Suppliers Opt Out Of Chrysler's Product Revolution
Any hippie will tell you what Chrysler is finding out as it tries to kick-start its product development to life: karma’s a bitch. In the pre-bailout era, Old ChryCo held the dubious distinction of having the worst supplier relations in Detroit. Now, for some odd reason, suppliers aren’t wanting to shoulder the cost of developing components for new Chrysler vehicles. The Wall Street Journal reports Chrysler isn’t making any production volume promises for future products (an ominous sign in its own right), which means cash-strapped suppliers aren’t rushing in to spend their money developing parts. “Why would we want to tie ourselves to Chrysler when GM and Ford are a known factor?” asks one interior-component supplier. “We’re already financially strapped so we have to be more choosey in where we will spend our money.” Meanwhile, this supplier recalcitrance is making it hard for Chrysler to plan anything.
Chrysler’s board of directors is waiting on Fiat CEO Sergio Marchionne to present future product plans for the US market, but with no help forthcoming from suppliers, well…
It is unclear whether the board will be able to approve the five-year product plan at this point, however, because Mr. Marchionne’s management team is still trying to work out many of the details of how Chrysler would build the vehicles
Recent estimates show that as much as 60 percent of all auto R&D could be done by suppliers by 2012. Chrysler’s going to have to fix this problem at some point, and until it does its BoD will be waiting impatiently.
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