The contracts are there for the taking for minority suppliers, says aCorp. purchasing executive.
The trick will be to meet ever-growing pressures for quality, cost and delivery in the face of toughening economic times, Terri Turner Moon, GM director of program purchasing, tells a recent gathering at a minority partsmakers workshop in Detroit.
The event was hosted by Vitec, a minority-held supplier that makes plastic fuel tanks. Vitec's goal is to spend 6% of its annual outlay with minority suppliers, but the company failed to hit that target last year because it couldn't find enough qualified minority-held partsmakers.
Vitec President Robert Huebner says there is no single reason why minority suppliers are not meeting requirements.
Ms. Moon says that like other suppliers, minority-controlled companies are under the gun from rising competition, lower North American vehicle production and the sourcing of complete systems to bigger, global suppliers with wider product portfolios.
GM and other automakers want to buy more parts from minority companies, and they want their suppliers to do the same. Ms. Moon says GM exceeded its 5% target last year by spending about 5.8% of its budget, or $2.3 billion, with minority suppliers.
Motor Co. says it spent about $3.5 billion with minority suppliers last year. DaimlerChrysler Corp. says it did about $2.7 billion worth of business with minority suppliers in 2000 and is targeting the same amount again this year despite lower production volumes. It will host an annual minority supplier networking fair in August, in which it hopes to double last year's attendance of 1,500 visitors and exceed the $15 million in contracts generated between Tier 1 and smaller suppliers.
GM wants to concentrate 75% to 80% of its minority purchasing on these companies, one of which is Vitec. Ms. Moon says the supplier has $1 billion worth of business booked — mostly with GM — through 2009.