Chrysler Parts Czar Outsourcing Like Crazy
No question: The Big 2.8's supply chain is in disarray. Plastech, Delphi, American Axle– these are just three of the U.S. parts suppliers already in bankruptcy, with fully 25 percent of other major domestic parts makers teetering on the edge of Chapter 11. The domestics are operating on the assumption that the faster they outsource their parts production overseas, the better. Speaking to Automotive News [sub] analyst John Casesa warns that Chrysler's new purchasing czar John Campi's rush to confront domestic suppliers (Plastech) and seek low cost foreign replacements may not be such a good idea– especially when seen in historical context. "In the early 1990s, former GM purchasing chief J. Ignacio Lopez proved that point. When he bid out proprietary part designs to garner the lowest prices, Lopez launched a brutal price war that created lasting animosity between GM and its suppliers. The industry is still struggling to heal the wounds." And speaking of war, does it really make sense for the domestics to combine Just in Time production and long, long supply lines in this time of crisis? As Toyota's quickly resolved Tundra problems show, it's best to keep your friends close and your suppliers closer.
More by Robert Farago
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Sounds like what happens when new owners have a "we will turn a profit or you're fired, product be damned" mentality. Plastech also has a plant near the Mercedes plant here in Alabama. They apparently supply pieces for the M/R/GL which are built here in Alabama. If Plastech folds completely that may impact Mercedes SUVs, but it probably also explains the occasional interior quality complaints on those vehicles also. I also think Chrysebrus could care less if they have the occasional work-stoppage to clear the holding lots. If they didn't they would have to intentionally anyway.
The Big 3 are always willing to promote the cars that get 25+ MPG. They are also willing to burn more fuel on ships to get those parts here to the US. Does that make them hypocrites? Having been in supply chain, this doesn't always make sense if you look at the TOTAL COST instead of just the piece cost.
Some companies should just fold and go under. Think of it as natural selection.
we just got a couple of new dodge journeys at our dealership. according to the window sticker, u.s. canadian content 35%.major sources of foreign contentis mexico at 54%,final assembly point is toluca mexico. the vehicle also has kumho tires made in china. looks like major outsourcing is already happening on this car. too bad for our american workers. this madness has to stop before there are no decent jobs left in this country!