Chrysler CEO to Plastech: It's Nothing Personal
Just four days after Plastech's parts embargo shut down Chrysler factories, just eight days before the two companies' interim agreement is set to expire, Chrysler's CEO is deploying the same sort of charm offensive that made him so popular at Home Depot. "This was not hard-ball tactics, it was a solid business practice," Nardelli told reporters at the Chicago Auto Show. "We never meant to create an adversarial relationship with Plastech or any other suppliers." In other words, hey, it's just business. "We have to stay competitive. Our customers expect that. Obviously if [Plastech's] not financially sound, we certainly aren't in the business of subsidizing. No hard feelings, no animosity, just solid business practices." No subsidizing eh? The Detroit Free Press reports that Chrysler resolved the Plastech missile crisis by agreeing to pay some its bills "early;" an undisclosed portion of a $23.4m early payment cash infusion. It's a dangerous precedent that could consume Chrysler's cash pile. Meanwhile, Nardelli says Chrysler will continue to remove its parts contracts from Plastech. Somebody send that man a copy of "How to Win Friends and Influence People," STAT.
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J, The attitude does seem to be better at Home Depot, but I can rarely FIND an employee anymore. Also, signage and labeling has gone from bad to non-existant.
Fascinating comments about this facedown at the excellent "View Through the Windshield" blog. Joe Sherlock, the blogger, actually owned a plastics company and knows how suppliers can get into bare-knuckles struggles with deadbeat creditors. One tidbit that started me: "New tooling is not an option here - a set of taillight molds for a particular vehicle may cost $300,000 or more. And take months to make.)" Looks like Plastech had Chrysler by the short hairs.
maycoo and decoma are the two main suppliers chrysler selected - maycoo is a joke there equipment is old and they can barely mold black parts let alone mold in color interiors - chryslers quality will go way down - decoma/magna is solid but they agreed to take parts at current pricing which is under water, how long will that last?
50Merc: In the case of the company I work for, the molds are owned by the customer (Pontiac, Subaru, Toyota, Honda, Mitsubishi, Chrysler, etc). When the company agrees to make the parts, they agree to a certain number of years in full production, then a certain number of 'owed-service' years. Even so, it takes months to get machine conditions and fit/finish issues resolved before you can enter full production, so Chrysler is blowing a lot of smoke. Anyway, I can't imagine that Plastech will lose money anywhere near the rate that Chrysler will during a work stoppage.