good citizen. Check.

I don't how many minority businesses have this type of experience. But in general I found that MWBE status might get you in the door, but not always the right door. And, it's hard to imagine that you'll become a supplier solely on the basis of this status. If they don't know you are MWBE and find out later after you become a supplier, they will be delighted to be able to check the box. But it won't get you the business, assuming that you are qualified to begin with, if you don't have some contacts in the company and know about a need already any more than blindly replying to RFPs gets you new business.

I was invited to a number of events similar to the Chrysler Matchmaker Event. For example, I had the U.S. Army inviting me yearly to their event. I didn't find MWBE a good way to get business. It seemed more like a blind date with a disinterested party and a feel-good, public-relations activity for the customers.

- Sherry Gordon

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