Wild Ass Rumor of the Day: Supplier Revolt Leading to Chrysler Bankruptcy

Robert Farago
by Robert Farago
wild ass rumor of the day supplier revolt leading to chrysler bankruptcy

It seems as if our concerns about a Chrysler supplier "run on the bank" scenario– whereby the company's suppliers would demand cash-on-the-nail for goods and services rendered, throwing Chrysler into bankruptcy– are not without foundation. TTAC's Deep Throat has been making some calls. There are rumblings amongst the automaker's financially unstable suppliers. Something along the lines of "If we're going down, we're all going down together." Chrysler has been hammering its suppliers on price for years. And then outsourcing anyway. The company's decision to cancel Plastech's contract hasn't made The Crisis Corporation any friends. (Chrysler CEO Bob Nardelli isn't exactly known for that skill.) DT says it could be the tipping point. If and when the run happens, Chrysler will go down in a matter of days. The good news? Ford and GM will get a significant sales boost just when they need it most.

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  • Redbarchetta Redbarchetta on Feb 04, 2008
    oboylepr Does that sort of nasty supplier relationship just happen with Detroit or also with the imports? From the way you described it this sounds like one of the many reasons their cars have been sh*t for so long. It amazes me how they cause a problem and later on don't even realize or rectify what they have done to cause it, over and over and over. If these guys are still doing this crap how could their cars possibly be any better, sounds like they are getting worse to me. You guys are much more patient than myself and some of the firms I have worked for and currently work for. We have told a good few abusive clients to blatantly f*ck off and that we didn't want their business. It's not worth our time and talent to deal with clients like that. And they are usually cheap asses who never want to pay the full fee, like they should get a discount for dragging our ass over the coals due to their own incompetence.

  • Bleach Bleach on Feb 04, 2008

    oboylepr, You can add reminders in those meetings of how much the OEM's still have not paid yet and how much they are not going to pay because of the supplier "screwup". Extortionists to the end. Redbarchetta, This type of supplier relationship has been pretty much a Detroit thing. That's not to say Toyota's a saint but compared to GM and Chrysler, suppliers would prefer to have Toyota as the client. As for how you would deal with a bad client, I completely agree but it's just not possible in this industry. Every supplier wants to or has been advised to work with the imports but there is simply not enough business to go around.

  • Windswords Windswords on Feb 05, 2008

    It wasn't always this way: http://www.allpar.com/corporate/score.html http://www.allpar.com/corporate/stallkamp.html Alas, Stallkamp resigned (probably under pressure) and SCORE was scrapped after Dailer took over.

  • Duncan36 Duncan36 on Feb 06, 2008

    Sounds about right I knew a guy who worked at a GM assembly plant. There was a deep recessed area in the floor and a car fell into it. It sat there for the entire time he worked there because it was the kind of place where if you did anything about it you would be blamed for the car ending up there. He said it was totally insane, supervisors and workers went about their job for months with a freaking car in a hole in the middle of the plant acting like it didnt exist. The emperor has no clothes at GM. Those supply managers screaming their heads off at the supplier are not bad people, they're screaming to keep their jobs. If they admit any error and take a loss they will get pushed sideways or phased out. Blame the culture the toxic culture thats developed there which is ultimately a management issue.