Chrysler: Tossing in the Towel for Two Weeks

I don't know about you, but does anyone else find it odd that Purchasing -- or anyone else, for that matter -- did not further analyze Chrysler's decision to shut down for two weeks this summer? According to the above-linked article, "Chrysler announced it will shut all but its most essential operations worldwide for two weeks in July as the struggling U.S. automaker intensifies attempts to cut costs and preserve cash." To this I might suggest that rather than just shutter the doors for two weeks, why not shut down entirely? If Chrysler can't sell enough cars -- which no one calls out in the article -- to keep its factories full, then they've got a far greater problem than a two week shutdown will solve. And besides the impact such an action will have on Chryslers' own team members, consider the impact on suppliers, who will also be forced to either close their doors for a forced vacation or greatly cut back production.

In my view, this announcement could not come at a worse time for Chrysler, an OEM who desperately needs to improve its supplier relationship. Seriously, stopping orders for a forced period of time isn't exactly a step to getting closer to your supply base. Instead of shuttering its doors to save cash, Chrysler should take decisive actions to eliminate unprofitable or underperforming platforms and to find new ways to partner with suppliers to further reduce costs (most likely in the design phase). Closing the doors for 2 weeks feels like a complete half-assed business decision to me. And it will go nowhere to helping the provider rebuild its supplier relationships. If I were in Chrysler's supply chain, I'd take this as further evidence of needing to shift my business to other OEMs.

- Jason Busch

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