By on January 19, 2010

Training day? (courtesy:scoop.chrysler.com)

A strong team is only as good as its weakest link, particularly in the automotive industry. Treat your suppliers well and they’ll play fair by you. Try to screw them and they’ll collapse leaving you with serious production problems. Detroit (Chrysler in particular) had the worst reputation for treating their suppliers badly, but the Pentastar brand now claims to be trying to change all that.


Crainsdetroit.com
reports that Chrysler LLC is reaching out to suppliers, by speeding up payments for some engineering, design and development work. This is an effort to repair the bad relationships Chrysler have with their suppliers. However, a quick look at the small print shows a different picture. This new vision will apply mainly to the new compact and mid-sized cars based on a Fiat platform. It seems that Chrysler so want (or need) the Fiat based cars to work that they want nothing to screw it up and that includes annoying their suppliers. “It’s no fun to work in a business where you’re fighting your supply base,” Dan Knott, Chrysler head of purchasing, “We need a healthy supply base.”. Really? Wow! If only companies like Toyota knew that, maybe they could become the biggest car company in the world(!)

Some of the new directives under this agreement include: Paying some suppliers upfront for costly advance engineering, design and development work on certain new Chrysler programs. Resolving outstanding payment claims faster. Paying suppliers in chunks at predetermined milestones in the life of the program. Mind you, the report does reveal a tasty fact.

Daimler AG scrapped a popular Chrysler program known as SCORE, instituted by onetime purchasing boss Tom Stallkamp, that shared cost savings with suppliers.

The new policies will be in effect by the end of January.

Meanwhile, the Wall Street Journal reports that because Honda have an established presence in emerging markets as a motorcycle producer, Honda want to use that network to find suppliers for their global small car platforms for emerging markets. The rationale behind this is to keep costs down. Honda CEO, Takanobu Ito, said that these supply chain efforts were part of its efforts to counter a competitive marketplace which he described as “fierce”. Mr Ito also said that they were looking for supplier partners in Brazil and China.

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8 Comments on “Supplies! Chrysler Claims To Have Turned Over A New Leaf...”


  • avatar
    Disaster

    You are talking about the suppliers they haven’t already helped put out of business. Next there will be a dealer training week.

    • 0 avatar
      AccAzda

      HERE HERE!!!

      How many times have I heard how Chrysler is 90 days behind on payments…

      Ive heard 3-9months behind..

      And NOW all of a sudden they are current and want to be buddy buddy…  with their suppliers. I think thats a HUGE crock of shit… but thats just me.

      P.S
      These are the same people screwing dealers left and right for a dozen different reasons, everything from what they sell, Chrysler only, vs everything Chrysler / Chrapsler / Fiatsler sells (Jeep, Dodge, RAM ((HAHAHAHA)) and Chrapsler, to how much they get FORCED to take, and thent here is the floorplan financing and general morale of the company, on top of the constant need to use rebates/ploys.. to sell a car (higher than the great majority).

      What a joke.

  • avatar
    CyCarConsulting

    When a corporation such as Chrysler is controlled by Wall Street, (for decades) the overall operating systems fail. To keep the stock holders happy with short term gains, a low volume of employees is one key way to hold down costs.  The article above displays the shortcomings of such thinking.

  • avatar
    Bergwerk

    Yet another example of the damage that Daimler did…

  • avatar
    carguy

    Nice “Kentucky Fried Movie” reference in the headline.

  • avatar
    thekid

    Overheard at Chrysler HQ last year…
    Q: Where are we going to find the money for an extravagant Super Bowl ad that lets everyone know we are still alive?
    A: Let’s cut the dealer training week back to only three days.  Nobody will even notice!
    Even with the benefit of measuring against a work week, 3 out of 5 is still 60%.  That may have been a D+ in school, but in today’s auto marketplace – FAIL.

  • avatar
    Geo. Levecque

    Heard somewhere today that 201o Chrysler vehicles are under a large Recall, for one thing I didn’t think they had any new vehicles, what’s up?

  • avatar
    windswords

    “Daimler AG scrapped a popular Chrysler program known as SCORE, instituted by onetime purchasing boss Tom Stallkamp, that shared cost savings with suppliers.”

    And that in a nutshell is it. During the 1990’s Chrysler was rated BY THE SUPPLIERS, as the best company to work with. This was reported in Automotive News (which I used to read with  some regularity back then). I don’t know if that’s just the D3 or all the companies that manufacture in North America. They should just hire Tom Stallkamp as a consultant and reinstitute his system.

    Geo. Levecque,
    The only recall I know of is for a potential missing brake line clip that affects only 24,000 units. Kind of like the recalls Toyota used to have. :) The brakes are installed in the car as a pre-assembled unit, so the problem was caused by – you guessed it – a supplier.

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