Chrysler Pisses Away $7.7m on Parts Oursourcing Scheme

by Edward Niedermeyer

Published: September 8th, 2008

chrysler pisses away 7 7m on parts oursourcing scheme

Supplier relations in Detroit continue to take a beating, thanks to the OEM’s insistence that parts makers can simultaneously cut costs and deliver higher quality. And nowhere has that strategy been so fully embraced and/or embarrassingly revealed as a pipe dream than at Chrysler. Under the Cerburian fist of John “ win-win proposition” Campi, Chrysler has squeezed suppliers into bankruptcy while continuing to rank at or near the bottom of most quality ratings. And now it seems the Campi-led attempts to squeeze money from nothing (and his chicks for free) have conjured-up yet another egg on the Pentastar’s face. Automotive News [sub] reports that Chrysler paid consulting firm Accenture “at least” $7.7m as part of its “Project Magellan” aimed at uncovering $900m in savings by identifying suppliers in India and China. But Chrysler “saw virtually no savings,” from the project. An enraged Campi is suing the Arthur Anderson spin-off, claiming “Accenture demonstrated virtually no experience in identifying low-cost-country suppliers for the automotive business and had no knowledge of the supply base in China or South America.” So why did Chrysler pay Accenture in full for services rendered? Since Campi took over after Project Magellan fell apart, he couldn’t answer that question. How about this one: Why should our tax money be used for low-interest loans to automakers to create U.S. jobs when these same automakers are so damn busy outsourcing jobs to Mexico, Canada, China, South America, etc.?

Edward Niedermeyer

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JK43123 on Sep 09, 2008
How about this one: Why should our tax money be used for low-interest loans to automakers to create U.S. jobs when these same automakers are so damn busy outsourcing jobs to Mexico, Canada, China, South America, etc.? Exactly. The big 2.76 want to be "global" but expect the American taxpayer to bail them out. John

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Sajeev Mehta on Sep 09, 2008
John Horner : One of the many common corporate sicknesses is the hiring of expensive consulting firms to do the work the company’s executives and managers should be doing for themselves. Most of these consulting firms are chock full of 20 something recent college graduates working 80 or more hours a week, but completely lacking the skills, experience and judgment to work smart. But, that is OK because these kids are paid less than a third of what they are billed to the client at … so rack up the hours! Truer words/never spoken/etc...I had to work with Accenture and Deloitte for IT implementations and both were colossal failures. Even worse, they were ignorant and cocky. No surprise that Chrysler would hire them. Maybe Accenture is responsible for Chrysler's terrible interiors too!

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HarveyBirdman on Sep 09, 2008
Morea, you missed the best part! Campi has more than 35 years of experience in the sourcing industry. Before joining Chrysler, he was President and CEO of Genesis Consulting Group, a company he founded. From his bio at Chrysler's website. Ah, the irony of a former consultant getting screwed over by a consulting company. He shoulda known better.

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Nick on Sep 09, 2008

John Horner, I absolutely whole heartedly agree. I was one of those 20-somethings (well, I was 30 something) and your summary is accurate. The partner I worked for had never worked in the industry he specialized in. Not one day. He graduated from engineering, got his masters at MIT, and went straight into consulting. I at least had worked in the industry for five years. I had a pretty commonplace job in the industry before joining the consulting firm, and when I talked to the partner about my previous job, it was obvious he had no idea what the job entailed. Big consulting companies routinely receive handsome fees for consulting in areas in which they have no experience and of which they have no knowledge.

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