Chrysler May Get in Bed With Minority Suppliers, But Where's the Love for Everyone Else?

Even though I've been won over to becoming a supporter of supplier diversity issues where non-Federal reporting/contracting is involved, I find it especially ironic that Chrysler, which still has generally abysmal supplier relationships, is singling out minority groups for specific programs. Seriously, this is an organization which just a week or two ago once again angered its supply base and garnered front page ink in the Wall Street Journal by introducing new initiatives requiring suppliers to make upfront investments in programs with no volume guarantees on the back-end.

According to the Journal story, for Chrysler's new programs, "One of the biggest hurdles is persuading suppliers to spend money up front to develop and make parts for the new models ... Some smaller suppliers that are under financial strain themselves are hesitating because they are unsure whether the vehicles will sell in high enough volumes for them to make money." Specifically, "in most cases ... Chrysler is declining to guarantee certain production volumes, a change from what it and other car makers have typically done."

If anyone can tell me why it's OK to single out minority suppliers for special treatment while simultaneously making life more difficult for everyone else, I'm all ears (and I say this as a supporter of supplier diversity initiatives). In my view, Chrysler is in no position to play favorites of any sort right now given how poorly it has treated its broader supply base in the past -- and continues to treat them to this day. If I were standing in Chrysler's shoes, I'd focus on temporarily scaling back supplier diversity programs in favor of defining a new supplier relationship management strategy focused around developing better and more strategic relationships across the supply chain. Coming from an organization that has had to idle plants in the not-to-distant past because of supply disruptions at bankrupt suppliers, Chrysler has far larger Spend Management priorities to tackle than diversity photo ops and minority spend reporting.

Jason Busch

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