Chrysler Tells Its American Suppliers to Leave the U.S.
Chrysler's told its suppliers to cut their prices by 25 percent and get the Hell out of Dodge. ChryCo Purchasing Czar John Campi unveiled his employer's latest supplier initiative to hundreds of Chrysler suppliers. Here the deal [via Automotive News, sub]… ChryCo promises to give its suppliers 30 days' notice of its production schedule (rather than seven), share more parts among nameplates, and reduce late engineering changes. Suppliers will split the savings with Chrysler– unless they fail to reduce component costs by 25 percent. If not, they'll have to cut prices and eat the loss. (The 25 percent reduction benchmark applies to parts both old and new.) With "the vast majority" of Chrysler components coming from America, Campi is encouraging suppliers to move operations overseas to facilitate the costs. Holy shit! It's bad enough that Chrysler's driving itself into the ground, but owners Cerberus seem hell-bent on taking its entire American supply chain down with it. You can't squeeze blood from a stone; with the price of nearly every raw material rising, Chrysler's audacious cost-cutting will only yield more bankruptcies. And lower quality products. And American job losses. This will not make Chrysler any friends when it hits the bankruptcy buffers, nor should it.